Head caught up in school trademark ownership row

CREDIT: This story was first seen in the Guardian
Aydin Önaç and school bursar set up firm to own trademarks, with governors unaware they would own the company, the Guardian reports.
The headteacher and bursar of the grammar school at the centre of a row about kicking out sixth-formers set up a private company to own the school’s trademarks without notifying the school’s governors they would be its owners.
Aydin Önaç and Alan Wooley set up the business earlier this year, filed three applications to hold trademarks related to St Olave’s school and were registered as its sole shareholders.
When the Guardian asked the school governors whether they approved of the arrangement, they confirmed they had approved a plan to create a separate entity to hold trademarks, but also that they were unaware of the company’s ownership arrangement.
A spokesperson on behalf of the governors said: “These companies were set up with the knowledge of the board of governors. However, we have become aware that the structure of the companies does not comply with standard good practice and we will be looking to rectify this as a matter of urgency.”
Önaç has been head of St Olave’s since 2010. Under his leadership the school has been accused of focusing ruthlessly on achieving the highest GCSE and A-level grades. Last week, it was forced to abandon a longstanding policy of excluding sixth-formers halfway through their A-levels if they failed to achieve at least three Bs at AS-level after the Guardian highlighted the practice, which the Department for Education said was unlawful.
An increasing number of schools like St Olave’s are exploring creating trading subsidiaries in an effort to offset the impact of government cuts. Publicly funded schools are ordinarily prevented from engaging in commercial activity – but to retain a measure of control a school would maintain some links to a trading company by owning it through a trust or appointing independent directors to the company’s board.
An education lawyer, who asked not be named so as not to jeopardise professional relationships, said appropriate ownership and control structures were essential for any trading company linked to a school.
“It’s fair to say you would expect that if a school had a trading subsidiary, unless there’s a tax or VAT reason not to, for it to be controlled or owned by the school [or a related trust],” she said.
“It’s a control issue: who owns it, ultimately where is the cash going to go if it makes a profit, and how can you ensure that cash is payable to the person who should benefit from it?”
The trademarks to be held by St Olave’s Management Services Limited, including the words “St Olave’s” and the school’s crest and seal, could have applied to a range of products including digital educational materials, manuals and books, educational services and clothing such as uniforms. However, because the company was set up in July it has not had time to begin trading.
Önaç did not respond to a request for comment. However, Wooley said in an email that the company had been formed to protect the school’s brand and potentially raise additional revenue.
“The school has suffered a cut in real terms in its income from government of more than 20% in the last seven years. At the same time it has faced unfunded increase in staff costs in the form of salaries, national insurance and pension contributions,” he said.
“As a consequence amongst our personal objectives the headmaster and I are charged by the governing body with seeking additional sources of income for the school.”
Wooley said that the school’s legal status precluded it from conducting any trading or registering its own trademarks. He stressed that there was no intention whatsoever for himself or Önaç to personally profit from the venture.
“There is absolutely no automatic benefit to directors from a company as you have supposed – a limited company can choose to direct any profit wherever it wishes and there is no reason or evidence whatsoever for you to suggest or conclude that the company is not going to return any income or profit to the school,” he said.
Maintained schools, as opposed to academies or academy trusts, are able to set up trading subsidiaries as a ”school company” as long as they seek permission from the local authority. Bromley council, the local authority where the school is situated, said: “This a business matter for the school.”
In his first public remarks about the school’s sixth-form policy, Önaç wrote a start of term letter to the parents of new and returning students “in view of the recent media attention” in which he assured them that “the welfare and well-being of our students, and the quality of their teaching, remain priorities for the school.”
“Of particular relevance to older students is that the governors and I decided last week to allow all students the opportunity to continue with their A-level programmes in Year 14 should they wish to and to remove the progression requirements from Year 12 from the sixth form Rules and regulations policy,” he wrote.
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