Hong Kong’s exclusive American Club has backed down over its controversial policy change that required non-US members to pay as much as HK$1.5 million (US$190,100) to retain their memberships or leave.
Instead, it has offered them the option of retaining their debenture or transferring to other types of membership at no additional cost.
The club announced the turnaround on Tuesday after a board meeting the night before to address members’ concerns about the recent policy change, which was said to have upset and angered many non-American members.
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In a statement issued at 12.43pm, titled “Addressing misstatements and providing update on further policy change”, the club said it would offer a new initiative to the affected members that allowed them to “retain their debenture or transfer it into a suitable category of individual membership at no additional cost”.
“We have embraced our members’ candid and constructive feedback on the initiative and have made changes to reflect this feedback,” it said.
“Our intention with this update is, and has always been, to preserve and increase the number of voting and non-voting members, further enhancing the diversity of our community.”
The almost 100-year-old private club stressed it had strived to foster an inclusive environment that continued to welcome members from diverse backgrounds.
“It is important to clarify that our membership restructuring initiative, which affects both voting [American] and non-voting [non-American] debenture members, was driven by our aim to evolve our membership model in a fair and inclusive way,” it said.
The club had found itself embroiled in controversy after its president, Christopher Burgess, announced a new policy in a letter on May 31. The policy required non-American individual debenture holders to top up their membership by up to HK$1.5 million or leave the club, which has premises in Central and Tai Tam.
The letter said those members had to declare their intention by August 31. Those who failed to do so or pay the first instalment of the top-up amount would have their debenture redeemed at face value and their membership cancelled on September 1.
Burgess earlier explained the change stemmed from the club’s drive to improve its membership profile and maintain its non-profit tax status, which requires 50 per cent or more of the club’s operating revenue to come from voting American members.
He described the change as “a more thoughtful process which does not treat a membership as an asset but as a privilege and opportunity to join the club which has been built on the American values of culture, friendship and community”.
Despite Burgess’ explanation, the policy change might have reduced the club’s 500-strong group of non-American individual non-voting members.
The club had issued debentures of various values as a medium-term debt tool to fund major development projects from 1985 to 2007.
Non-Americans have had to pay between HK$1.6 million and HK$2 million for a debenture to obtain a membership.
According to debenture conditions seen by the Post, the principal sum would not be repayable on demand by the debenture holder but might be paid off by the club at any rate with more than a month’s notice given in writing.
The club would also be able to redeem any particular debenture within the notice period without redeeming the remainder.
The American Club, founded in 1925, currently has 2,909 members – 52 per cent American, 19 per cent Hongkongers and 10 per cent British.
The club posted a surplus of HK$1.4 million in the 2022-23 financial year with membership income from debenture transfer and renomination fees at HK$27.1 million.
Its financial reserves totalled HK$606 million at the end of June last year.
More from South China Morning Post:
- Hong Kong’s American Club to hold board meeting on Monday over ultimatum to non-US members
- Pushing out non-Americans at exclusive Hong Kong club smacks of discrimination, tycoon Allan Zeman says
- Hong Kong club for Americans angers non-US members with shock HK$1.5 million ultimatum
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