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A PRESTIGIOUS club of Harvard graduates has called a meeting of its 300 members to consider taking legal action against a dismissed president to recover allegedly missing funds.

 The Harvard Club of Hong Kong has told members it will need their approval to sue Steve Chik for what it claims is outstanding cash.

 It said Mr Chik had returned most of the money.

 A confidential legal opinion sent to alumni with the meeting notice revealed industrialist York Liao made a $2.6 million donation to the club in December 1996, which Mr Chik allegedly transferred to a company he controlled.

 The letter, from solicitors Clifford Chance, said the donation - which Dr Liao had intended to go to the American university - was found to be missing a year later.

 The missing funds affair came to light when Dr Liao, executive director of liquid crystal display manufacturer Varitronix, asked the university whether it had received his donation, he said.

 'The handling of this by the Harvard Club does raise some eyebrows in Hong Kong. I'm certainly not pleased with that,' he told the Sunday Morning Post.

 Dr Liao said he had wanted to keep the donation anonymous. In a statement to members, the club said the university advised at the time it was 'having difficulty' contacting Mr Chik.

 He was removed from the post of president by the club's executive committee in February after the funds transfer was uncovered, said the lawyers.

 An internal investigation then found funds from the club and its foundation worth $1.33 million were paid to companies associated with Mr Chik, said the letter.

 Including the Harvard donation, they totalled $3.9 million.

 A report by the club's financial committee said the company, Regalmax, guaranteed a six per cent return on the funds to the club which were due to be repaid nearly five months later.

 Mr Chik 'apparently told [the donor] the club would forward the funds to the university and claimed the procedure would minimise taxes', said the report.

 The payments made to Pacific Asia Partners Limited and Pacific Asia Asset Management were 'said to be for professional and secretarial services', said the legal letter. Following approaches from the club, Mr Chik had returned about $3.4 million, it said.

 The university was then paid $3 million in lieu of the donation.

 The Ivy League alumni club, which hosts good food discussions and holds an annual ball, has been shaken by the affair.

 In the wake of the discovery of the missing donation, it convened a high-powered committee of Harvard graduates, including Trade Development Council chairman Victor Fung, former Securities and Futures Commission chairman Anthony Neoh and Futures Exchange Commission head Geoffrey Yeh, to advise on the matter.

 The committee advised seeking legal options from the solicitors.

 A 'strong case' existed for saying Mr Chik had breached the club's constitution and by-laws, the lawyers' letter said.

 'The articles do not permit the president or any other member of the club to use the club's funds for investments, whether in their own businesses or otherwise.'  It said club members could make a breach of contract claim against Mr Chik for the alleged shortfall in the amount repaid, plus interest.

 The club's funds were now 'some $900,000' less than they should be, it said.

 Mr Chik could not be contacted for comment.



Suit looms over elite club funds