“After considering the report and the legal advice given, the [committee] endorsed that no further investigative action should be taken by the ICAC,” the statement said, adding that the Department of Justice had also decided there was “insufficient evidence to support a reasonable prospect of conviction” against Leung for any criminal offence.

The ICAC also said it was dropping an investigation into legislator Holden Chow Ho-ding’s alleged interference with a subsequent Legislative Council inquiry into the payment.

Chow, of the pro-government Democratic Alliance for the Betterment and Progress of Hong Kong, was last year accused of having secret talks with Leung and helping him influence the scope of the inquiry.

There was no immediate comment from Leung.

Chow, in a Facebook post, said he respected the decision by the ICAC and justice department. He said he hoped the whole saga could come to an end.

Since 2014, the ICAC had been investigating the HK$50 million payment from Australian engineering firm UGL to Leung while he was the city’s leader from July 2012 to June 30, 2017.

Ex-leader CY Leung threatens legal action against opposition lawmaker

The controversy stemmed from a deal Leung struck following UGL’s 2011 purchase of DTZ, a property services company once listed in Britain, of which he was a director. As part of the deal, Leung agreed not to form or join a rival firm and to help promote the company.

Leung received part of the sum after becoming chief executive in 2012. But he did not declare this during a meeting with his cabinet, the Executive Council, sparking concerns over a possible conflict of interest.

The opposition pan-democrats had been chasing after Leung over the years, trying to uncover fresh evidence and lodging complaints overseas, while the former chief executive repeatedly threatened to sue lawmakers and commentators who implied any wrongdoing on his side. In September, he threatened to sue Democratic Party lawmaker Lam Cheuk-ting after his failed bid to have Britain’s National Crime Agency look into Leung’s deal.

In a statement, the justice department concluded that “having carefully considered the investigation reports and the relevant materials submitted by the ICAC … there is insufficient evidence to institute prosecution against Mr Leung and Mr Chow.”

CY Leung: Britain’s NCA not investigating me over HK$50 million deal

The decision was solely based upon insufficiency of evidence, the department said.

“The totality of the evidence is that as part of the arrangement of the takeover, DTZ had knowledge of Mr Leung entering into agreement with and accepting money from UGL for Mr Leung’s non-compete non-poach arrangements,” the statement said.

“Furthermore, Mr Leung’s acts in negotiating the takeover with UGL were congruent with the interests of DTZ, which was at the relevant time in financial difficulties.

“The evidence fell short of establishing DTZ did not consent to Mr Leung accepting the monies or that the conduct fell within the mischief of an agent accepting advantage charge within [the Prevention of Bribery Ordinance]. There is no reasonable prospect of conviction of a corruption charge against Mr Leung.”

The statement continued: “As to the absence of declaration of such interests to the relevant authorities, since there is no conflict of interest on the part of Mr Leung, there was no legal requirement for him to make declaration of the amount that he was to receive under the agreement with UGL entered into before he became the chief executive.

“The absence of declaration hence did not constitute any [misconduct in public office] offence.”

The department also said Chow’s dealing with Leung in the Legco investigation “would not affect the proper functioning of the [inquiry]. There is insufficient evidence to prove that such misconduct was serious enough to establish the offence of [misconduct in public office]”.

CY Leung warns Democrats to back off UGL investigation

Democrat Lam, who also previously lodged a complaint against Leung with the ICAC, said he was “astonished and puzzled” by the agency’s decision. He urged the department to reveal the legal advice in full or he would move a non-confidence motion against Secretary for Justice Teresa Cheng Yeuk-wah.

However, pro-establishment lawmaker Priscilla Leung Mei-fun, an adviser to the central government on the city’s constitutional matters, said the evidence in the case was clear. She would push for the Legco inquiry to produce a concluding report, effectively ending its 1½-year probe.

Barrister and former ICAC chief inspector Stephen Char Shik-ngor said questions remained unanswered and urged the department to explain.

“The department’s statement did not say clearly whether DTZ had agreed that Leung could accept the money,” Char said. “There were other directors on the DTZ board, why was only Leung paid? Why not others? Did the ICAC investigate that?”

Char also said the case should not be dropped because a “potential or perceived conflict of interest” could also constitute misconduct.

Additional reporting by Alvin Lum and Danny Mok