Leung Chun-ying demanded an extra US$4.8 million from Australian engineering firm UGL in return for cooperating on the £77 million (US$123 million) sale of DTZ, the real estate advisory empire he helped build, the Sydney Morning Herald reported Thursday.
The money was to compensate him for losses in DTZ’s loss-making franchise in Japan.
It was on top of the US$7 million Leung received from UGL under a confidential contract after he became Hong Kong chief executive, the report said, citing e-mails obtained by Fairfax Media, which publishes the Herald.
In a November 2011 e-mail to RBS, the largest creditor of DTZ, a Leung confident presented a breakdown of his “contributions to the Japanese business”.
RBS subsequently sent an e-mail to an intermediary, saying Leung wanted to be reimbursed as “part of his cooperation for the UGL deal”.
UGL chief executive Richard Leupen was prepared to walk away, the report said.
In a November 26, 2011 e-mail to DTZ chairman Tim Melville-Ross, Leupen said there was “no way we’re paying that”, describing Leung’s demand as a “deal breaker”.
Leung signed the side-deal hours before the Dec. 2 deadline, enabling the sale agreement to go through.
Leung denied any wrongdoing “legally and morally” in the UGL payout but the news sparked controversy in Hong Kong amid an ongoing protest by pro-democracy activists who are demanding his resignation.
A government prosecutor has been appointed to investigate claims he did not pay tax on the money he received from UGL and a group of lawmakers said they will launch impeachment proceedings againt him, according to reports.
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