Ex-Hong Kong Housing Head Quits New World on Government Review

By Li Xiaowei

Aug. 16 (Bloomberg) -- Hong Kong's former housing chief Leung Chin-man resigned from a unit of New World Development Co. after the city's chief executive officer ordered a review of possible conflicts of interest related to the job.

Leung stepped down to ``quiet public criticism,'' he said in an e-mailed statement today. He will seek employment outside the real estate sector and not ask the government for compensation to avoid wasting public funds, he added.

Donald Tsang, Hong Kong's chief executive, asked for a re- evaluation because the civil service body that cleared Leung to take the job hadn't considered his involvement in the awarding of a 2004 development to a group including a New World unit. Civil service reviews are in place to prevent conflicts of interest when former officials join the private sector.

``We and Mr. Leung decided to respond to the bigger picture and terminate the contract unconditionally to ease any worries in society,'' New World China Land Ltd. said today in an e- mailed statement. Leung stepped down with immediate effect and won't receive any compensation, it added.

New World is controlled by billionaire Cheng Yu-tung.

The housing branch of the Hong Kong Transport and Housing Bureau didn't consider Leung's involvement in the 2004 Hunghom Peninsula deal when he sought clearance for the New World post, it said in a statement on the government Web site yesterday.

``We would like to express our sincere apologies,'' it said.

No conflict of interest was perceived because Leung stopped working for the government two years ago and was going to work only for New World's mainland unit, it added.

A group including a New World Development unit and Sun Hung Kai Properties Ltd. bought Hunghom Peninsula from the government for barely half the asking price, the South China Morning Post said today. The group later announced, and then abandoned, plans to knock down the waterfront estate, it added.

To contact the reporter on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net