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Since 1986, two thirds of the balance on the annual and accrued interest has been put towards funding the UK Hong Kong Scholarships programme. This programme is jointly funded by HMG and the Royal Hong Kong Jockey Club (on behalf of the Hong Kong Government). The total annual costs (for around 25 students/awards at any one time) is approximately £330,000. The UK's half share of costs is funded by £40,000 provision from FCOSAS resources and the balance from the accrued and annual interest on the two-thirds of the Sir SK Tang Bequest. The one third accrued interest designated for the Institute of Cancer Research has so far remained untouched.
4. Hong Kong Department have been trying to establish since 1986 arrangements in the UK for dealing with the administration of the Bequest. The history is one of frustration, delays and inconsistent advice best left untold. We now have advice in the form of an opinion of Counsel
(secured by the Treasury Solicitors) recommending the setting up of a Sign Manual Direction which would allocate the funds to the British Council and the ICR, and ensure that the donor's wishes are met. Setting up a Sign Manual Direction would also be the least elaborate and least costly way of taking things forward; an important consideration given that although the gift is a sizeable one, the interest should best be spent as intended (rather than on administration costs).
5. We should agree terms with the British Council and the ICR, which would leave the FCO with no further involvement in the day to day administration of the funds and ensure that the wishes of all involved are met. In the case of the ICR, once terms have been agreed (and written into the Sign Manual Direction) we need have nothing further to do with this portion of the fund. However, in the case of the funds set aside for scholarships further administrative arrangements will need to be made. From earlier discussions with the
British Council (1988) we know they would prefer a Declaration of Trust as the means of accepting the administration of the bequest. They drew up a draft in 1988 which we considered gave them an excessive degree of control over the management of the funds and did not take account of Sir S K Tang's wish that only the interest should be touched. We could accept a Declaration of Trust provided it contained the following elements:
the capital itself may not be touched;
- funds must go towards scholarships for Hong Kong students studying in the UK and may not be used to fund other scholarship budgets;
the criteria for choosing students should be agreed between the British Council and ourselves.
The details will obviously entail further discussion but we
SKTANG/subjan
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