Harbour Fest Reference

You, Mr M J T Rowse, Director-General of Investment Promotion, whilst serving as the Secretary to the Economic Relaunch Working Group (ERWG), did misconduct yourself, in that

1. despite the ERWG’s instructions of 2 July 2003 specifying that its agreement to support the “Hong Kong International Autumn Festival” (subsequently renamed as “Hong Kong Harbour Fest 2003”) (the Event)was subject to Invest Hong Kong’s scrutiny of and satisfaction with the detailed budget, you failed to ensure that the budget proposed by the American Chamber of Commerce (AmCham) for the Event was critically examined by Invest Hong Kong and that the ERWG was fully and adequately advised on the proposed budget, when the funding application of the Event was submitted to the ERWG for approval on 12 July 2003;
2. in your role as Controlling Officer for the economic relaunch fund of $100 million allocated to the Event, you failed to ensure that an effective mechanism was in place to enable the Government to monitor the organization of the Event properly, and to ensure that the Government’s interest in the use of the public funds allocated to the Event was adequately protected, and in particular, when three Memoranda of Understanding with AmCham were signed on behalf of the Government, you failed –
1. to ensure that the three Memoranda contained provision
1. requiring the Government to be consulted and its approval sought on any major changes to the programme and the budget of the Event;
2. requiring periodic reports to be made to the Government on the development and progress of the Event;
3. entitling the Government to have access to all accounts, contracts and records of the Event; and
4. for the refund of the advance payment if no agreement was reached and the Event was not held; and
2. to ascertain –
1. whether AmCham had the legal capacity to enter into the Memoranda;
2. whether AmCham was in a financial position to meet its obligations under the Memoranda; and
3. (iii) whether there was an urgent need for each of the advance payments to be made;
3. in your role as Controlling Officer for the economic relaunch fund of $100 million allocated to the Event, you failed to ensure that the Government’s interests were adequately protected in the Sponsorship Agreement with AmCham regarding the Event signed by you on 10 October 2003, and in particular, before signing the Agreement, you failed –
1. to ensure that the three Memoranda contained provision
1. for refund of the payments already advanced if the Event was not held;
2. requiring AmCham to make periodic reports to the Government on the development and progress of the Event; and
3. requiring AmCham to consult the Government on the ticket pricing strategy; and
2. to ascertain –
1. whether AmCham had the legal capacity to enter into the Agreement and to perform its obligations under the Agreement through a Special Purpose Vehicle; and
2. whether Mr James Thompson was duly authorised to sign the Agreement on AmCham’s behalf;
4. despite the decision of the ERWG on 12 July 2003 as set out in Invest Hong Kong’s email of 14 July 2003 to AmCham specifying that sponsorship was approved on the understanding that there would be a critical review of the ticket pricing strategy for the Event with a view to making the Event as commercially viable as possible, you failed to ensure that such a critical review, covering matters including the distribution of free tickets and the possibility of concessionary tickets for senior citizens and students, was carried out thereby prejudicing the Government’s position; and
5. despite Invest Hong Kong’s email of 14 July 2003 to AmCham specifying that the ERWG’s approval was given on the understanding that a detailed budget and all statements of account in relation to the Event would be subject to scrutiny and approval by Invest Hong Kong, you failed to establish procedures or mechanisms whereby such scrutiny and approval could be undertaken by Invest Hong Kong prior to and during the course of the Event, as a result of which the Government’s interests in the proper monitoring of the Event were prejudiced.