Hong Kong Polytechnic University move to set up two offshore firms ‘contravened guidelines of institution and funding body’
Lawmaker and PolyU academic Fernando Cheung says vice-president Nicholas Yang was meant to close all subsidiaries following an earlier scandal
Polytechnic University’s questionable decision to set up two offshore firms in 2012 and 2013 and later omit any mention of them in its financial statements was in violation of the guidelines of both the institution and the University Grants Committee, the South China Morning Post has learned.
PolyU’s senior management, including then vice-president Nicholas Yang Wei-hsiung who became the city’s innovation and technology minister, is under pressure to explain why the publicly funded institution would engage in a practice normally associated with tax avoidance and hiding wealth.
Hong Kong’s innovation minister and PolyU in new Panama Papers revelations: shares funnelled to pro-Beijing tycoon’s company
In 2010, PolyU was gripped by a management crisis after a group of teaching and administration staff launched a joint action urging the governing council to improve its governance and transparency after the university lost a record HK$900 million in the previous year.
A three-member review panel chaired by Dr York Liao delivered a damning report revealing that PolyU lacked a thorough business plan, budget forecast and exit strategy before setting up dozens of subsidiaries which eventually lost it more than HK$50 million.
The report set out four key recommendations. They included halting the appointment of senior staff as directors of such companies, considering exit strategies in business plans and establishing an effective governance structure and accountability. PolyU’s management accepted the report and pledged to improve governance.
But barely two to three years later, according to the latest batch of Panama Papers studied by the Post, PolyU proceeded to launch two offshore companies which lacked accountability.
“It is apparently a blatant violation of the recommendations made by the panel,” said Labour Party lawmaker and PolyU academic Dr Fernando Cheung Chiu-hung, who led the staff action in 2010.
