Hong Kong's former leader Donald Tsang abused power and was "hopelessly compromised" while in office, prosecutors said Tuesday in opening arguments at his high-profile corruption trial.

Tsang, 72, held the leadership post of chief executive for seven years from 2005 and is the highest ranking Hong Kong official to be taken to court for graft.

While Hong Kong has earned a reputation as one of the world's most open and transparent markets, Tsang's is the latest in a string of misconduct cases which are fuelling public suspicion over cosy links between authorities and business leaders.

"This case is about integrity, honesty, standards of conduct in public life," said prosecutor David Perry at Hong Kong's high court.

Tsang "exploited his position as chief executive", said Perry, in what he termed a "classic conflict of interest".

Perry said Tsang "abused" his power to further his personal interests instead of acting on behalf of the Hong Kong public.

The former leader has pleaded not guilty to three charges of misconduct and bribery relating to his time in office, each of which carries a maximum jail sentence of seven years.

He is accused of failing to disclose his plans to lease a luxury penthouse in the neighbouring city of Shenzhen from a major investor in a broadcaster -- which at the time was seeking a licence from the Hong Kong government.

Tsang allegedly approved the company's application for the licence, and also failed to declare that an architect he proposed for a government award had been employed as an interior designer on the flat.

Another of the investor's companies also paid for a refurbishment of the flat, said Perry, including a gym, tea room and calligraphy room.

Perry called Tsang's behaviour "a betrayal of public trust".

Tsang, wearing a trademark bow tie, sat solemnly in court, coughing often during the afternoon session.

In 2012 he apologised for separate allegations that he accepted inappropriate gifts from business friends in the form of trips on luxury yachts and private jets.

Hong Kong's unpopular current leader Leung Chun-ying also faces allegations of corruption over receiving a reported payment of HK$50 million ($6.5 million) from Australian engineering firm UGL before he took office.

In 2014, Tsang's deputy Rafael Hui was jailed for seven-and-a-half years after being found guilty of taking bribes from Hong Kong property tycoon Thomas Kwok.