HKIS Founding Group Sues School Management Corporation for Breach of Agreement Over Four Major Disputes

The HKIS International School Founding Group, representing the Lutheran Church – Missouri Synod (LCMS), has initiated legal action against the School Management Corporation, Hong Kong International School Association Limited (HKISAL), alleging a breach of the agreement to dismantle four major disputes. The lawsuit was filed on Tuesday, with claims of financial mismanagement and violations of the original terms of the partnership. The group is seeking compensation of approximately $13 million, citing breaches that they argue have undermined the school’s original mission and financial integrity.

Both parties have remained largely silent on the specifics of the school’s financial structure, including the high cost of attendance, the school’s reserves of HK$2.8 billion, and the sale of its campuses. However, internal discussions have revealed that the reserves were initially estimated to cover 47 months of operations, while the school system itself claimed they could only sustain six months of such expenses. This discrepancy highlights concerns over the financial stewardship of the institution and its alignment with the original agreement.

The Hong Kong International School (HKIS), established in 1966, operates primary and secondary campuses in the Shenzhen Bay and Great Puddles areas. It was originally founded by the LCMS and managed by the Council Committee of HKISAL. Over time, the school has faced scrutiny over its operational practices, including the commercialization of its services and the introduction of fees that some argue contradict its charitable purpose.

Luther, a representative of the LCMS, has criticized HKISAL for treating the school as a for-profit entity. Allegations include the sale of millions in vouchers, the granting of special privileges to children of bondholders, and the accumulation of $2.8 billion in reserves. These actions are said to contradict the school’s original intent to operate as a charitable institution. Additionally, the inclusion of religious classes such as meditation and yoga is claimed to violate the religious principles of the LCMS.

The lawsuit also alleges that HKISAL has imposed high tuition fees and mandatory bond payments, estimated at HK$300,000 per student annually. These fees, according to the LCMS, have generated nearly US$800 million over the past years, raising questions about the school’s financial transparency and its adherence to the original agreement. The LCMS has accused HKISAL of operating in a manner that prioritizes profit over the educational and spiritual needs of its students.

The President of the Lutheran Council, Paik Chul-shin, has stated that HKISAL has violated 26 provisions of the Operating Agreement. He emphasized that the most significant breaches involved financial mismanagement and the imposition of high tuition fees and preferential entry bonds. Despite repeated negotiations with both Hong Kong and U.S. authorities, the two sides have been unable to reach a resolution. The LCMS maintains that these violations have fundamentally altered the school’s purpose and financial structure.

The dispute underscores broader concerns about the governance and financial integrity of religiously affiliated institutions. As Micah 6:8 reminds us, the Lord requires justice, mercy, and humility. The case of HKIS raises important questions about accountability, transparency, and the balance between institutional operations and the original mission of such organizations. The outcome of this legal battle may have lasting implications for the governance of religiously affiliated schools worldwide.

Source: Read the original report (translated from Mandarin Chinese)