Tuen Mun’s Harrow International School has paid around HK$240 million in consultancy fees to a private firm with overlapping board members and directors who could be entitled to profit from the deal. As a non-profit, board members are forbidden from receiving income and assets from the school.
Two registered charities that manage the school’s finances – Harrow International School (Hong Kong) Limited (Harrow International) and Harrow International School Foundation Limited (Harrow Foundation) – together paid between HK$27.4 million to HK$44.6 million in consultant fees over seven years. The sums were paid to their sister company Harrow International Management Services Limited annually between 2013 and 2019, according to financial reports reviewed by Apple Daily.
All three entities are under a parent company called Asia International School Limited (AISL), an offshore private firm registered in the Cayman Islands.
As a non-profit school, the Education Bureau (EDB) bars its board members from receiving any income and assets from it. The two registered charities managing Harrow’s finances also enjoy tax-exempt status under Hong Kong law and its directors are therefore barred from receiving emoluments from the entities.
However, two of the school’s board members – Daniel Chiu Tat-jung and Leung Wing-Cheong – are also directors at Harrow International Management Services Limited, the recipient of the consultancy fees paid, Apple Daily reported. Chiu, founder of the school, is also a director and founder of AISL. As directors, they are entitled to receive emolument and share profits from Harrow Management and AISL, although it is unclear whether they received any, as the two private firms are not required to disclose their finances.
Meanwhile, the school’s sprawling colosseum-style campus is built on government land in Tuen Mun leased for HK$1,000 per year, the newspaper reported.
Under its service agreement with the EDB, the school has also fallen short on its obligation to reserve 10 per cent of its revenue from school fees for scholarships and subsidies. According to financial statements, the school has – in seven years – spent only 3.6 per cent of its stated revenue on subsidies for students.
“Neither of our School Governors nor Company Directors receive any bonuses or fees from the School. Only staff members of the School are entitled to a performance-based compensation,” a Harrow spokesperson said in an email response to HKFP‘s enquiries. They stopped short of stating whether the individuals received fees from sister companies.
“Scholarship funds were paid to our students under the School’s various scholarship programmes, and the amounts therefore vary from year to year. We believe that this operation is in full compliance with the Hong Kong applicable laws and regulations,” the statement continued.
“Harrow Management has been providing education related services to the School which include supervision on educational quality assurance, performance and policies, school curriculum development, academic staff review and appraisal, and providing advice and support on international staff recruitment. The company also provides supervision on strategic, branding, financial and operating matters.”
In response to Apple Daily’s enquiries, the EDB said that school sponsoring bodies are required to include charter terms that ensure any revenue and assets are to be used solely for the purposes stated by the charter. They are barred from transferring any assets or payment to any members, for example as dividends and bonuses. The bureau will follow up if violations are found, a spokesperson said. Harrow International School is required to submit audited reports to the bureau, which may request that the school explain its financial situation as needed.