I thank you sincerely for giving me the chance to address you today.

The Report

You will by now all have read the Panel's Report. I have no doubt that the Investigating Panel has tried its best to ascertain the facts of the case under serious time pressure. However, let me state in no uncertain terms that I have grave concerns about its findings and conclusions. I cannot and will not agree that the Report is correct.

I am giving active consideration to taking further legal proceedings in relation to the Report on the grounds that it is fundamentally flawed. I am receiving advice from leading Counsel and from Herbert Smith in this regard. I would ask each of you to please read the letter from Herbert Smith to the University's solicitors, Johnson Stokes & Master, which sets out in detail the flaws in the Report.

As someone who has been closely involved with the University, you will no doubt agree with me that it is a very unique and complex institution. It has its own culture and its own special way of working.

From the outside looking in, it is perhaps difficult for someone to fully appreciate this culture and how the University operates. As Council members of the University, we are in a much better position to consider the validity of the findings in the Report. Each of us has personally been entrusted with the responsibility of overseeing the University as Council members. We must, therefore, formulate our own views on the Incident.

Academic Freedom

Academic freedom is an indisputable and non-negotiable part of university life. The University of Hong Kong embraces a truly pluralistic approach in its academic endeavours. Diversity of views is encouraged and promoted. Our staff and students are free to hold whatever view they have on any subject, whether in relation to their academic work or to events in the outside world.

Upon short notice, two-thirds of the Chair Professors have written to you, stating that academic freedom has never been a problem in the University. Furthermore, they have also stated that, having followed the case, there was no evidence of any interference with academic freedom. This is in direct contradiction to the Panel's conclusion that I have interfered with Dr Chung's work for political reasons.

The Chair Professors are the very people who know how the University operates and who are intimately familiar with academic freedom, both in principle and in practice.

Let me state once again, in no uncertain terms, that I have never interfered with academic freedom. My conscience is clear and I will not be forced to apologize for something that I have not done.

Alleged Mismanagement

I also feel that I must respond to my alleged mismanagement of the Incident since the 7th of July.

I left Hong Kong on the 19th of June to go on a business trip. I then took my summer vacation in England and Wales. It is regrettable that I was not informed by the University of this Incident when it first broke on 7th July.

I only learned of the Incident when I received a telephone call from the University on the 14th of July. Even then I did not receive any documents, such as a copy of the articles containing Dr Chung's allegations. It was extremely difficult to assess the seriousness of a situation based on a few phone calls, without access to any further information. I decided on the 15th of July to cut short my vacation and return to Hong Kong, immediately after an alumni function on the 16th which was too late to cancel.

Upon my return to Hong Kong, it was not possible for me to take charge of the Incident, as in addition to being ill, I had been advised to take leave until the investigation was completed. Rather reluctantly, I complied with this advice. During that period, I have basically had no contact with the staff of the University, nor was I given the chance to help manage the Incident.

My absence from Hong Kong when this incident arose and the fact that I had to remain on leave afterwards was unfortunate. I really do wish that I could have been here or permitted to assist so as to avert this crisis.

Going Forward

There have been valuable lessons learned from the Incident for the entire University.

Communications have always been difficult in a university environment where there is a high degree of individual freedom and where there is a lack of a formal structure of organization. Nevertheless, I submit that it is critical for the University to establish better communications channels in the future, both internally and with the community.

I am firmly of the belief that we must change with the times or we will be left behind. Since becoming the Vice-Chancellor, I have set a clear direction for the future. It builds on our tradition of excellence, and at the same time, fully recognizes the changes in the world outside and the expectations of our community.

Last October, I outlined for you the reforms that had been carried out over the past few years and the great strides the University has made. Carrying out reforms is not an easy task, especially in a long-established institution like Hong Kong University. However, the reforms were initiated with the sole conviction that they were in the best interest of the University. It must be continued into the future.

We must do a much better job of communicating within our University and with the community. Going forward, I believe that more time and effort need to be devoted to ensuring that our staff fully understand and support these reforms. We must harness the goodwill and the active participation of everyone.

