But he did not further explain why some of the money was transferred to three personal accounts, which police on Thursday said were set up by the implicated principal and directors.

The case affected the public’s willingness to make donations, Chui said, adding money raised would also be frozen.

He said the incident had adversely affected a group of caring people, and that he would talk to authorities about dealing with the aftermath.

The college will continue operations despite the case, Chui added.

He said many students had graduated from the college since it opened more than 20 years ago, adding that he wondered who would benefit if its operations were suspended.

The supervisor noted the association was smeared many years ago, saying he believed that the “misunderstanding” would eventually be clarified.

According to the association’s financial statements, its income from donations reached about HK$45 million in 2020, an increase of six times compared with the year before. A surplus has been registered each year since then.

But the college itself recorded losses over the past few years. Although its income from donations reached HK$950,000 in 2019-20 and climbed to HK$1.85 million in 2020-21 before falling to HK$1 million in 2021-22, it recorded HK$4.49 million, HK$5.53 million and HK$7.59 million in losses for those financial years, respectively.

Police on Thursday said the principal and two other directors of the charity were on the run after allegedly stealing HK$50 million in donations raised to support the institution’s operations.

Four other directors of the association, which was set up almost 40 years ago to help drug addicts, were arrested on Wednesday and Thursday on suspicion of conspiracy to defraud – an offence punishable by up to 14 years in jail.

The Post has learned the three wanted directors are principal Alman Chan Siu-cheuk, 63, founder Lam Hay-sing, 69, and Chan Yau-chi. 62. The trio have allegedly fled the city.

One of the arrestees, Li Wing-hung, told local media on Friday that he acted as a “rubber stamp” while serving as a director for years and had no authority over the association’s finances.

According to Li, he had repeatedly reminded Lam to make its finances public and avoid moving the money to private bank accounts.

He also called on the three directors being sought by police to come back to Hong Kong and shoulder their responsibilities.

Barrister Jackson Poon Chin-ping said there was no local law that supervised the transfer of funds overseas by charities, with oversight usually resting with a board of directors or an internal mechanism.

Lawmaker Doreen Kong Yuk-foon slammed Hong Kong’s lack of substantial regulation for charities or their use of funds.

“There is no framework, law or department to supervise the use of donations and the operation of the organisations and their financial reporting,” she said. “The regulation is very loose.”

The legislator urged the government to establish a centralised register for charities and introduce laws that regulated the organisations’ board of directors, corporate governance and financial reporting.

Authorities should set up a commission to coordinate and supervise charities, she added.

Kong also called on charitable organisations to be more transparent and improve their corporate governance through measures such as appointing independent directors, creating donation-raising protocols and making their fund information public.

“Charities must at this moment improve their governance standards, increase transparency and accountability, as well as restore public confidence,” she said.

Police on Thursday said their preliminary investigation suggested the HK$50 million had been transferred to bank accounts in the United Kingdom and the United States, set up by the involved directors.

According to the force, the principal established a fundraising campaign between October and December 2020 to support the operation of the college and claimed the donations had dried up, leaving it in financial difficulties.

The principal called for donations of HK$300,000 a month in 2020.

But the number of donations received by the organisation was increasing, contradicting the claims made by the principal, police said.

Although the college did receive funds from the organisation, police investigations indicated an abnormal decline in the amount allocated to the institution.

More than 300 transactions involving substantial amounts of money were recorded between 2020 and 2023 in some of the bank accounts the association used to collect donations, according to the force.

The money was transferred to more than 10 other accounts belonging to the organisation, as well as three personal accounts set up by the principal and directors.

Police also discovered that about HK$50 million was transferred out of the organisation’s bank accounts to overseas destinations between 2022 and 2023.