Board meeting of the American Club in Hong Kong on Monday due to ultimatum to non-US members

“Of course, we have also received a lot of feedback from our members… If there are any changes to the plan, our members will be informed on Tuesday.”

The club broke its silence after the controversial membership changes made headlines three days earlier.

In an abrupt change of course, club president Christopher Burgess announced in a letter to members on May 31 the new policy, which requires non-US private bondholders to increase their membership by up to HK$1.5 million or leave the club.

A non-U.S. member who asked not to be identified said many of those affected are very angry and unhappy. The person also expressed hope that the board would abandon the plan.

Another non-American member called the move a “rip-off.”

Members must submit their declaration of intent by August 31st. Anyone who fails to do so or pays the first installment of the top-up amount will have their bond repaid at face value and their membership will end on September 1st.

The club issued bonds of varying denominations as a medium-term debt instrument to finance major development projects from 1985 to 2007. Non-Americans must pay a membership fee of between HK$1.6 million and HK$2 million by purchasing a bond.

Burgess said the policy change was the result of the club’s efforts to improve its membership profile and maintain its nonprofit status, which requires at least 50 percent of the club’s operating revenue to come from voting American members.

This move could reduce the 500-member group of non-American individual members without voting rights.

But Burgess stressed in the letter that the new change is “a more thoughtful process that views membership not as an asset, but as a privilege and opportunity to join the club built on American values ​​of culture, friendship and community.”

Business magnate Allan Zeman, a corporate bondholder who was not affected by the decision, had previously said that the decision smacked of discrimination against the backdrop of geopolitical tensions between the West and China. He added that it did not send a good signal to the world and also angered many people.

He noted that given the exodus of American members, the club may want to reduce the number of non-U.S. members in order to continue to benefit from tax exemptions.

According to the terms of the bond available to the Post Office, the principal amount is not repayable at the request of the bondholder but may be repaid by the Club in any event upon giving at least one month’s written notice.

The Club may, by such notice, redeem a single Bond without redeeming the remaining balance.

Founded in 1925, the American Club’s mission statement states that its goal is to provide its members and their families with a premier place for social, recreational and business activities in a truly American atmosphere.

The membership was 2,909 – 52 percent American, 19 percent Hong Kong and 10 percent British.

The Club recorded a surplus of HK$1.4 million in the 2022-23 financial year, with membership income from debenture transfers and renomination fees amounting to HK$27.1 million.

Its financial reserves totalled HK$606 million at the end of June last year.