Conclusion

To go forward and achieve its vision, the University must mend the wounds and re-establish a stable environment. We must work together to see through the new initiatives and programs, to make sure that they come to fruition for the benefit of the University and the community.

I realise that, for some of you, the appropriateness of my staying on as Vice Chancellor has become an issue. In the aftermath of this Incident, I have no doubt that the task ahead is indeed daunting. However, this must be done for the greater good of the University and the community.

I am an alumnus of the University and its Vice-Chancellor. I have always considered it a very special honour to serve this great institution. I have sought nothing for myself, but have placed myself in its service. This Incident has therefore been a source of great sadness.

After much consideration, I have come to the conclusion that I should stay and continue to serve, in the best interest of the University. With your support and help, I believe we can put this Incident behind us, learn our lessons and move on to scale greater heights

I seek the Council's guidance in this matter and I will give serious consideration to your views.

Finally, let me thank you all sincerely for giving me this opportunity to address you, and more importantly, share with you the special thoughts I always keep in my heart for this great University.

1st September 2000

Also enclosed with this letter is a letter from the Chair in Chinese Music and Associate Dean of Arts dated 23rd August 2000 to the same effect [enclosure 3].

Summary of immediate, serious concerns about the contents of the Report

We would reiterate that the Vice-Chancellor has had very little opportunity to consider the contents of the report, which he only saw this morning for the first time. (We asked you earlier this week whether it might be possible to have more notice of the contents of the report before the Council meeting, but you advised us that the Chairman of the Council had decided that that would not be possible.) The Vice Chancellor has read the report and discussed it with our Martin Rogers. Warren Chan SC is in Europe at present. Our Martin Rogers has had the chance to relay a summary of the report to Warren Chan SC by telephone and to obtain very preliminary advice from Mr. Chan, but that is all. Clearly, in due course (in formal proceedings if so advised and if it proves necessary) these concerns expressed in this letter will be amplified significantly.

However, subject to the above qualification, the Vice-Chancellor and we wanted as a matter of courtesy and to assist the Council at its meeting today, to summarize our immediate concerns about the findings set out in the report.

As set out in Warren Chan SC's closing submissions, as far as the Vice-Chancellor is concerned, and particularly bearing in mind the appropriately high burden of proof that the Panel has purported to apply, on the evidence before the Panel it is simply impossible for any Panel acting reasonably to come to any material adverse conclusions about the Vice-Chancellor's role in this matter.

On the direct evidence before the Panel there is no basis to conclude that the Vice-Chancellor took any step to impose pressure on Dr. Robert Chung to stop or curtail his POP activities. The Panel has wrongly either ignored or given manifestly insufficient weight to, amongst other things:

• the absence of any direct evidence that the Vice-Chancellor gave instructions to Professor Wong to speak to Dr. Chung, or was aware at all, either before or after the event, that Professor Wong had a meeting with Dr. Chung in January 1999;
• the preponderance of evidence, in particular from SMT members, that the Vice-Chancellor was not at all concerned about or dwelled on his meeting with Andrew Lo;
• the fact that the documentary evidence is consistent with only legitimate concerns about the POP activities being raised by the Vice-Chancellor;
• the fact that, on any basis (i.e. applying for the sake of argument the Panel's findings), we are concerned here with the drawing of grave adverse inferences based on only two occasions during an 18 months' period on which the Professor Wong and the Vice-Chancellor allegedly put pressure on Dr. Chung.

Indeed, very importantly, in the report the Panel itself found that there was no evidence from which it could make findings. Most notably, we refer to paragraphs 41 and 100 of the report:

Para. 41: "We are left then without any evidence as to when it was that the Vice-Chancellor told Professor S.L. Wong of the visit and as to what was said on that occasion." (our emphasis added); and

Para. 100: "We cannot make any finding as to what was said in the conversation in which the matter was discussed between [Professor Wong] and the Vice-Chancellor." (our emphasis added). Notwithstanding these explicit conclusions on the facts, and the explicit statement that the mere rejection of evidence will not entitle the Panel to make an opposite, positive finding of fact, the Panel in the report conclude that Professor Wong spoke to Dr. Chung on the two isolated incidents in question at the behest of the Vice-Chancellor. We do not see how any Panel acting reasonably could have made this leap.

