Chief Executive Leung Chun-ying has denied accusations that he has shown favoritism to allies after he appointed Paul Chan Mo-po to replace former finance secretary John Tsang.

Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung was acting finance secretary following Tsang’s resignation last month, but he was replaced by Paul Chan on Monday to become the city’s new Finance Secretary. Pro-government paper Sing Tao cited an analyst as saying that Chan may continue serving as finance chief in the next administration if his performance is satisfactory.

Paul Chan (L), CY Leung (R). Photo: GovHK.

The appointment of Chan was met with criticism from the pro-democracy camp. Civic Party lawmaker Alvin Yeung said Monday that Chan lacked integrity and an ability to serve as finance chief. He said that the appointment was a “consolation prize” for being Leung’s ally.

Asked if the personnel choice was a case of nepotism, Leung told reporters on Tuesday that Chan was appointed because of his accomplishments in his previous post as development secretary.

He said Chan faced “tremendous obstacles” in implementing policies, as society remained divided over housing and land issues. Leung raised the example of the controversial Northeastern North Territories development project as one of the difficulties Chan encountered during his tenure. He said that some critics had used unfounded arguments to attack the plan, but those arguments are no longer discussed today.

A group of farmers and environmental justice advocates protested against the NENT development plan. File Photo: Mapopo Community Farm, via Facebook.

Leung added that because of Chan’s efforts, Hong Kong has seen a “significant” increase in potential private housing supply, about 90,000 new flats.

Controversial figure

Chan, 61, is considered to be one of the most controversial officials in Leung’s administration as he was embroiled in a number of scandals since his appointment to the government.

Most notably, in 2012, his wife was found to own properties – through a company – that were illegally subdivided. Chan denied any knowledge of the properties and said he had ceased to be a director of the company.

But local media later revealed that their company – while Chan was still a director – acquired a property that was already subdivided at the time of purchase. Chan then clarified that he meant he had “no knowledge of the current status” of the flat, and admitted that he knew about the situation when it was acquired. His evasive response to the scandal led to calls for his resignation.

Matthew Cheung (L), Paul Chan (R). Photo: GovHK.

Chan once again came under the spotlight in 2013 when Apple Daily revealed that his family owned plots of land in Kwu Tung that the government planned to develop. The paper claimed that Chan was responsible for pushing through the project and failed to declare potential conflicts of interests.

Chan will be tasked with preparing for this year’s budget, which will be released on February 22.

Former secretary for labour and welfare Matthew Cheung Kin-chung was also appointed on Monday. He replaced Lam in becoming the city’s number 2 official. Leung said Cheung had made “outstanding achievements” during his office in policy areas such as poverty alleviation and elderly care.

Ellie Ng

Ellie Ng has written for Foreign Policy, the Daily Telegraph, Global Voices Online and others.