A government prosecutor has been appointed to investigate allegations Hong Kong Chief Executive Leung Chun-ying did not pay tax on about HK$50 million in consultancy fees from an Australian company, the Hong Kong Economic Journal reported Friday.
The move came as pan-democrat lawmakers filed a complaint with the Independent Commission Against Commission (ICAC) Thursday calling for a thorough investigation.
Also, the Democratic Party said it will begin impeachment proceedings against Leung.
Leung’s office has denied any impropriety, saying salaries tax is applicable only to income earned in Hong Kong.
On Wednesday, Australia’s The Age newspaper reported Leung received US$7 million in secret payments from Australian engineering company UGL after he became Hong Kong chief executive.
It said the payments were made under a 2011 contract when Leung was a private citizen.
Leung’s lawyer later issued a statement denying any wrongdoing.
In Australia, Sen. Christine Milne called on the police to investigate whether any crime was committed.
Leung’s office said he consulted an accountant regarding the tax issue and was told no Hong Kong salaries tax was required.
However, Leung paid tax on HK$18.72 million in bonuses paid by UGL, it said.
On Thursday, UGL denied the payments to Leung were made in secret, saying the practice is a common confidential commercial arrangement, according to Ming Pao.
Former ICAC investigator Lam Cheuk-ting, chief executive of the Democratic Party, told a press conference that Leung may have violated anti-bribery laws.
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