Bloomberg News

Hong Kong’s Tang Refuses Calls to Quit Chief Executive Race

February 17, 2012

(Adds former central banker comment in 11th paragraph.)

Feb. 17 (Bloomberg) -- Henry Tang, a leading candidate to be Hong Kong’s next chief executive, refused calls to withdraw from the race amid growing criticism over an illegal basement built at a property owned by his wife.

The former chief secretary yesterday apologized to Hong Kong residents at a packed press conference after newspapers carried front-page stories on the basement, built without approval, which they said included a wine cellar and a theater.

The scandal deals a blow to Tang’s ability to win support from a 1,200-member election committee picking the new chief executive next month. Tang also trails Leung Chun-ying by more than 20 percentage points in public-opinion polls and has been criticized for being out of touch at a time when rising property prices and inflation are stoking growing discontent among Hong Kong’s middle class.

“The smartest thing for Tang to do is to pull out of the race, or else it will bring disaster,” said Cheung Chor-yung, senior teaching fellow in public administration at the City University of Hong Kong, who is also one of the voters in the March 25 selection. “Most Hong Kong people won’t accept a person who is not honest and incapable of handling crises.”

Regina Ip, the former secretary for security, said today Tang wasn’t suitable to lead the city, and she would consider standing in the poll. Jasper Tsang, the chairman of the Legislative Council, also said today that he will consider joining in the election.

“I believe by being honest and open, I can ask the public and the election committee for a chance to show the people that I am the best candidate,” Tang said today at a forum organized by Hong Kong Journalists Association today. The 59 year-old said he won’t quit the race.

Photographers in Cranes

Hong Kong, which won’t have universal suffrage until 2017, will have its top official picked by a committee made up of the city’s richest men, professionals and representatives from China. All candidates need to get at least 150 nomination votes by the end of the month to stand for election.

Newspapers in the city today carried photos of chaotic scenes outside the property in the city’s Kowloon Tong district, showing photographers and cameramen in cranes attempting to capture pictures of the residence.

Stretched Explanations

“I still find his explanations quite far-fetched,” Miriam Lau, chairwoman of the Liberal Party which was formed by businessmen and professionals, said today. The party hasn’t decided whether to vote for Tang after the incident.

Tang isn’t the first government official to be accused of having illegal structures. Chief Executive Donald Tsang and Secretary for Education Michael Suen faced accusations last year.

“His way of handling the illegal-structure issue is not good, and I feel regret about this,” Joseph Yam, former chief executive at the Hong Kong Monetary Authority, the city’s de- facto central bank, told reporters today. “I still support Mr. Henry Tang to run for the election, as he has rich experience in governance.”

Late yesterday, Tang said his wife was responsible for the construction of the basement, and he had not intervened as the couple was having marital issues then. Tang in October said he was forgiven by his wife for a transgression, after the Eastweek magazine published an interview in which the couple was questioned about speculation he had an affair.

“My wife proposed to build this basement,” Tang said yesterday. “I know this is an illegal structure, but back at that time we were at a low tide in our marriage and we had communication problems. I feel regret and guilty about it.”

Japanese Bath

Reports earlier this month by Apple Daily, Mingpao Daily News and Oriental Daily News about the 2,000-square-foot basement, which also included a Japanese bath and gymnasium, forced Tang to issue a statement on Feb. 13.

More than 90 percent of private homes in Hong Kong are smaller than 100 square meters (1,076 square feet), according to the government’s Ratings and Valuation Department in 2011.

“The chief executive hopeful has given the impression that he has not been telling the truth as the fiasco continues to unfold,” the South China Morning Post, Hong Kong’s leading English newspaper, said in its editorial today. “Once again, he has counted on his wife to defuse the bombshell.”

Tang was financial secretary before becoming the second- highest ranked official in the city of 7 million residents. His father is Tang Hsiang Chien, who was ranked the 40th-richest person in Hong Kong in 2010 by Forbes Magazine. The younger Tang’s best-known policy success was to abolish duties on wine in 2008, helping the city overtake London and New York as the world’s biggest wine auction market.

Integrity Questioned

“Tang’s integrity is getting bankrupted,” said lawmaker Lee Cheuk-yan, one of the member in the committee. “He should pull out of the election. Otherwise he will push the confidence level of the future government to an extremely low point.”

Leung, a policeman’s son and former government adviser, has public support of 49.2 percent for the chief executive job, according to a survey published on Feb. 13 by the University of Hong Kong’s Public Opinion Programme. Tang trails with 26.1 percent approval. The poll of 1,000 residents had a margin of error of less than 3 percentage points.

Since the former British colony was returned to China in 1997, the income of the poorest 10 percent of the city’s families has fallen 13 percent. Earnings for the richest 10 percent rose 6.3 percent.

Tang is seen to represent businesses, whereas Leung is more popular as he’s seen to be “more reform-oriented, is more willing to challenge existing interests,” Joseph Cheng, a professor in political science at the City University of Hong Kong said earlier this month.

“If Tang refuses to withdraw from the race, he will bring the biggest headache to Beijing,” City University’s Cheung said. “If Tang can still be elected as the chief with all these scandals, it really shows the ridiculousness of this small- circled election. Now Leung stands a better chance.”

--With assistance from Kelvin Wong in Hong Kong. Editors: Tan Hwee Ann, Chen Shiyin.

To contact the reporter on this story: Sophie Leung in Hong Kong at sleung59@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net


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