Harrow International School Hong Kong (HISHK) awarded management contracts worth HK$31.84 million (US$4.1 million) to Harrow International Management Services Ltd. (HIMS) whose directors control an offshore company that owns the school, Ming Pao Daily reported Thursday.
The contracts were awarded between 2011 and 2013.
Hong Kong tycoon Daniel Chiu is one of the four directors of HIMS, of which he is chairman. He is also chairman of the school.
The education ordinance prohibits directors of non-profit international schools from receiving income.
But as directors of a private professional services firm, these directors are entitled to payment.
Of the HK$31.84 million paid to HIMS, HK$27.35 million was for service charges, HK$3.455 million for salaries and HK$1.03 million for administration fees.
Education legislator Ip Kin-yuen said Harrow was offered a plot, interest-free loan and tax relief because it was set up as a non-profit international school.
The government made it clear it cannot distribute assets or benefits to its directors. He said HISHK might have broken the law.
Ip said the Education Bureau and the school should explain the matter.
HISHK should explain if the contracts were awarded in open tenders given the amount of money involved.
Civic Party lawmaker Chan Ka-lok said HISHK may have used accounting tricks to let its directors receive bonuses via HIMS.
Michael Tien, deputy chairman of New People’s Party, said education authorities have a duty to ensure that the money ploughed into non-profit schools is used only to fund school operations.
In 2009, the government approved a land grant to HISHK worth HK$600 million on a 10-year lease to build its campus in Tuen Mun, along with an interest-free loan of HK$272 million, the report said.
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