New World China Land announced Friday mid-night an unconditional termination of its employment contract with Leung Chin-man, former secretary for housing, planning and lands.

The company said in a written statement that realizing the immense public concern over the issue and its possible impact on social stability and harmony, both the company and Leung had agreed, after thorough consideration, to terminate the contract.

The termination took immediate effect and no compensation would be involved, the statement said.

Leung himself issued a statement agreeing with the way the chief executive is handling the issue, which he said has shown the government's willingness to face problems.

He praised Secretary for the Civil Service Denise Yue's courage in admitting a mistake. He also added that he would not pursue the matter further with the government in order to avoid wasting public funds.

Earlier, Chief Executive Donald Tsang asked the Secretary for the Civil Service, Denise Yue, to reassess whether Leung should be allowed to join a major developer with which he had close dealings while in office.

Tsang's statement came after queries from the public and political parties that Leung's new job constitutes conflict of interest with his former job in the government.

Facing the media in the evening, Yue said it was her decision to approve Leung's application and she expressed regret that the matter had caused strong public outcry. But she did not mention if Leung could stay on his new job.

Yue said she had added four restrictions to the existing ones, forbidding Leung to take part in any business of New World China Land Limited that is connected with Hong Kong; disclose to the company any classified or sensitive information acquired while he was in government service; or participate in any discussion between the company and the government.

However, she said she was unaware of Leung's involvement in the controversial Hung Hom Peninsula residential project, which was co-developed by the parent company of Leung's potential employer, and had underestimated public sentiments.

In the approval process, she also failed to inform the advisory committee on post-service employment of former senior civil servants, which is chaired by Justice Pang Kin-kee, of such important information or consult the chief executive and other principal officials. She only consulted the permanent secretaries of the Development Bureau and Housing & Transport Bureau.

Yue said: "The most urgent thing for me now is to consult again the relevant policy bureaux, the advisory committee, review the application and then report to the chief executive again."

In his statement, Tsang said he noted Leung had deep involvements with New World Development Co Ltd over the Hung Hom Peninsula housing project on behalf of the government in 2005.

The approval was in line with established procedures.

(HK Edition 08/16/2008 page2)