Hong Kong’s then-leader Leung Chun-ying sold shares worth HK$2.3 million (£200,000) in a subsidiary of international property services firm DTZ in 2015, whilst he was being investigated by an anti-corruption watchdog over past dealings involving DTZ, according to a report.

The previously undisclosed sale by the former chief executive was uncovered by Stand News – in partnership with the International Consortium of Investigative Journalists (ICIJ) – from a new trove of leaked offshore company documents branded the “Pandora Papers”.

Leung Chun-ying
Leung Chun-ying. File photo: GovHK.

It is unclear whether Leung was compensated for disposing of the shares, according to the investigation made public on Monday.

Leung, who is now vice-chairman of China’s top political advisory body, called the news investigation “misleading” and added that a lawyer would handle the matter.

Leung founded a surveying company and served on the board of DTZ Holdings – later to be taken over by Cushman and Wakefield – before he was elected as Hong Kong’s chief executive in 2012.

He disclosed after his election that he owned shares in DTZ subsidiaries through a shell company, Wintrack Worldwide Ltd. He later said he had transferred those Wintrack Worldwide shares to a trust to avoid any conflict of interest while in office.

In 2014, the Sydney Morning Herald reported that Leung had received HK$50 million from Australian firm UGL Limited when it acquired DTZ Holdings in 2011, as an incentive to prevent him taking a position with a competitor.

The newspaper said he received the funds in two instalments when he was chief executive, but never disclosed the transaction. It said UGL had also offered to acquire from Leung a 30 per cent stake in DTZ’s Japan operations for £200,000.

ugl cy leung chun ying july 1
File Photo: Dan Garrett/HKFP.

The revelation prompted an investigation of Leung by the Independent Commission Against Corruption that lasted four years, but it dropped the case in 2018, citing “insufficient evidence.” A separate Legislative Council inquiry was dropped in 2020 as no government officials or Leung were willing to testify.

Leung and UGL denied any wrongdoing.

Emails, registration documents, directorship and shareholder records between offshore companies’ administrator Trident Trust, and a law firm that represented Leung between 2001 and 201 7 revealed that the 30 per cent stake which UGL had offered to buy from Leung was part of a company called EuroAsia Properties Limited.

Leung held the stake through subsidiaries: he owned 99.9 per cent of Wintrack Worldwide Ltd, which in turn wholly owned Ace Link Property Limited, while Ace Link held 30 per cent in EuroAsia.

EuroAsia, in turn, wholly owned DTZ Japan Limited, the firm’s operation in Japan.

A share transfer document dated December 2015 indicated that Ace Link ultimately sold its 30 per cent stake in EuroAsia to DTZ International Limited for £200,000.

Leung chun-ying EuroAsia shares
A share transfer agreement relating to 3 EuroAsia Properties Limited shares transferred from Ace Link to DTZ International limited. Photo: Stand News, ICIJ.

The documents made public on Monday confirmed the Sydney Morning Herald’s reporting in 2014.

But they also revealed that Leung was a director at the three companies during his first month as chief executive, until he resigned from them in August 2012. Leung did not declare his directorships when he entered office in July, Stand News reported.

Simultaneous jobs

Leung’s first declaration of interests as chief executive drew criticism as it was made public one month late. The document was signed on August 3, 2012, when he declared he had no paid directorship role at any company. The latest Pandora Papers disclosure indicated that Leung remained a director at EuroAsia until he resigned one week later, on August 10.

“I initiated procedures for all resignations before becoming chief executive,” Leung said in a Facebook post on Monday in response to the Stand News report. “The legal and contractual process to resign from companies differs in various countries, and directors’ resignations may not be immediately effective on legal terms.”

cy leung chun-ying
Leung Chun-ying. File photo: inmediahk.net by CC 2.0.

Apart from public declarations, chief executives are also required to make more detailed — but confidential — declarations to the Executive Council, on the size of any shareholding, as well as any transactions within two days of their completion. Chief executives are also required to declare any properties they own to the Chief Justice.

These declarations of interests are kept secret, so the media or the public are unable to confirm whether Leung had declared his interest in the EuroAsia sale.

Stand News also noted that Leung had made public in 2012 that he was a director of Wintrack Worldwide and its subsidiaries but never disclosed the names of these subsidiaries. Following pressure from the media and the public, Leung said the subsidiaries were used to hold stakes in one of DTZ’s overseas branches, but did not make public which company it was or the size of his shareholding.

Following the EuroAsia deal, Leung reiterated in his next declaration of interests in July 2016 that he continued to hold Wintrack Worldwide and its subsidiaries through a trust with his wife as beneficiary, but made no mention of the sale of one of the subsidiaries.

Leung Chun-ying’s declaration of interest to the Executive Council on July 1, 2016. Photo: LegCo document.

“Everybody knows that the [Executive Council’s] rules on declaring interests only require declaring any company shareholdings held directly, and not those of subsidiaries or changes to such shareholding,” Leung said in his response.

The former leader, who stepped down in 2017, said he went further than the rules required by putting those shareholdings in a trust managed by professionals.

However, unless set up as a blind trust, trustees may continue to receive instructions from its consignor in order to manage the assets, Stand News cited an accountant as saying.

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Selina Cheng is a Hong Kong journalist who previously worked with HK01, Quartz and AFP Beijing. She also covered the Umbrella Movement for AP and reported for a newspaper in France. Selina has studied investigative reporting at the Columbia Journalism School.