The report appears to contain a significant number of other lapses.

We would refer the Council to Warren Chan's closing submissions for a more detailed summary of the absence of any real evidence in the case to support Dr. Chung's complaints.

How then, have serious adverse findings been made against the Vice-Chancellor in the face of the evidence? Almost entirely by drawing inferences based on findings that Dr. Chung's evidence is to be believed over Professor Wong's evidence, and that Andrew Lo's was poor and unconvincing (untruthful) as a witness.

As to the latter, the Panel concludes, from finding Andrew Lo to be an unconvincing witness as to discussion on 6th January 1999 (and also the Vice-Chancellor), that it did not have a full account of what was said during that meeting: see paragraphs 36 and 99 of the report. Yet, notwithstanding this and the further evidence confirming what had been said at the meeting, in the form of evidence of the Vice-Chancellorˇs reporting of the meeting to the SMT, the Panel appears to have leapt to adverse conclusions about what else was said.

Probably more importantly, we are very concerned that the Panel has not dealt fairly with the evidence and credibility of Dr. Chung. The Panel concludes in its report that:

• Dr. Chung was a political commentator. (In other words, his repeated denial of this when giving evidence, a denial which flew in the face of the facts, was clearly implausible and not believed by the Panel);
• Dr. Chung is a publicity-seeker - see paragraph 98 (he "cherishes K publicity");
• Dr. Chung is obsessive - see paragraph 98 ("his obsession"); and
• Dr. Chung was over-anxious - see paragraph 98 ("there is force in K criticism that Dr. Chung was unduly anxious") Although these findings are (correctly) made by the Panel, in fact it gives little or no real weight to them. Instead, it accepts Dr. Chung's evidence and rejects Professor Wong's evidence, even though its findings, as set out above, are precisely those matters which Professor Wong submitted were the matters which may well have led Dr. Chung to have a distorted recollection of the relevant events.

The importance of this failing in the report cannot be overstated. In the absence of any direct factual findings adverse to the Vice-Chancellor, the Panel has built its case against him by way of inferences built on inferences in order to rebut the direct evidence which is available. The primary inference is that, apparently on a high burden of proof, Dr. Chung's evidence is to be believed over Professor Wong's. From that inferential conclusion, inferences are then drawn as to what, absent any direct evidence to support the findings, the Vice-Chancellor must have said to Professor Wong (again, apparently on a high burden of proof).

Indeed, it is very important to note that at least one member of the Panel had doubts as to the drawing of these inferences. Tellingly, the Panel's decision is not a unanimous one. One member was not prepared to find to the requisite standard of proof that the meeting in November 1999 was at the behest of the Vice-Chancellor. This is important. Not least because it seems to us, as a matter of general impression at least at this early stage, that a good number of the adverse inferences drawn in respect of events in January 1999 are based on adverse findings as to the November 1999 meeting. (In this respect we are concerned at the fact that, and the procedural basis on which, the Panel thought it fit to disclose in its report that the member concerned was nevertheless satisfied as to this fact, but on the basis of a significantly lower standard of proof.)

We would query whether, notwithstanding what it has purported to do, the Panel has in reality applied the appropriate standard of proof. The report has a significant number of references to lower standards of proof. Two examples may suffice for these purposes:

• "it certainly can be suggested that support is given to Dr. Chung's version ..." (our emphasis added) (para. 86); and
• "What of the documentary evidence? It is true that it is not conclusive, but it gives some support to ..." (para. 104).

