Loans to failed events cost public $12m
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A Tourism Board-run fund is unlikely to recover the money lent to promoters of events which wrong or lost money
More than $12 million of taxpayers' money used to subsidise major events, including a Celine Dion concert, has been lost in the past five years after promoters failed to repay loans.
Stephen Ip Shu-kwan, Secretary for Economic Development and Labour, told legislators yesterday that the International Events Fund (IEF) was trying to recover $12,445,075 from the organisers of four international events who borrowed $14.8 million. Three of the events - an aviation exhibition, a basketball tournament and the Hong Kong Formula 1 Powerboat Grand Prix - had failed to materialise as promised, while the fourth, Celine Dion's Kai Tak concert on January 25, 1999, did not make enough money to fully repay the $4 million loan.
Concert organiser Arena Group still owes the fund $1,759,075.
The Hong Kong Tourism Board, which has managed the $100 million fund since it was set up in 1998, reassured the public that the days of big loans were past. 'No loans have been granted in the past two years,' said Simon Clennell, assistant manager of the tourism board.
'We will do all that we can to recover the debts. In reality, [though] we might not get it back,' .
'All the loans that we gave out satisfied some or all of the criteria [that we had decided on earlier].'
To qualify for an IEF loan, the event should, among other things, be exclusive to Hong Kong, attract international media coverage, and take place at a time which fits the Hong Kong tourism cycle.
In its quest to recover the money, the tourism board said it met debtors, sent demand letters and even asked the police for help.
In the end, all organisers except those for the Celine Dion concert were served winding-up orders.
Concert promoter Pato Leung Pak-to attributed the losses to officials' bad judgment in selecting appropriate events to assist with finance.
'The government chose the wrong organisers to support. The whole process of selecting events from applications is wrong. The government should be proactive and look for reliable organisers to finance. It needs to look into [their] background,' he said.
'The reality is that most people who really put their heart into a show or who have a good show to offer will find their own sponsors.
'The ones who ask for loans are not serious in the first place and they usually do not have a show that is marketable.'
Another source said the government should invest, not lend.
'The government can pay for 30 per cent to 40 per cent of the show. In return it will take the same percentage of the profits made. That way it will definitely get something back,' said the source. 'But if the show is cancelled the organiser must return the money. It's like how ticket holders get their money back when a concert is cancelled.'
The five-year fund will be terminated at the end of this year.