IN THE latest twist to an unfolding scandal, a leading Hong Kong civil servant has claimed the British colony's immigration chief was removed from office last July because anti corruption investigators found he had unreported business dealings.
Last week the former immigration director, Mr Laurence Leung, disclosed he had been told to leave his office by civil service secretary Mr Lam Woon kwong, on the grounds that the government has lost its trust in him, while refusing to say why.
Both Mr Leung and the government had maintained up to then that Mr Leung's surprise departure was for "personal reasons", and officials refused to respond to rumours that it had to do with his connections with Chinese government officials.
Yesterday Mr Lam broke the government's six month silence on the affair, telling an investigative panel that an anti corruption investigation, which cleared Mr Leung of criminal activity, had showed he had undisclosed shareholdings and a business relationship with a legislator, and that he had invested in a Chinese enterprise.
He had also failed to repay a government housing loan of HK1.76 million (£220,000), which had been used to buy property in Canada which he subsequently sold.
"The conclusion is that he could not pass the integrity test. He failed the test," Mr Lam said. Despite the revelations, members of the inquiry panel of Hong Kong's Legislative Council said they believed there was more to come.
One of the unanswered questions is why Mr Leung was abruptly told he must quit a full three months after receiving clearance and an apology from the anti corruption unit.
Chief Secretary Mr Anson Chan, Hong Kong's second ranking official, will be called to testify next week. Governor Mr Chris. Patten is also likely to be summoned at some stage, said legislator Mr Ip Kwok him, who chairs the inquiry.
As head of the highly sensitive immigration post for seven years, Mr Leung was responsible for issuing passports and visas and for immigration and border controls.
Mr Lam dismissed speculation in British and other media that Mr Leung bad been made to quit because he was giving secrets to Chinese officials.
"I have never had information to allegations of him leaking confidential information," Mr Lam told the inquiry panel, which was appointed by the Legislative Council.
Legislators expressed scepticism about the government's version. "You have to scrape the end of the barrel to come up with these reasons," Liberal Party panellist Mr Ronald Arculli told Mr Lam. "Do you really think the public and this committee would be convinced that the government did this for these reasons?"
Mr Leung said he was relieved after Mr Lam's statement. "I want to thank the government for clarifying that the accusation by the British press is groundless. At least I'm clear on this matter" he told reporters.
. Beijing has loosened controls barring Chinese Internet users from accessing foreign news sources but is watching for politically suspect content, an official said yesterday. Blocks imposed on sites operated by CNN, the Wall Street Journal and others have been lifted.