Fight escalates for control of elite school

PUBLISHED : Monday, 12 September, 2011, 12:00am
UPDATED : Monday, 12 September, 2011, 12:00am

A battle for control of one of the city's most exclusive schools is about to escalate after foundation members who were dismissed in a boardroom coup threatened to make their grievances public.

The row at the Chinese International School began in October when its board of governors removed 26 of more than 40 members of the school's foundation, including co-founder Nelly Fung, who helped to establish the school in 1983.

The members were dismissed after the school's board of governors changed its rules to allow only board members to serve on the foundation.

Foundation members who were dismissed include some of the city's most influential figures and institutions. Some of them have now decided to fight back, according to a source close to the foundation, who said that the board's actions amounted to a reverse takeover of the foundation.

Those removed from the foundation include Victor Fung Kwok-king of Li & Fung, the global sourcing company; Peter Woo Kwong-ching, chairman of Wheelock and Wharf; an official representative of the Jockey Club Charities, which provided HK$70 million for the construction of the school's campus in Braemar Hill; Selwyn Mar, former president of the Hong Kong Institute of Certified Public Accountants; Professor Felice Lieh Mak, head of the Medical Council and former chairwoman of the English Schools Foundation; former chief secretary David Akers-Jones; and Nigel Rich, a former taipan at Jardine Matheson.

Although many former members - including Akers-Jones, business tycoons, Lieh Mak and the Jockey Club - are not contesting their dismissal, the source said others were not prepared to accept this state of affairs, and were now poised to make further details of the dispute public.

'The board has no legal authority to do it,' said the source. 'The foundation should have oversight over the board. Now you have governors governing and selecting themselves. That flies in the face of any sensible or decent corporate governance.'

In a reply to queries from the South China Morning Post, board chairman Geoffrey Mansfield wrote that some foundation members had threatened to take legal action when they were told in October that they had been dismissed.

He insisted that the board, not the foundation, had oversight of the school and that the board had the power to dismiss foundation members. He said those dismissed under the new rule had played little or no role in running the school.

'Of the then 26 past members, many responded positively that it was a sensible step to have taken,' Mansfield wrote. 'A few had concerns and governors met with them on various occasions to explain this decision at length. Despite these efforts, we received a threat of legal action if the board decision was not immediately reversed.'

He said that, in the past board governors also became foundation members, whose numbers swelled as retired governors stayed on.

'In the course of many board meetings the governors considered the issue of the swelling ranks of members and came to the conclusion that for good corporate governance reasons, it was appropriate to remove any confusion as regards those responsible for the governance of the school,' Mansfield wrote.

In the October letter seen by the Post, Mansfield informed the dismissed foundation members that there was 'no possible corporate governance rationale' in retaining them as they did not have 'primary responsibility for oversight of the day to day operations'.

He told the Post that lawyers had told the board that it had the authority to remove foundation members.

But a second source, close to the foundation, said Mansfield's claims confused the function of the foundation, which should have oversight of the board rather than overseeing the school's day-to-day operations, which was a management duty.

'Many of those removed probably don't care because they sit on so many other foundations and executive boards,' the second source said.

'But those who have worked for the school for years and decades - who have children or grandchildren at the school - are not so ready to give up. Why would anyone want to remove association with such powerful and well-connected people when any other school or charity would die to have them on board?'

The school is one of the most sought-after in the city, with annual tuition fees of up to HK$164,000.



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