Gerry Shirley picks through his morning mail with fevered interest, half-dreading and half-hoping to see the latest scandal-sheet on the soap opera being played out behind the friendly facade of one of Hong Kong's oldest clubs. Like a select number of other long-time members of the Hong Kong Football Club, he has been getting regular, anonymous instalments of poison-pen literature. Photocopiers and fax machines are being worked overtime to spread the accusations of flagging finances, corruption, racism, mismanagement and cronyism to the wider membership. Bars have been set alight with speculation. 'Someone's got the ache,' says the straight-talking Mr Shirley, a former general committeeman who was himself suspected by some members of being one of the authors. 'But, I hasten to add, I'm definitely not writing the stuff.' The stuff in question - the contents of the letters - are explosive. Some members fear that if all the claims are proved, or if the financial bottom line does not dramatically improve - the future of the cliquey sporting fraternity founded by James Haldane Stewart Lockhart in 1886, the year before he became the colony's Registrar-General aged just 29, would be in doubt. Unfortunately for current club chairman Alistair Macleod and his 17-strong general committee, at least some of the claims have a ring of truth. 'It is how they are interpreted that is the key,' says Paul Foster, a concerned member and senior police officer. 'The atmosphere there these days is, well, fraught. There is constant finger-pointing. This is a club I've loved for a long time, but its tradition of friendship and happiness have changed lately.' It is not difficult to see why, if a two-page letter headed 'The Racial Policy At The Hong Kong Football Club' reflects the private views of some of the Chinese members. According to the invective from the anonymous writer of the letter, 'there are far too many officers on the [club] committee who absolutely hate the Chinese people'. 'These officers are the last of the imperialists and colonists who wish to retain power for as longer [sic] as they can and it is up to the decent and honourable members of this club to now put an end to this and tell these imperialists and colonists that Hong Kong and indeed the Football Club ceased to be British after 30 June, 1997. Many local members now refuse to go down to the club because they are insulted by the committee and by some of the gweilo members. Times change and our club must change and it is up to the Chinese members to change it because the gweilos will not!' Long before the handover last July, forward-thinking sporting and social clubs whose roots were planted by expatriates for expatriates began to plan for a new era. Local members were encouraged to become more actively involved in the running of their clubs. Their preferences - in everything from restaurant cuisine to entertainment - were dutifully noted in the certain knowledge the racial mix of membership would steadily swing around. Survival, for many clubs, depended on drawing affluent Chinese to replace departing expatriates. The power to make such changes is vested with general committees, which make almost all the rules, balance budgets, approve or reject new members and instruct management on how to run things on a daily basis. For clubs to change with the times, the committees had to become 'more Chinese'. Today, for example, that one-time bastion of crusty colonialism, the Royal Hong Kong Yacht Club, has a 15-member committee which includes eight Chinese. Its Canadian-Chinese chairman oversees a 3,000-strong active membership of which the ratio of Chinese to non-Chinese is estimated at 30:70. Another expatriate watering hole, the Kowloon Cricket Club, reckons it has a 65:35 ratio of Chinese to non-Chinese members. Its 15-strong committee includes five Chinese and four Indians. Back across the water, the Hong Kong Cricket Club boasts a 25:75 ratio, with two Chinese on its 11-strong committee. The situation at the Football Club is starkly different. To a man (no women have ever been on the committee), Mr Macleod's committee is made up exclusively of Westerners, all bar two being British. Veterans cannot recall a Chinese member ever standing for the general committee, let alone serving on it. However, more than 50 per cent of the membership of the club, which 10 years ago was an expatriate haven, are Chinese. Mr Macleod and several other members interviewed insist Chinese are more than welcome, but have never volunteered 'for the sheer drudgery and hard work of being on the committee'. 'We regard ourselves as a multi-racial club,' says Mr Macleod. 'Why don't we have a multi-racial committee? We run a democratic committee. Anybody can stand for election to any position. Unless there is an underlying serious problem that we have missed, I think that for anyone to suggest we have a racial policy would be very damaging. I find it absurd.' Asked why there is no Chinese restaurant, and why the club magazine is printed solely in English, Mr Macleod replies that changes are on the drawing board. 'It is an historical fact that this club was 90 per cent Western until about 10 years ago,' he adds. Whoever was behind the 'racial policy' letter did not stop at imploring members to rise up in unison against Mr Macleod's committee. New general manager Mark Pawley, hired from abroad after a previous committee sacked his predecessor Malcolm Davis, and sports manager Tony Sealy, are also targeted by the letter writer's broad brush (the two strongly reject charges they are racist). 'Let some of the good and decent Chinese members be given the chance to be officers and run our club,' the letter says. 'Now is the time for action.' In the past few months there has been a handful of similarly barbed letters, prompting apoplexy, say sources, among the more sensitive souls on the general committee. Each letter is typed. Writing styles vary, suggesting a number of people are producing the diatribes (although amateur sleuths at the sportsman's bar wonder if this is a ruse to throw them off the scent). 'Who is behind them? It could be any one of about a dozen people,' says John Charleston, assistant football coach and prolific writer of (signed and less venomous) letters of complaint himself. 