The apparent undue willingness of the Panel to make adverse inferences appears to be supported by the way in which the Panel has characterised the evidence before it and disregarded evidence which is not consistent with their findings. Frankly, the Vice-Chancellor has had insufficient time to consider this in detail. At least two instances have been identified by us this morning, which gives rise to this concern. These relate to Dr. Chung's evidence:

• in paragraph 50, the report records Dr. Chung as "not disagree[ing]" with the Vice-Chancellor's and Professor Wong's desire to see in-depth research being done. In his evidence, in fact Dr. Chung positively agreed to this, not merely not disagreed. Although this is arguably a question of emphasis, we cannot help, given all our other concerns, see this as of some significance.
• in paragraph 51, the Panel confirms that Dr. Chung conceded that there could have been a misunderstanding between himself and Professor Wong. On the face of it, this may appear to be a significant concession. However, the report in the dismisses it entirely by saying that "finally he stated that he adhered to what he had said and was not going to withdraw any of it". It does not feature again in the report.

In the very short time available to the Vice-Chancellor he has naturally reflected on how the Panel may have gone seemingly so badly astray in its treatment of the evidence and its making of findings. It seems to the Vice-Chancellor, and on this he would welcome discussion by the Council, that the Panel may have been very significantly hindered by the absence of representation from the University, specifically the Council. In a number of very significant respects, the Panel appears to have drawn adverse conclusions or failed to give due weight to evidence, as a result of lack of knowledge of the working of the University. This might have been avoided has the Panel been properly constituted as a committee of the Council rather than as a purported agent. Some examples are:

• a failure to give weight to the full range of responsibilities of the Vice-Chancellor and therefore to give credence to why the Andrew Lo meeting figured relatively low in his mind and priorities at the relevant time, including why he did not directly follow up on the query raised as to a potential conflict of interest on Dr. Chung's part;
• why, in the context of a long-established mentoring relationship, contrary to the Panel's adverse inferences, it is reasonable to conclude that there was nothing improper or suspicious in Professor Wong talking to Dr. Chung in the manner that he did. We refer to the extreme conclusions ("covert attempts", "secretive air about both meetings" and "failure to have open discussion through recognised channels") reached by the Panel in paragraph 105 of the report in particular, and also some of the observations made by the Chairman of the Panel in particular during the hearing;
• ironically, in reaching the above findings, the Panel appears to commend the only direct communication between the Vice-Chancellor and Dr. Chung in this saga, namely the communications concerning the Mirror Magazine article (see paragraph 105);
• a general failure to recognise the nature of academic informal debate;
• a failure to give reasonable weight to the legitimate nature of concerns about the POP programme (views which the Panel finds were honestly held by the Vice-Chancellor - see paragraph 17);
• a failure to recognize that, again within the context of the mentor relationship and with his likely knowledge of the political ambitions and need for recognition of Dr. Chung, Professor Wong might have perfectly reasonably found it difficult to raise the legitimate concerns that he did with Dr. Chung. See to the contrary the conclusions which were in fact reached by the Panel in paragraph 104 of the report;
• the lack of understanding of the concept of quality assurance within the University (which the Panel did not appear to pursue during the hearing itself) and the unnecessary questioning of why the Vice-Chancellor did not elaborate to Andrew Lo on this during their short meeting on 6th January 1999 (see paragraph 24 of the report).

The potential unconstitutionality of the Panel is, if it is a valid point (which is still being considered) not merely a technical defect. In the light of the contents of the report, the make-up of the Panel appears to have contributed to the inappropriate findings of the report. We and the Vice-Chancellor hope that the contents of this letter are of assistance to the Council. The Vice-Chancellor maintains his position that he has done nothing to justify criticism of himself. His regret is that he was not in Hong Kong when this matter broke, and that on his return he was prevented from being involved in managing the crisis, so as best to protect the interests of the University. He stands by his performance as Vice-Chancellor, and that of the Senior Management Team of the University. He recognises that the situation is not an easy one to address, but urges the Council not to shirk from addressing it properly and to be fearless in doing so. Short-term solutions should not be adopted simply in the hope that this matter will disappear.

It is important that the Council considers this matter carefully and does not simply adopt the contents of the report without full, careful and independent consideration of its own. It is for this reason, that he has taken the perhaps unusual step of setting out in full his concerns to for the Council to consider. The Vice-Chancellor wishes to work with the Council in a positive spirit of cooperation in undertaking this task, but must formally reserve his rights, on legal advice from us and counsel.

Yours faithfully,

Herbert Smith