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He also raised a number of largely irrelevant questions of detail and asked the Governor to order a public hearing of the case. I cannot do better than send you a copy of my reply to him of 29th August, which was approved by the Colonial Secretary personally. This was written after the Department had gone over the ground once again, including a further night check by the Housing Manager, and had reported their investigations and explanations of the working of the rules in the fullest detail.

More recently, and in pursuit of paragraph 4 of my letter of 29th August to Mr. Cheung, the case was investigated by the City District Office, and the results were conveyed to Mr. Cheung in the Director of Home Affairs' letter of 20th October, a copy of which is attached, and personally in the course of interviews with the City District Office staff.

Mr. Cheung's letter to the Prime Minister makes a serious allegation against the Director of Housing of malpractices favouring his family, an allegation which he claims he has already reported to the Governor and the Colonial Secretary. This is not so: it seems likely that Cheung chose this particular eye-catching phrase in his letter to the Prime Minister in the hope of drawing the Prime Minister's attention to his complaints. Nevertheless, and despite the complete implausibility of his statement, the allegation was referred to the Commissioner Against Corruption, in conformity with standard procedures. The Commission has replied that Mr. Cheung is well-known to them and that it has previously looked into three formal allegations of corruption made by him and has judged them unfounded. In short, the Commission does not consider that it has anything useful to say on this present allegation. All of us who know

the Director of Housing, are not at all surprised at the Commission's reaction, and regard these allegations as outrageous.

Mr. Cheung has a long history of crusading against what he seems to be convinced are irregular practices of various kinds in the public service. He also has a persistent habit of telephoning senior officers direct, sometimes at their homes, and demanding action; and in this process he has been abusive in speaking to Mr. Liao's wife on the telephone.

In the circumstances I recommend that I be authorised to reply to Mr. Cheung's letter to the Prime Minister to the effect that his complaints have been investigated and found to be unjustified and that the Prime Minister does not consider it appropriate to see Mr. Cheung or to send someone to Hong Kong to investigate further Mr. Cheung's allegations.

for aily,

Cary Hy-.

(G.A. Higginson)

for Colonial Secretary

Encl.

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sir,

HOU L/M 38/75