Report comes with pledge to consider disclosure of all its subsidiary companies
STUART.LAU@SCMP.COM
UPDATED : Monday, 16 May, 2016, 12:17pm
PolyU maintains its offshore activities were legitimately formulated and breached no financial requirements. Photo: SCMP Pictures
Polytechnic University promised to consider stepping up financial disclosure of all its subsidiary companies following the Panama Papers revelation about two British Virgin Islands firms it has been running at a high level of secrecy.
In a 99-page report issued on Sunday, the university said while the arrangement of BVI firms was “formulated after due process” and legitimate, it would consider “full disclosure of all direct and indirect subsidiary companies in PolyU’s annual report regardless of their materiality”.
The report came three weeks after the Post revealed PolyU’s ultimate ownership of two BVI firms set up in 2012 and 2013 with the involvement of then PolyU vice-president Nicholas Yang Wei-hsiung, who is currently Hong Kong’s innovation and technology minister.
PolyU’s annual reports made no mention of the two BVI firms, and the university insisted that it did not breach professional financial requirements.
Responding to accusations that its governing council was kept in the dark about the offshore activities, PolyU said the subsidiaries’ annual reports were not provided to the body “in order not to burden council members”.
In its recent report, PolyU confirmed for the first time that it sold its entire HK$2.5 million investment to a company run by a pro-Beijing business for HK$20,001, through one of the BVI firms.
Nicholas Yang Wei-hsiung, pictured in January, was PolyU’s executive vice president from 2010 to 2015. Photo: Felix Wong
PolyU insisted that the original investment was non-cash and mainly involved facility provision when it formed the joint venture, Linux, in 2001 with Sun Wah Group, which is run by Jonathan Choi Koon-shum, a delegate to the Chinese People’s Political Consultative Conference.
After the joint venture became loss-making in 2005, the university left it as it was until 2010, when a review committee issued a damning report concerning its failing joint ventures and required that the university exit all such business operations.
Sun Wah, however, said that it “would like” PolyU Enterprises to remain “a shareholder of Linux”. PolyU decided at that point to set up a BVI company to handle its shares, and sold them to Sun Wah in two phases.
When it sold 2.15 million shares in 2013, PolyU took HK$20,000. But it received only HK$1 when it sold the remaining 350,000 shares.
It noted in the report: “It was considered a fair deal as Linux was in a net liabilities position … This is also a desired outcome in that PolyU managed to exit from Linux in an amicable manner. The BVI company will be struck off.”
This, along with another BVI firm holding investments in another joint venture, Digipower, was uncovered in the Post’s reports based on documents from Panamanian law firm Mossack Fonseca leaked to theInternational Consortium of Investigative Journalists.
http://m.scmp.com/news/hong-kong/politics/article/1945577/panama-papers-and-polyu-school-confirms-it-sold-its-hk25
