A university we pay for owes us transparency
We are used to hearing about massive losses caused by people on mega-salaries during the financial crisis, but few expect to see that happening at one of our universities. Polytechnic University has, sadly, distinguished itself by the size of its investment losses, the number of loss-making companies and subsidiaries it has set up, and the big pay packets of its most senior staff.
A disturbing pattern has emerged: a lack of transparency and accountability leading to questions about conflicts of interest. A law enforcement agency is investigating. We don't know if laws have been broken. But even assuming all its transactions currently being questioned prove to be above board, a public and educational institution such as a university must function in a more transparent manner in a modern society like Hong Kong.
The embarrassing losses and questionable business might not have come to light if the working environment at the university had not deteriorated to such an extent that its more junior staff felt demoralised and angry, causing its members to issue an open letter. The questions and charges raised in the letter are extremely serious.
With reason, they want to know how an eye-popping HK$904 million was lost last year, about half of which was incurred from the sale of investments involving high-risk stocks and derivatives during the global credit crunch. Explaining the losses yesterday, former university president Poon Chung-kwong said no one could have predicted the financial crisis. He was right to an extent. But while losses were inevitable during the worst period of the crisis, legitimate questions are being raised about why a university should have moved away from a conservative investment portfolio to one involving more high-risk financial instruments.
Adding to the questions is the fact that dozens of companies and subsidiaries, set up over the years, have been haemorrhaging money. Collectively, they lost HK$83.4 million last year - and HK$332 million cumulatively over the past five years.
Their directors were drawn mostly from among the ranks of the most senior university staff members, who already earn between HK$1.8 million and HK$4.8 million a year in regular salary and are paid extra for their work on the companies. The university needs to explain why it is necessary to operate companies that persistently lose money and how the performance of its most senior staff members, especially those with multiple company directorships, has been measured.
Meanwhile, HK$1.4 billion worth of business deals have been done with companies with links to several members of the university council. University spokesmen said all such deals went through established procedures before being approved. Releasing the full records to the public will help clear the air.
Then there is also the question of fairness. While some lower-level staff members have been laid off and others have had funding cut or cancelled, the more senior people continue to enjoy high pay and special privileges. Some say they suspect they have been put on the chopping board for the sins of their bosses. That may or may not be the case, but the absence of transparency has made it difficult for outside parties to have a fair assessment.
At a time of crisis and losses, the most senior managers and directors should take the lead and share the pain. For the sake of its reputation and future, the publicly funded university must reform its governance and make its directors more accountable.