23 October 2016
Questions about a potential conflict of interest could hurt the reputation of the HK Phil. Photo: Facebook/Hong Kong Philharmonic Orchestra
Questions about a potential conflict of interest could hurt the reputation of the HK Phil. Photo: Facebook/Hong Kong Philharmonic Orchestra

Hong Kong Philharmonic needs to face the music

What does the Hong Kong Philharmonic’s board of governors think about the orchestra’s chief financial officer allegedly offering over HK$1 million (US$128,860) in contracts to her daughter’s firm?

Unless it comes forward with a quick and clear answer, the reputation the city’s largest music group has been building over the past decades is at stake.

The HK Phil offered four contracts between 2012 and 2015 to Mad Music, a production house associated with Kenix Ho, daughter of Vennie Ho, senior director of administration and finance of the government-subsidised orchestra, Apple Daily reported.

The newspaper found that Kenix Ho, who runs a wedding business, shared a working space with Mad Music, a director of which confirmed they are part of the same group.

But HK Phil chief executive Michael MacLeod offered a different version.

He told the media that three of the four transactions with Mad Music came before Kenix Ho joined the production company as a part-timer in 2015.

Of the two contracts signed with Mad Music last year, MacLeod said, one was awarded because the production house submitted the lowest tender.

The other contract, for HK$350,000, was decided on by the orchestra’s event committee without tender.

The question that needs to be addressed by the governors is: did Vennie Ho declare her potential conflict of interest in regard to the contract issued to Mad Music without tender?

Also, did Kenix Ho declare to the HK Phil her relationship to its CFO?

If neither made the declaration, a case could be made that the HK Phil did offer an advantage to a firm linked to its CFO’s daughter.

But even if the declarations were made – and Vennie Ho’s superiors knew of the link and approved the transaction – it still leaves an unfavorable impression of the orchestra, a publicly funded organisation.

The HK Phil received HK$74 million, or about 56 per cent of its revenue, from the government in the 2014-2015 fiscal year.

The orchestra has an all-star board chaired by violinist and businessman Liu Yuen-sung. Governors include Airport Authority chairman Jack So Chak-kwong, OCBC Wing Hang Bank chairman Patrick Fung Yuk-bun and Swire Pacific chairman John Slosar.

Swire is the principal patron of the orchestra, to which it has donated more than HK$100 million over the past decade.

Despite the luminaries on its board, this incident reveals that the HK Phil’s governance appears to fall short of the best standards in the public or private sector.

As the largest performing arts group in Hong Kong, the HK Phil has been fortunate in attracting funding and corporate support that its peers can only dream of.

Yet it may be a victim of its own success, because even the government, when perusing its list of governors, may have been forgiven for thinking it is an organization that is run in a manner beyond reproach.

Rather than risk dismaying its fans, perhaps the orchestra could ask the Audit Commission or another independent body to examine its operating model.

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EJ Insight writer

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