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Henry Tang Vows to Stay in Hong Kong Leadership Race as Ip Joins Contest

Henry Tang vowed to stay in the race to be Hong Kong’s next leader, as a scandal over a basement built illegally at his wife’s property drove down his popularity and prompted lawmaker Regina Ip to join the contest.

Tang, backed by business executives, filed papers to run yesterday after obtaining nominations from 379 representatives on the 1,200-member election committee. Ip said she plans to contest in the March 25 election to offer voters more choice.

The former chief secretary’s refusal to quit highlights the growing divide between the city’s business elites and residents, as surging property prices stoke discontent and an influx of mainland visitors spurs street protests. The scandal is threatening to derail a smooth handover from outgoing Chief Executive Donald Tsang to a candidate backed by the Chinese government and the richest men in Hong Kong.

“After Beijing, the business community has the largest say and they are opting for Henry Tang because he’s one of them,” said Joseph Cheng, a professor in political science at the City University of Hong Kong. “Public opinion is a factor, but there are many others. A lot of people in the election committee are waiting on Beijing’s signal.”

Since the British handover to China in 1997, the city of 7.1 million has picked its leader through an election committee comprising of executives, lawmakers and representatives from China. More than half of Hong Kong people polled by the South China Morning Post said Tang should quit the race after he admitted knowing about the basement that was built without government approval.

Business Lobby

Tang, 59, has the backing of the business lobby on the election committee, with Bank of East Asia Chairman David Li and former Hong Kong Monetary Authority Chief Executive Joseph Yam supporting him. He’s also nominated by Li Ka-shing, Hong Kong’s richest man, Lee Shau Kee, the chairman of Henderson Land Development Co., and Thomas Kwok, co-chairman of Sun Hung Kai Properties Ltd., according to the papers filed.

“I know my way of handling the illegal structure has pulled down my popularity,” Tang told reporters today. “But I will still go ahead because I believe my political platform could cater to the needs of the people in Hong Kong.”

Tang already faced public dissatisfaction for being part of a government that failed to address a 60 percent property price surge since the start of 2009 quickly enough.

He was trailing Leung Chun-ying, a former government adviser, in public-opinion polls before papers including Apple Daily and the South China Morning Post, reported on the basement. The government has started an investigation on the basement, which the papers said contained a wine-tasting room, gym and Japanese-style bath.

Public Anger

“His refusal to quit the race shows that he’s ignoring the opinion of people in Hong Kong,” said Cheung Chor-yung, a senior teaching fellow in public administration at the City University of Hong Kong, who is on the election committee. “How could he govern Hong Kong? Many people may take to the streets before he can start his term.”

The poll of 513 people commissioned by the South China Morning Post showed 51.3 percent of respondents thought Tang should quit, while 79.5 percent said the incident reflected poorly on his integrity.

“As Mr. Tang continues to run for the election despite his low popularity because of his integrity problem, I decide to take part in the race,” Ip said at a press briefing yesterday. “I want to offer another choice to Hong Kong people.”

Security Bureau

Ip was the first woman to run the city’s security bureau. She left government in 2003 after 500,000 people took to the streets protesting her attempt to introduce an anti- subversion law in the former British colony. Jasper Tsang Yok Sing, chairman of the Legislative Council, yesterday also said he will decide early next week whether to run.

A separate poll by the University of Hong Kong conducted last week showed Tang’s approval rating fell 4.8 percentage points to 21.3 percent. Leung had the backing of 49 percent of respondents.

The Liberal Party won’t vote for the former chief secretary should he fail to win support from the public, Honorary Chairman James Tien said yesterday on Commercial Radio Hong Kong.

Public anger in Hong Kong has pressured the city’s previous leaders. Tung Chee-hwa, Hong Kong’s first chief executive, stepped down early after protests by 500,000 people in 2003 and hundreds of thousands in 2004.

Family Issues

Chinese Premier Wen Jiabao has criticized Donald Tsang’s government for failing to address social “contradictions” that are stoking discontent in the autonomous territory.

Tang said he didn’t intervene in the construction of the basement as he was having marital issues with his wife at the time. In October, he said he was forgiven by his wife for a transgression, after the Eastweek magazine published an interview in which the couple was questioned about speculation he had an affair.

“I admit that I handled the family issues in a bad way,” Tang said yesterday. “These are all my fault. I will bear all the responsibility.”

Tang’s father is Tang Hsiang Chien, ranked the 40th-richest person in Hong Kong in 2010 by Forbes Magazine.

To contact the reporters on this story: Sophie Leung in Hong Kong at sleung59@bloomberg.net; Michelle Yun in Hong Kong at myun11@bloomberg.net

To contact the editors responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net; Tan Hwee Ann at hatan@bloomberg.net

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