Tuesday, 28 April 2015

Christopher Ho: Lies of HKFS - 7 Mins and You'll Know What's Wrong With HKFS

Lies of HKFS
7 Mins and You'll Know What's Wrong With HKFS
Translated and written by Christopher Ho Quen-thai
(This article is an abridged English version of the two series of Debunking the Numerous Lies of HKFS published on VJMedia between February and April 2015.)

Introduction
appointmentThe Hong Kong Federation of Students (HKFS) has recently been under a wave of members’ withdrawal, triggered by its various mistakes committed during the Umbrella Revolution. The author came into notice in mid-February (when the Hong Kong University Students’ Union was having its referendum to decide whether to withdraw from HKFS) various financial irregularities of HKFS and one of its major sources of finance – H.K.F.S. Fund Limited, and has uncovered numerous pieces of fact regarding HKFS’s financial situation which has long been concealed. A few of them have been addressed and clarified by HKFS, but more remain unanswered. 

Background information
H.K.F.S. Fund Limited is a company limited by guarantee registered in Hong Kong. It was called “Hong Kong Student Travel Bureau Limited” before 1994. One of its major objectives is to finance HKFS by making to the latter regular donations. The company holds in total three land properties, two of which on trust for HKFS as the beneficiary (including the office of HKFS), and the remaining one an investment property which generates rental income to finance the donations. The investment property is presently valued at around HK$13 million.

All the dishonest statements and practices of HKFS are hereby listed out.

A) All the irregularities concerning H.K.F.S. Fund Limited are, contrary to HKFS’s allegation, not merely “administrative negligence”

1. Between 2004 and 2014 HKFS had, in rampant violation of its constitution, failed to appoint student directors into H.K.F.S. Fund Limited every year.
2. The power of the said appointment lies in HKFS’s Annual General Meeting and Representative Council, and has nothing to do with its administrative body, namely the secretariat.
3. The 50th Representative Council of HKFS allowed H.K.F.S. Fund Limited to reduce the amount of yearly donation to HKFS, which was abetting the company to breach its own articles governing the amount of donation payable every year.
4. The two “reports by student directors of H.K.F.S. Fund Limited” issued in January and February contains a list of member of the company’s board of directors which was inconsistent with the information shown in the Company Registry at that time. The lists in each of the two reports were also inconsistent with each other.
5. A public statement of HKFS issued in February which attempted to explain the irregularities concerning H.K.F.S. Fund Limited contains numerous factual errors, including the relationship between the company and HKFS, and the year in which the name of the company was changed.

B) Every promise of financial reform is empty and misleading
1. The root of the irregularities is HKFS’s rampant violation of its constitution by not appointing student directors into H.K.F.S. Fund Limited every year, instead of any structural or institutional problems which need reforms.
2. The reform promised in the public statement of HKFS issued in February has turned out to be only a two-page yearly report of the “student directors of H.K.F.S. Fund Limited” submitted in March to the HKFS Annual General Meeting, with plenty of errors and unexplained inconsistencies with previous reports, including
a. Error in the date,
b. Error in the names of the directors,
c. Unexplained change of directors not even reported to the Company Registry,  and 
d. Unexplained change of estimated value of the investment property, from HK$8.7 million in the February report to HK$13.4 million in the yearly report.
3. Ridiculously, the February report, which is inconsistent with the January report, and the yearly report, which is inconsistent with both the January and February reports, have been passed without objection in HKFS Representative Council and Annual General Meeting respectively. The Annual General Meeting consists of the entire membership of the Representative Council; in other words, in only one month the same group of supposed student representatives approved two inconsistent reports in which no explanation on the inconsistencies have ever been given. Notwithstanding any promise to reform, these constituting bodies of HKFS remain total rubber stamp.

C) HKFS has probably concealed the internal conflicts as regards H.K.F.S. Fund Limited

1. The membership of the board of directors as shown from company search is still not totally consistent with that alleged by HKFS, which probably reflects internal conflicts between HKFS and the company on the one hand, and among the directors of the company on the other hand. There may well be a dispute as to the validity of membership of certain people in the board of directors.
2. This inference of internal conflicts is also supported by the fact that H.K.F.S. Fund Limited has (in breach of its articles) stopped making donations to HKFS since 2011.
3. The origin of the problem is, after all, HKFS’s failure across 10 years to appoint student directors into H.K.F.S. Fund Limited to exercise its otherwise granted power of control over the company.

D) HKFS is still trying to conceal the facts concerning H.K.F.S. Fund Limited’s investment property

1. HKFS deliberately avoids mentioning the investment property in all of its public statements and Facebook posts which attempt to answer the concern of its financial irregularities.
2. The investment property was deliberately undervalued for millions of dollar in order to downplay its importance.
3. No tenancy agreements regarding the investment property has been registered with the Land Registry for more than 10 years, rendering most information of the rentals inaccessible by even members of HKFS.
4. Owing to the increase in rental income and the failure of H.K.F.S. Fund Limited to make donations since 2011, the company now has, according to its articles, more than HK$1 million payable to HKFS.

No comments:

Post a Comment