BENJAMIN ROBERTSONbenjamin.robertson@scmp.com
PUBLISHED : Thursday, 22 October, 2015, 11:46pm
UPDATED : Thursday, 22 October, 2015, 11:46pm
At the centre of the controversy is indebted real estate advisory group DTZ, of which Leung was Asia-Pacific chairman. Photo: Dickson Lee
A rival offer from a mainland investment firm to buy Chief Executive Leung Chun-ying's London-listed company in 2011 "had no substance", an adviser on the deal has told the South China Morning Post.
The revelation might help clear a question over whether the sale of the company at a cheaper price harmed its shareholders' interests, as lawmakers revisited the issue of whether Leung had declared payments he received for the transaction to the Executive Council.
At the centre of the controversy is indebted real estate advisory group DTZ, of which Leung was Asia-Pacific chairman.
It saw a last-ditch bid from Tianjin Innovation Financial Investment in late 2011 that on paper seemed more attractive to DTZ shareholders than the ultimately successful offer from the Australian engineering group, UGL.
But the mainland offer was not seen as serious, said Paul Baines, a former adviser to DTZ majority shareholder Saint George Participations, which was controlled by the wealthy French Mathy family.
"When you have a bank about to pull down the shutters, you have got to be very clear what you are paying and what you are taking on and there was nothing like that" from the Chinese, he said, referring to the Royal Bank of Scotland.
The mainland bid arrived on the same day that Leung, who was to run for chief executive, accepted £4 million (HK$48 million) from UGL to "act as a referee and adviser" should the UGL offer prove successful.
That raised questions last year about whether Leung could have given impartial advice on the merits of the second offer.
Leung said the UGL payment was a resignation arrangement for him and a standard business practice in non-competition deals.
UGL eventually bought DTZ for £77.5 million.
Baines said the Mathys wanted to restructure DTZ rather than sell at a loss, but the family "did not have a lot of say over what happened. It was the bank that was driving [the deal]".
http://m.scmp.com/news/hong-kong/politics/article/1871156/no-substance-says-adviser-offer-tianjin-firm-hong-kong-chief
