Ally of HK leader investigated in exchange probe

Fri May 24, 2013 12:48pm EDT
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By James Pomfret

HONG KONG (Reuters) - The chairman of Hong Kong's Mercantile Exchange is under police investigation, the government said on Friday, as three other men were charged with possessing false documents including a fake cheque for $460 million following a probe into alleged irregularities at the shuttered exchange.

Barry Cheung, the exchange's controlling shareholder and a close ally of Hong Kong leader Leung Chun-ying, resigned from all of his public posts on Friday on the grounds that he is under police investigation, a government statement said.

Police said they met with Cheung on Friday but he was not arrested.

Local media quoted a statement by Cheung as saying he had never done anything illegal and was assisting the criminal investigation by police.

Cheung said in a statement on Wednesday that he would cooperate fully with the police investigation.

The abrupt closure of the exchange has raised questions over regulatory oversight in Hong Kong and drawn attention to Leung's ties with Cheung, who acted as his campaign chairman in the Hong Kong leadership election last year.

A statement from Leung's office said that the chief executive on Friday received Cheung's resignation from all public posts - including Hong Kong's core policy making body, the Executive Council - "on the ground that Mr Cheung is under police investigation."

"The Chief Executive has accepted his resignation," the statement said.   Continued...

Hong Kong Mercantile Exchange Chairman Barry Cheung is surrounded by journalists in Hong Kong May 22, 2013. REUTERS/Stringer