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LCQ13: Public Officer's Property Transactions

Following is a question by the Hon Emily LAU and a written reply by the Secretary for the Civil Service, Mr Joseph W P Wong, in the Legislative Council today (July 11):

Question:

In reply to my question on 27 June regarding the receipt of preferential treatment by public officers from real estate developers, such as purchasing properties at prices below market value or enjoying priority in purchasing properties, the Secretary for the Civil Service stated that by virtue of the Acceptance of Advantages (Chief Executive's Permission) Notice, a civil servant might accept priority in purchasing a property and purchase a property at a discount without having to obtain special permission from the Chief Executive provided that the preferential treatment was equally available on equal terms to persons who were not civil servants and that the officer concerned had no official dealings with the tradesman or the company that offered the advantage. In this connection, will the Executive Authorities inform this Council :

(a) given that priority in purchasing properties is not available to all members of the public, why the acceptance of such priority by civil servants will not constitute an acceptance of advantages so long as "the preferential treatment is equally available on equal terms to persons who are not civil servants";

(b) whether they have thoroughly investigated the case reported by the media last month, in which three senior public officers were alleged to have purchased flats in Celeste Court, Happy Valley from Sun Hung Kai Properties Limited at prices below market value in 1992; if so, of the relevant details and findings; and

(c) whether they will consider amending the Acceptance of Advantages (Chief Executive's Permission) Notice and the Prevention of Bribery Ordinance to prohibit public officers (including civil servants) from soliciting or accepting priority in purchasing properties from real estate developers; if not, of the reasons for that?

Reply:

Madam President:

The Administration's reply is set out below, in the same order :

(a) Where the same method of purchase is equally available to persons who are not civil servants, a civil servant's act of purchasing a property outside or in advance of a public sale is legally permissible under the Prevention of Bribery Ordinance (PBO) provided that there is no conflict of interest with the officer's official duties and the sale is not a reward for the officer abusing his official position. Meeting the test of equal availability to persons who are not civil servants alone does not exempt an officer from provisions in the PBO.

In part (c) below, I will return to the wider question of striking a reasonable balance between the need to maintain public confidence in the integrity of the Civil Service and the rights of civil servants to engage in normal property transactions as ordinary citizens.

(b) On 5 July 2001, the Financial Secretary issued a statement on the outcome of his examination of Mr Joseph YAM's property transactions, including the flat at Celeste Court. At the same time, the Secretary for the Civil Service issued a statement on the outcome of our examination of the property transactions conducted by Messrs Joseph YAM, Billy LAM and Nigel Burley in 1990 to 1992 in respect of flats at Celeste Court.

(c) The Administration is mindful that the media reports on the purchase of the three flats have brought into sharper focus public concern over the propriety of civil servants, particularly those in senior positions, purchasing a flat through approaches to or enquiries with the developer in advance of or outside a public sale.

As has already been stated in part (a) above, where the same method of purchase is equally available to persons who are not civil servants, this is legally permissible under the PBO provided that there is no conflict of interest with the officers' official duties and the sale is not a reward for the officers abusing their official positions. Nor is it in contravention of the civil service regulations which recognise the principle that, in general, civil servants should not be deprived of their rights, as ordinary citizens, to enter into normal purchase and sale transactions.

Nonetheless, in the interest of maintaining public trust and confidence in the probity of senior civil servants, there may be a need to improve the present civil service rules governing the purchase of flats outside or in advance of a public sale. We are now considering the introduction of an additional requirement so that senior civil servants, for example directorate officers, have to take into account any public perception problem and notify their heads of department or the Secretary for the Civil Service before they enter into such transactions.

(This is in addition to the present legislation and rules prohibiting acceptance of advantages by civil servants where there is a conflict of interest or abuse of office.) In doing so, we need to strike a balance between the objective of addressing the problem of public perception and the right of civil servants to engage in normal transactions as ordinary citizens. We will discuss the matter thoroughly with the Department of Justice and the ICAC and consult the Staff Sides. We aim to promulgate the new rules within the next few months.

Wednesday, July 11, 2001
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