'We have our suspicions, but it would be unethical of me to say. Of course, it's a hot topic.' To newer members of the sprawling Football Club, with its gleaming marble entrance, sweeping views across Happy Valley and impressive array of sports and leisure facilities, the only reminders of the way it used to be are old photographs and the reminiscences of longtime members. One member described it as a 'spit and sawdust club' in the 1980s. There was little money in the club's coffers and the facilities showed their age, but an excellent camaraderie made it immensely popular among mostly expatriates. In the club's five official sports - rugby, football, hockey, squash and lawn bowls - expatriates always dominated. They still do, triggering another racially-led complaint. Although there is a three-year wait and a $200,000 fee for social members, you can become a sporting member for just $20,000 by demonstrating both ability and willingness to compete for the club. The result is that the vast majority of new social members are Chinese forking out more than $200,000, while the vast majority of new sporting members continue to be expatriates for $20,000. Denying the imbalance is deliberately orchestrated, Mr Macleod argues that fewer Chinese than expatriates want to compete in rugby, hockey and squash. Whether the club will add sports such as the more popular tennis (there are six floodlit courts in the building) is the subject of current debate. The Football Club changed most dramatically several years ago after it was made an offer that seemed too good to be true. Its current sprawling new building and more than $35 million to help run it came courtesy of the Jockey Club - because it wanted to expand its tight racetrack. But after being handed the original golden calf (resented by some members who felt the Football Club's identity had been lost), trouble loomed. By the time of the December, 1996, annual general meeting, a few months after work on the new clubhouse had been completed, a wave of opposition was building against Malcolm Davis, the general manager who had been hired in 1982 with a brief to make the club more professional. Amid internal politicking on the general committee (the then chairman Nigel Bennett considered legal action over 'ongoing personal attacks' on himself and others) and ICAC investigations into alleged financial impropriety by certain people connected with the club, the position of Mr Davis was shaky. Plots and counter-plots were hatched in the wee hours at Wan Chai's Big Apple bar. Some members expressed disquiet at Mr Davis's salary of around $100,000 a month, not including perks. The fortune he had made by selling debentures on commission also rankled. The circumstances of the purchase and renovation of a couple of Macau flats, meant for the use of members, did not help his cause. Mr Davis says he was 'completely exonerated' by the ICAC in every area. But the upshot was that after 15 years of service, he got his marching orders and was told to finish by September, 1997. It has been an acrimonious parting which may yet end in the Labour Tribunal. 'I feel that he has been unfairly maligned,' says Alan Robertson, a former chairman and vice-president. 'To accuse the club of being mismanaged over the last X number of years is totally erroneous. It's been well managed. I used to be down there every day of the week, but it's not the happy place it was.' Offered the opportunity to comment on Mr Davis and his record at the club, Mr Macleod declined. 'It would be wrong for me to comment on whether the club has been mismanaged, but it has grown way beyond what it was in the last 20 years,' he said. 'It needs professional quality management. That is why we have changed our management and why we will continue to improve it.' 'I believe that the club got too big for the man,' says Mr Shirley. '[Davis] was an excellent manager for years for the type of club we once had. He's definitely a scapegoat - it's easier to sling the mud at the last bloke out. Unfortunately, he's not whiter than white.' Some members of the current management and general committee unsubtley hint that the leaving of Mr Davis and the distribution of anonymous letters are connected. Mr Davis denies the charge. 'I do not agree with anonymous letters, have never written one and am not about to start in my late stage of life,' he told the South China Morning Post from his home in England. 'Having said that, I do agree with most of the contents of the letters and I know a lot of the facts to be true.' Apart from the letter alleging racism, the Football Club's parlous finances have been the subject of spirited conjecture. Mr Shirley says that last year the club had an operating deficit of $23.5 million (Mr Macleod refuses to reveal the details). 'We survived by selling $20 million worth of debentures and that's fine, but you can't keep selling the silver forever,' says Mr Shirley. An informed source says the deficit over the past five years amounts to a staggering $50 million. Mr Davis, he says, must shoulder a lot of the blame for not biting the bullet sooner and reducing the staff salaries bill, which exploded with the move to the new clubhouse. Clearly, says Mr Shirley, revenues must rise and costs shrink if the club is to survive as an independent entity. 'What happens if word gets out that we are in financial trouble?' he asks. 'Will you put up $1 million (corporate membership) or $200,000 (social membership) if the word going around was that the club would only last a few years?' New general manager Mark Pawley, motivated, one source says, by the promise of a $750,000 bonus if he can wipe out the deficit, has drawn the ire of grumbling staff. Morale, according to yet another letter, is at rock bottom. Mr Pawley has pared certain staff benefits and put managers on notice that their performance will determine whether they receive bonuses in future. Several long-serving staffers who were more club fixtures than work horses have been let go. The new mean and lean ways of a club which was once noted for its generosity have come as a shock. 'It's been an interesting time,' Mr Pawley, formerly of an Abu Dhabi club, says with measured understatement. Mr Macleod, who took over with a new committee and a mandate for positive change last year, admits he sometimes wonders whether he has been handed a poisoned chalice. He plays down the troubles. 'Anonymous allegations have been made that are seriously libellous,' says Mr Macleod, who heads the Emirates Bank in Hong Kong. 'They are being made by somebody who has been very close to the centre and has access to privileged information. My personal suspicions are that it is one person who has dressed up a number of letters. Responding gives credence to them. 'In the first six months of this year we have seen dramatic improvements in productivity, efficiency and, ultimately, profitability. The club has a very strong net worth. We are managing change, and we believe it is in the best interests of members and staff.'