Daily Archives: October 13, 2014

And then there were CY’s fiduciary duties

While I have previously written about CY Leung’s tax problem, it is worth revisiting the issue of his fiduciary duties to the shareholders of DTZ. When the initial revelations about CY’s secret deal were disclosed by the Sydney Morning Herald on Wednesday, barrister Alan Leong called the news a “cast-iron case” of a breach of his fiduciary duty to DTZ shareholders.

Five days later, it is now being reported that the CY’s secret deal was concluded on the very day that a rival bid was made to acquire for DTZ. Not just any rival bid, but one that was £100 million higher than that made by UGL. For context, UGL’s bid was £77.5 million. In other words, the rivals were offering 130% more than UGL.

Just as interesting is the news that UGL is now selling DTZ for a LOT MORE than they got it for. The Brisbane Times quotes a figure of $ 1 billion.

And what does CY’s spokesman say? He dissembles:

“The decision to sell DTZ was a decision made by DTZ board of directors. DTZ played a significant role in initiating and negotiating the terms of the ‘resignation’ agreement that Mr Leung entered with UGL.”

In other words, he is trying to say that DTZ knew of the secret deal. Note, however, the words used: “played a significant role in initiating and negotiating”. Played, significant role, initiating, negotiating: all of these are typical examples of the language of dissembling. For instance, the word ‘significant’ can simply mean that they were involved in some way or another. Whether it was actually ‘significant’ is largely subjective. Similarly, the scope of initiating and negotiating are not delineated in any way. No doubt, as the truth is gradually revealed, CY (or his spokesman) will twist those words to fit whatever the newly revealed facts are.

Lastly, although not picked up in the reports that I have read, I think it is fairly significant that the head of China’s liaison office in Hong Kong, did not see “any big problem” with CY’s secret deal. Not exactly “unwavering support”.