TNAG-2764-FCO40-3981-UK-Hong-Kong-Scholarship-Scheme-donation-to-the-UK-Governme-1993 — Page 93

Reference

HWB 785 PC/ 285/393/1

Da: Sch

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Ms Haspelt 27/:/43

Hong Kong Dept

RECE!

·3 FEB 1993

DESP INDEX

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ACULA

SK TANG BEQUEST AND UK/HK SCHOLARSHIPS

1.

Thank you for your minute of 22 January and for the copy of the Solicitor-General's Opinion. We spoke on 22 January and I have reflected further. As a result I foresee further difficulties:-

(i)

(ii)

The Bequest currently invested in Hong Kong, seems to be earning a significantly high rate of interest/return that, in present circumstances, looks unlikely to be on offer in the near future in the UK. In Hong Kong 10% on £666,000 is £66,000 per annum. Even a 5% return in the UK will produce only some £30,000 a year - this would not even fund 3 full costs scholarships a year, and would be well short of our current commitment to funding UK/HK Scholarships (see (ii) below).

The UK/HK Scholarships scheme funded by the SK Tang proceeds from Hong Kong investment is now firmly established and successfully operating from Hong Kong with a Hong Kong based Committee, including representatives from the BTC and local British Council Office. We are committed to 85+ contributing £185,000 pa to the Scheme from 851690+3

1993/94 to 1995/96. We have agreed there should be a joint review of the Scheme and its future funding in 1994/95. Will it really be practicable at least before 1997 to try to bring the principal back to UK with the risk of losing interest income and presumably cutting the ground from under the present scholarship arrangements? I do not think we can just abandon the present scheme and attempt to replace it with one operated from the British Council here.

(iii)

(iv)

Whilst it might be practicable at or just before 1997 to transfer the two-thirds of the Bequest principal from Hong Kong to the UK and set up some new scholarship arrangement (presumably running down the existing programme at least 3 years before 1997 to take account of 3 year PhD or first degree commitments), in resource terms the likely replacement scheme will be a pretty lame duck. (i) above indicates we may only have some £30,000 at our disposal. The matching money which is now going into UK/HK Scholarships from the Hong Kong side (the Royal Hong Kong Jockey Club) presumably cannot be counted upon after 1997. With such a small amount of money at our disposal. I wonder whether there is really any point in going the lengths of getting the British Council to set up some sort of Trust.

Were UK/HK Scholarships to end, the ideal option would be for us to take in the SK Tang money and

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