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Hong Kong tycoon Li decides to step down from Cabinet

Prominent Hong Kong tycoon David Li (李國寶) has stepped down from the territory's Cabinet two weeks after settling with US regulators over insider-trading allegations involving shares of Dow Jones.

Li, the chairman of Bank of East Asia (東亞銀行), Hong Kong's largest local bank, said he has decided to resign from the Executive Council as he regretted that the matter had caused public concern.

In a statement, Li said increasing pressures were brought on the administration as he was not allowed to comment on the case under the agreement with the US Securities and Exchange Commission (SEC).

"It would be highly unfair to the chief executive and my fellow Executive Councilors for me to allow the current situation to continue. I have therefore made the very difficult decision to resign," Li said on Saturday.

Li, who will stay in his post as a lawmaker, reiterated that the choice to pay a civil penalty of UIS$8.1 million after an SEC probe was made to avoid a drawn-out court battle and to protect his family and businesses.

Hong Kong Chief Executive Donald Tsang (曾蔭權) said he has asked Li, who previously helped with his election campaign and fund raising, to re-consider his resignation.

"After serious consideration, he insisted to tender his resignation letter to me," Tsang said but praised Li's contribution to the government in his two years as a Cabinet member.

Li, 68, was accused of illegally tipping off his close friend Michael Leung Kai Hung (梁啟雄) about Rupert Murdoch's planned takeover of Dow Jones and Co. Li is a former director of Dow Jones.

An SEC complaint alleged that Leung, with the help of his daughter Charlotte Ka On Wong Leung (王梁家安) and son-in-law Kan King Wong (王敬景), purchased some US$15 million of Dow Jones shares in their account at Merrill Lynch after the tip.

They stood to make about US$8 million in illicit profits but the SEC won an emergency court order within days of the News Corp offer, freezing the account and stopping the money from being transferred, the SEC said.

Li's family is one of Hong Kong's most powerful and has been prominent for five generations in business and politics.

His grandfather founded the Bank of East Asia in 1918 and the lender boasts one of the biggest branch networks in China among Hong Kong lenders.
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