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Chinese University confirmed it had held a dormant, unprofitable BVI firm since 2000. Photo: SCMP Pictures

Two more Hong Kong universities admit they also have offshore companies after Panama Papers exposed PolyU

Renewed calls for a review of transparency standards after fresh disclosures by the University of Hong Kong and Chinese University

Two more Hong Kong universities have admitted they have offshore companies, days after the leaked Panama Papers exposed the secretive commercial operations of Polytechnic University.

The disclosures by the University of Hong Kong (HKU) and Chinese University of Hong Kong (CUHK) prompted more calls for a review of the transparency standards for business dealings of publicly funded academic bodies.

A number of pan-democratic lawmakers, including Kenneth Leung of the accountancy sector and Dr Fernando Cheung Chiu-hung, a PolyU academic, said they planned to investigate the matter and raise it in the Legislative Council after the Post’s exposé.

Hong Kong government sidesteps calls for action after revelations in Panama Papers

The first university discovered to own secretive BVI firms, PolyU, faces more questions as it did not name the two BVI firms in its financial reports.

CUHK has consistently done so in its financial reports.

In reply to a Post inquiry, HKU confirmed it owned five BVI firms, two of them set up in 2000 to hold 11.7 per cent shares in an unnamed biotechnology company. They had been dormant for some years, it said.

The other three firms were set up by Versitech, a not-for-profit technology transfer arm wholly owned by HKU. One had been dormant and the two still in operation hold 20 per cent shares in two medical services companies.

While defending the use of offshore companies as a “measure of risk management” without using public money, HKU pledged to consider closing dormant companies when necessary.

Hong Kong’s innovation minister and PolyU in new Panama Papers revelations: shares funnelled to pro-Beijing tycoon’s company

Chinese University confirmed it had held a dormant, unprofitable BVI firm, HKIX Hong Kong Limited, since 2000, adding: “The original purpose is take advantage of the flexibility in shares transfer in BVI for spin-offs in the process of technology transfer that might ... attract international investors.”

The remaining five publicly funded local universities said they had no offshore companies.

CUHK has given more details than HKU or PolyU, saying the decision to set up the firm was approved by the governing council.

PolyU, meanwhile, set up companies in 2012 and 2013 upon the approval of its president, Timothy Tong Wai-cheung, calling it a last alternative to exit from loss-making joint ventures. Some council members told the Post they had no recollection of being told about such firms.

A closer look at the financial reports indicate inconsistent levels of disclosure among institutions.

Usually the council only exchanged ideas on hotly debated issues. Other matters like forming companies were quickly dealt with by a show of hands
Former lawmaker and CUHK council member Cheung Man-kwong

While CUHK listed the firm in its financial reports, HKU included only one of five BVI firms in annual reports. But Versitech named all its BVI firms in publicised reports.

PolyU’s BVI subsidiaries were not published anywhere, even though it insisted it complied with professional standards. The firms only came to light after the leak of Panamanian law firm Mossack Fonseca’s documents, uncovered based on a signature of Nicholas Yang Wei-hsiung, then PolyU vice-president and now Hong Kong’s secretary for innovation and technology.

Lawmaker Leung said Chinese University demonstrated a good example of proper disclosure: “The schools should comply with the highest standards of accounting disclosure and obtain the approval from the [council].”

But former education sector lawmaker Cheung Man-kwong, a CUHK council member in 2001, said he had no memory: “Usually the council only exchanged ideas on hotly debated issues. Other matters like forming companies were quickly dealt with by a show of hands.”

PolyU owes all of us an answer after ‘Panama Papers’ reveal some dubious dealings

HKU council member Eric Cheung Tat-ming said the council would look into matters that would potentially pose a “reputational risk”.

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