Hong Kong international schools’ debentures and capital levies: how do they work?

Name: Hong Kong International School threatened with eviction by church co-founder
Uploaded: 2025-09-13T01:03:55.000Z
Duration: 1 min 34 s
Description: Hong Kong International School threatened with eviction by church co-founder

Court case prompts fresh scrutiny of how Hong Kong’s international schools raise funds with debentures and capital levies

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A view of Hong Kong International School. Photo: Sam Tsang

Enoch Yiu

Published: 9:03am, 13 Sep 2025Updated: 3:40pm, 13 Sep 2025

A court case has thrust the financial practices of Hong Kong’s international schools into the spotlight, prompting fresh scrutiny of how they raise funds with debentures and capital levies.

On Wednesday, the US-based Lutheran Church-Missouri Synod (LCMS), which co-founded the Hong Kong International School (HKIS), said it would sue the school’s operator for allegedly breaching an operational agreement, accusing the institution of serving only the “rich and privileged few” and amassing excessive financial reserves that amounted to HK$2.8 billion (US$359 million).

The school’s operator, Hong Kong International School Association Limited (HKISAL), on Thursday rejected the allegations, claiming they were “false or irrelevant”, adding that the school was committed to supporting the international business community.

The legal challenge questioned the adequacy of safeguards for parents making significant upfront investments to buy debentures as part of the cost of their children’s education. Depending on the terms, parents can receive refunds when their children leave the school, but some are non-refundable, according to a lawyer.

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Hong Kong International School threatened with eviction by church co-founder

“The lawsuit implicitly fuels calls for regulatory evolution, as the LCMS’s proposed alternative school without debentures spotlights how these fees can clash with accessibility goals,” said Tom Chan Pak-lam, a lawyer and veteran stockbroker.

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Hong Kong international schools’ debentures and capital levies: how do they work?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Court case prompts fresh scrutiny of how Hong Kong’s international schools raise funds with debentures and capital levies

Court case prompts fresh scrutiny of how Hong Kong’s international schools raise funds with debentures and capital levies