Secretary for Development Benefits from Own Push for NE New Territories Development

Apple Daily

22nd July 2013

Paul Chan Mo-po Benefits from His Push for NE New Territories Development

<硬銷東北發展 陳茂波囤地自肥>

Paul Chan Mo-po, has been the Secretary for Development for almost a year, and has been very emotional when pushing forward the North East New Territories development plan and completely ignore the opposition’s voice. Apple Daily found out that Chan and his wife could benefit from the compensation the Hong Kong SAR government would pay, amounting to approximately US$3.9 billion, to the land owners in the affected area for acquiring their homes. Hui Po-ming, Chan’s wife, owns at least three plots of land in Kwu Tung North within the planned development area. The three plots of land were purchased by Chan personally in 1994 at US$45,000. When the government acquires the land (when the development plan goes ahead), the total compensation for these plots of land would amount to US$1.6 million, representing a 35 times profit. Legislator Kenneth Chan Ka-lok said that Paul Chan has clear conflict of interests in the North East New Territories development plan (NENTD plan), and urged him to step down.

Paul Chan’s family owns three connected plots of land in Kwu Tung North, with a total size of 15,000 sq. ft. which is located around tens of meters away from the planned Kwu Tung MTR train station in the NENTD plan. Two of the three plots of land are 100% owned by Statement Industries Limited, whilst the other is 1/3 owned by the company.

The shareholders of Statement Industries are three overseas companies, namely Orient Express Holdings Limited, Excellent Assets Limited and Fidelity Management Limited. According Paul Chan’s declaration to the Executive Council, the property he’s living in Leighton Hill is owned by Victorwood Development Limited, which is owned by his wife Hui Po-ming and families. Victorwood Development’s major shareholder is Orient Express Holdings Limited, which suggests that Hui partly owns the three plots of land in Kwu Tung.

The other two overseas companies are also closely related to Hui Po-ming. Fidelity Corporate Services Limited, of which Hui is a director, is a shareholder of them until end of last year the shares were transferred to Strategic Assets, another overseas company Hui is involved in.

Chan and his wife control the company’s purchases

According to the land registry document, all three plots of land were purchased by Paul Chan’s name in April 1994 and later on transferred ownership to Statement Industries. The sale purchase agreement was signed by Paul Chan on behalf of Statement Industries. The shareholder of Statement Industries in 1994 include the above overseas companies and Hui Po-ming’s relative Hui Kar-lun, whilst the director is Paul & Associates Consulting Limited wholly owned by Hui Po-ming and Paul Chan. Statement Industries has been the owner of the plots of land, and Paul & Associates resigned from the director position last November. Hui Po-ming resigned from her director position at Statement Industries last October, which is two months after Paul Chan became the Secretary for Development.

The latest documents show that Hui Kar-lun is the chairman and a director of Statement Industries, whilst another director of the company is Au Siu-yan, whose reported residential address is the same as that of Hui Po-ming’s brother-in-law, Au Cheung-sing. It is estimated that Au Siu-yan could be Au Cheung-sing’s daughter. This shows that Statement Industries continues to be run by Paul Chan and his families.

The land in question is located next to an abandon umbrella factory, and is currently an empty land with lots of wood and surrounded by metal mesh. According to the Lands Department’s map (aerial view), the plots of land have been empty since 1994 when Paul Chan purchased them.

According to the latest NENTD plan, the land will be used to built Home Ownership Scheme housing, and will be acquired by the Hong Kong SAR government. According to the government’s report issued in March, the latest ex-gratia compensation is US$122 per sq. ft. By estimation, Paul Chan and his families can receive US$1.6 million by selling the three plots of land to the government, which is around 44 times of Paul Chan’s monthly salary, a 35 times higher than the purchasing price in 1994 which was US$45,000.

Since Paul Chan was appointed, the new town development ex-gratia compensation for farmland owners has gone up by 26% from US$100 to US$126. On the other hand, the ex-gratia compensation for eligible household remains unchanged at US$77,000 per household since 2009, when the High-Speed Train project began to acquire nearby land, no review nor raise had been seen.

NENTD plan lacks data support

Albert Lai Kwong-tak, the convener of The Professional Commons, said that Paul Chan knew that his families own land in the North East New Territories area and should have declared his interest prior to announcing the NENTD plan, or it could be an issue of credibility. He asks Chan to explain and clarify whether he has ever given his subordinates specific instructions throughout the the planning and decision making process. Lai also pointed out that the SAR government has been refusing to provide community evaluation of the NENTD plan, hence, the current plan is not backed by any objective data. With the emerge of Paul Chan’s suspicious of conflict of interest, the rational of the NENTD plan is in doubt.

Kenneth Chan Ka-lok, legislator from the Civil Party, criticise Paul Chan for not learning from his scandal on the illegal subdividing flats him and his wife own and that he must be very clear about the possible conflict of interest he might have in the NENTD plan after almost a year in the role. Kenneth Chan said that Paul Chan faces scandal after scandal, shows that he does not match the requirements for his role. CY Leung, the Chief Executive, should consider “ending” this, “even if he doesn’t resigned, he should be fired”. Kenneth Chan also said that the public has lost their confidence in the Executive Council, and this incident will be a major impact to the government’s governance.

Paul Chan replied via his press officer last night that he and his wife Hui Po-ming “do not own any land in Hong Kong”, but admitted that a family business of which Hui was a director purchased a total of 20,000 sq. ft. of farmland land for leisure use in 1994. 2,000 sq. ft. of the land was later on acquired by the government. His wife has resigned her role as a director from the company and sold all the shares by October 2012. He also claimed that he abides by the regulations governing the accountable officials and report to the Executive Council.

Paul Chan and His Wife’s Land in Kwu Tung

Lot number:
DD95
767 RP
768 RP(Statement Industries has 1/3 of the ownership)
768 SC
Total space:~14,967 sq. ft.
Owner: Statement Industries Limited
Purchasing Date: 28th April 1994(contract signed by Paul Chan)
Purchae Price: US$45,000
Expected Compensation: US$1.6 million

Source: Land Registrary, Lands Department, Apple Daily

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