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EDB may have to write off $17.3m given to UNSW
THE Economic Development Board (EDB) may have to write off the
$17.3 million it awarded in grants to the University of New South
Wales (UNSW) Asia, as the university may declare itself
insolvent.
In a statement on Friday, the parent university in Sydney said UNSW
Asia, the company behind the now-defunct Singapore campus, was
faced with 'significant claims' from creditors.
It said if the claims were upheld, UNSW Asia will not have enough
funds to pay up, and may have to consider declaring itself
insolvent.
Although it did not name the creditor with the 'significant claim',
sources close to the university confirmed that it was referring to
the EDB, which has asked the university to repay $17.3 million it
had given the university in grants last year.
The EDB also gave the university another $15 million as part of the
building loan for UNSW's campus in Changi. But that amount is safe
as it is backed by a bank guarantee.
In its statement on Friday, the university also revealed a payment
plan for the 47 academic staff affected by the sudden closure of
the campus.
In the plan, which was also outlined in an e-mail to academic
staff, UNSW agreed to honour its initial offer to pay 20 weeks'
salary as compensation. This would be done in two separate
payments.
The university will pay staff an initial $7,500. But they will
receive the rest of the compensation from UNSW Sydney only after
they sign a deed of release. This would mean they could not make
any further claims against the university.
The university explained that it had to structure the payment in
two parts because Singapore insolvency laws only allow UNSW Asia to
pay a maximum of $7,500.