Debentures/capital levies charged by private schools may be illegal and will be subject to scrutiny.

Originally Published on January 14, 2020 The Education Bureau may finally be held accountable for turning a blind eye to private schools charging extra in the form of capital levies and debentures.

In a long overdue direct investigation report by the Ombudsman, the EDB have been rightfully criticised.

Up to now, private schools only need to seek approval to charge tuition fees. All other fees have been considered "a private financial arrangement between the schools and parents" not requiring approval from the Bureau. So, debentures, capital levies, capital notes, etc have not been approved in accordance with the law.

EDB is now in the process of evaluating the situation to ensure that the financial arrangements of private schools comply with legislative provisions. Seems ludicrous that this is only happening now, but better now than never.

We do not expect that schools will not be required to refund any fees. However, they will hopefully be revising, reducing and removing fees, ultimately making it less expensive. This is, indeed, good news, yet will take time.

We also expect that some schools will be unable to continue to operate and will close if they are unable to sell first.

Full report here: https://ofomb.ombudsman.hk/abc/files/DI_421-Full_Report_set_EN.docx

News story from the SCMP here: https://www.scmp.com/news/hong-kong/education/article/3046065/education-bureau-slammed-allowing-hong-kongs-private