Hong Kong Christian charity blames freezing of funds for school closure
- New board of directors of scandal-hit Christian Zheng Sheng Association wants to resolve crisis prompted by alleged HK$50 million fraud
The new board of directors of a scandal-hit Hong Kong Christian charity has argued that the freezing of its funds by police was behind the decision to suspend the operation of its boarding school for drug addicts.
The members of the board of the Christian Zheng Sheng Association released a statement on Saturday seeking to “clarify various doubts and misunderstandings”, after authorities slammed the organisation and wanted former directors allegedly involved in a HK$50 million (US$6.4 million) fraud.
“All the current decisions made by the board of directors of the association, including the suspension of the operation of Christian Zheng Sheng College, were painful and helpless decisions made by the unanimous resolution of the directors present based on the situation of funds being frozen, in arrears and blocked,” the statement, issued by the board’s chairman Lau Man-wo and vice-chairman Siu Yu-fat, said.
It said HK$4 million in the association’s bank account was frozen by police, while the government owed it HK$3.5 million in project fees and the Social Welfare Department also stood to pay it HK$600,000.
It said the organisation was willing to sell its properties to overcome the difficulties, but added police would have to release the funds so that “we can operate normally”.
The Christian Zheng Sheng College, established in 1985 to help drug addicts and operated by the association, said on Friday that it would close on July 7.
The decision was announced more than four months after police arrested four directors of its parent organisation and sought another three for allegedly stealing HK$50 million in donations raised to support the institution’s operations.
Authorities said the impending closure would take a toll on about 10 students and eight teachers.
Secretary for Education Christine Choi Yuk-lin stressed on Saturday that the government would help the affected students but would not provide more funding to the school in Chi Ma Wan on Lantau Island
“If some students want to keep studying, we will help them find appropriate school places,” she said. “If some wish to start working, as the age gap between the students is quite big, we will also communicate with them.”
Choi said she was confident there would be a “seamless transition” as the administration had been following the case for some time.
Different government departments were also expected to follow up on the teachers currently working at the school, she said.
Choi reiterated it would be “unreasonable and irresponsible” for the government to provide public funding to the school to help sustain its operations.
“The government’s resources are public funds … if we do this, we will be allowing these situations to happen and take a responsibility that should be taken up by the organisations themselves and hand it to society,” she said.
On Friday evening, authorities said the relevant department had yet to receive any formal notice of the closure decision and slammed the “ugly and selfish” behaviour of wanted founder Lam Hay-sing and principal Alman Chan Siu-cheuk, accusing them of disregarding the well-being of the students and teachers.
The government said it provided the college in March with more than HK$1.8 million in emergency funds from the Beat Drugs Fund to help students prepare for their public exams.
“If the college ceases operation, the responsibility is entirely on the former directors of the association who were wanted and fled the city, including Lam Hay-sing and Alman Chan Siu-cheuk, as well as the Christian Zheng Sheng Association which had close links with them,” it said.
The pair are among the three directors wanted by police. Another four were arrested on suspicion of conspiracy to defraud in January.
The association’s board of directors said in its statement on Saturday that the organisation cooperated with the police investigation but it could not disclose specific details.
It added that the members of the association’s new board of directors came from all walks of life, adding that Lam and Chan had already resigned from their posts as directors.
A CEO notice confirmed by college supervisor Chui Hong-sheung and seen by the Post blamed police for freezing the association’s bank accounts, which stifled its working capital, and promised to settle outstanding salaries and severance payments.
Chui said he had not participated in the directors’ meeting to discuss the school’s closure and was only notified of the decision afterwards.
He understood the institution’s bank account was left with about HK$100,000, which could only be used for emergencies, such as utility bills and students’ meals.
The supervisor earlier said the school had borrowed HK$40 million from its parent organisation.
The Mandatory Provident Fund Schemes Authority, the city’s pension regulator, said the college had yet to pay HK$210,000 for its 20 employees’ retirement fund and surcharges between February and April.
The authority said it would recover the contribution on behalf of the college staff if the school became insolvent and had to go into liquidation, adding that it would follow on whether the employer would make the payment for May.
