A top executive of Hong Kong's government-held railway company resigned Thursday for management discord believed to tarnish the public entity's image.

Samuel Lai Man-hay, acting chief executive officer of Kowloon-Canton Railway Corporation (KCRC), announced his resignation on Thursday, one day after he and KCRC chairman Michael Tien Puk-sun pledged truce over a management row raised concern of both the public and the authorities.

The resignation has been received by the KCRC board, while Chief Executive of the Hong Kong Special Administrative Region (HKSAR) Donald Tsang said he respected Lai's decision.

At a press conference broadcast live, Lai said he had to resign to take responsibility for the indiscipline of the company's 20 top executives, who took leave on Tuesday to show their support to Lai while the KCRC board still meeting on how to solve the disputes.

"As the head of the corporation's management, I have to be held accountable for their behavior. Hence, I have decided to resign," said Lai.

Lai said the board felt that this action caused serious damage to the image of the corporation as a responsible public organization. As a result, the board agreed to terminate one of the 20 executive's contract and has given written warnings to the other 19.

KCRC's image and the management's reputation, however, has been under question since December, when cracks were found on mountings of compressors in several KCRC trains.

Investigation on the incident further revealed KCRC's deep-rooted problems of bureaucracy and lack of transparency, and finally led to the row between Lai and Tien.

Assigned as KCRC chairman by former HKSAR chief executive Tung Chee Hwa in 2001, Tien has raised opposition among the company's senior executives for his direct and bold leadership style.

In a letter submitted to the board one week ago, Lai made his dissatisfaction against Tien public, accusing him of infringing on the staff's professional fields.

Lai's resignation, however, is a dramatic U-turn of the week-long management feud, for Tien was the one who first submitted resignation but stayed on after Donald Tsang's intermediation.

Established in 1982, KCRC has provided transport for over one million commuters daily, but also attracted constant media criticism for being bureaucracy and lack of transparency.

Critics believe Tien's stay prove the government's determination to keep KCRC management transparent and disciplined, but warning Lai's resignation will influence the morale and might trigger out more personnel changes.