TNAG-1981-FCO40-2814-UK-Hong-Kong-Scholarship-Scheme-donation-to-the-UK-Governme-1989 — Page 65

CODE 18-77

PJYAEM

Mr Long, CRD

}

Mr Edwards, Legal Advisers )

) Separate copies

SIR S K TANG DONATION

Reference..

1.

The British Council have now submitted an alternative "letter of intent" in respect of the administration of two thirds (£666,667) of the £1 million gift made to HMG by Sir S K Tang in 1986. This share of the gift is to be used to support the UK/HK Scholarship Scheme.

2. The British Council draft seems over complicated and does not fully represent Sir S K Tang's wishes. The following observations require consideration.

3(b)(i):

(ii)

4.

the capital should not be used for any purpose, save investment, without the prior approval of the Hong Kong Department of the Foreign and Commonwealth Office. The interest earned is to be used only to support Hong Kong Scholars awarded tertiary education courses in the United Kingdom. The expenditure of funds, both from the Sir SK Tang Trust and the Hong Kong Government, will be subject to the rulings of the UK/HK Scholarship Committee.

The British Council appear to have gone overboard from Section 4 onwards. Our intention is that the British Council act effectively as a banker/administrator. They should have NO authority to do anything without consulting us, since all we require them to do is to invest the principal amount in a bank or building society, write one or two cheques per year (payable to the Hong Kong Government) and submit to us at the end of each financial year a statement of account.

5.

I should be most grateful for your comments and ideas on how we should react to the Councils proposals. Perhaps we could have a meeting to discuss our response to the British Council next week. Would the afternoon of 7 or 8 February suit you? Perhaps we could meet in David Edwards'

office.

1 February 1989

PJ Morris

Hong Kong Department WH312

270 2653