Hong Kong’s Tsang Seeks to Restore Public Trust Hurt by Corruption Probe

Hong Kong Chief Executive Donald Tsang sought to restore trust in his leadership and stem a growing outcry over collusion between politics and business, as he pledged to cooperate with a probe into his ties with tycoons.

Tsang, 67, apologized to the public yesterday after the city’s anti-corruption bureau started an investigation into his overseas trips on yachts and jets of businessmen, four months before he retires.

The corruption investigation, the first ever into a chief executive of Hong Kong, threatens to tarnish Tsang’s six-year tenure and is shaking public confidence in government. His apology comes just days after Henry Tang, front-runner to replace Tsang in a March 25 election, was embroiled in a scandal about a basement built without government permission.

“This whole thing has raised doubts about the core values of Hong Kong’s system,” said Cheung Chor-yung, a senior teaching fellow in public administration at the City University of Hong Kong. “It has aggravated public resentment on what they see is collusion between government and big businesses. It will also make the job of the next chief executive very difficult.”

Tang, formerly Tsang’s deputy, has refused public calls to quit the leadership contest after securing nominations from the city’s richest men to run. In a poll last month, two-thirds of the people surveyed said Tang should quit the race as respondents questioned his integrity. The Tsang revelations have further fueled public resentment, as surging property prices and an influx of money from China widen the city’s income gap.

Tsang’s Defense

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, professional delegates, lawmakers and representatives to China’s political bodies. China has pledged to allow Hong Kong to move toward universal suffrage by 2017.

“The chain of events has created worries among the media and public, civil servants and lawmakers and also shaken the public’s belief in Hong Kong’s system,” Tsang told lawmakers yesterday. “For this I sincerely apologize to the public.”

Tsang, who announced the formation of an independent committee led by a former chief justice to review rules governing civil servants, said yesterday he will cooperate with the investigation by the Independent Commission Against Corruption.

The chief executive reiterated yesterday that he has paid for his overseas trips and followed existing rules. He will also terminate an agreement to rent a 630 square meter apartment in Shenzhen, China, for 800,000 yuan ($127,000) a year after being questioned about it.

‘Rule Of Law’

The apartment was built by a company controlled by Wong Cho-bau, the Standard newspaper reported Feb. 29. Wong is also an investor in Digital Broadcasting Corp., which was recently granted a broadcasting license in Hong Kong, the newspaper said.

“One of the things that has always been to Hong Kong’s business advantage is the rule of law,” said Michael DeGolyer, a professor of government and international studies at Hong Kong Baptist University. “Now it’s a question of fairness, and do the rules apply to everyone equally?”

Lawmaker Paul Tse Wai-chun is trying to win support for a motion to charge Tsang with dereliction of duty for failing to declare the plan to rent the Shenzhen apartment. At least 15 lawmakers are needed to submit the motion, according to the city’s laws.

Tse said today in a phone interview that he had the support of five lawmakers, including himself. Passing the motion is the first step in a process that could ultimately lead to impeachment proceedings against the chief executive.

‘Not Really Sincere’

“I think the apology is not really sincere enough,” Tse said. “Donald is simply blaming it on the system.”

Tsang said yesterday he had “done everything according to the rules. I haven’t tried to hide anything.”

Tsang paid HK$500 ($65) for a ride on a yacht, Charles Ho, chairman of Sing Tao News Corp. (1105), told reporters on Feb. 27.

“It’s like giving a lift to someone,” Ho said. “What’s wrong with that?”

Ta Kung Pao, a pro-Beijing newspaper in Hong Kong, wrote in an editorial today that residents of the city should accept Tsang’s apology.

Without Permits

Public scrutiny of government officials increased after Tang, a former chief secretary, blamed his wife for building a basement without permits. Newspapers, including Apple Daily and the South China Morning Post, reported that the basement contained a wine cellar, movie theater and gym, prompting an investigation.

Tang has secured 390 nominations from executives including Li Ka-shing, Hong Kong’s richest man, on the 1,200-member election committee.

Tang is facing off against Leung Chun-ying, a policeman’s son and former government adviser, and lawmaker Albert Ho in the election. Leung, the preferred candidate in public opinion poll, trails Tang with 305 nominations.

Tang was nominated by businessmen on the committee, including Cheung Kong Holdings Ltd. (1) Chairman Li, Henderson Land Development Co. (12) Chairman Lee Shau Kee, and Sun Hung Kai Properties Ltd. (16) Co-Chairman Thomas Kwok.

To contact the reporter on this story: Kelvin Wong in Hong Kong at kwong40@bloomberg.net

To contact the editors responsible for this story: Hwee Ann Tan at hatan@bloomberg.net; Peter Hirschberg at phirschberg@bloomberg.net

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