Mr Kwok, as an employee, might commit an offence under Section 9 of the Prevention of Bribery Ordinance (POBO) for, without the approval from his employer, soliciting and accepting an advantage (i.e. the ‘under-the-table’ commission offered by Raymond and Freddy) for recommending the listed company to buy their properties.  Meanwhile, Raymond and Freddy both might also violate Section 9 of POBO for offering bribes.

Individual ethics and corporate culture are among the key factors which shape a company’s corporate governance. Company directors and senior executives serving the company should serve as role models.

Mr Kwok, who held an influential position at the company’s property investment, should have used the power bestowed on him by the listed company to protect its interests.  However, Mr Kwok abused his company’s trust for personal gain and violated the law instead.  

It is important for the company to work on an ethical culture at the corporate level through practicing ethical leadership, giving clear guidance on ethical standard expected of staff, managing integrity training and putting in place a comprehensive internal control system which helps company prevent and detect crime or malpractices as early as possible.

To protect the interests of investors, the listed company prohibited their agents or employees from abusing their official positions for personal gain. Mr Chan and Jenny were commissioned by the listed company to sell the property. They had to comply with the listed company’s policy on acceptance of advantages and were not allowed to solicit or accept any work-related advantage. Under the Section 9 of the Prevention of Bribery Ordinance (POBO), it is an offence for any agent, without the approval of his principal, to solicit or accept an advantage as a reward for or an inducement to perform an act in relation to his principal’s affairs or business. The offeror of the bribe shall also be guilty of the offence. Mr Chan and Jenny might commit an offence under Section 9 of POBO for accepting bribe. This went against the spirit of the tender system and also prejudiced the buyer’s interests.

By attempting to secure business through corrupt means, Sidney’s action went against the spirit of fair competition and damaged the reputation of estate agency trade. He might also commit an offence under Section 9 of POBO for offering bribe.

Furthermore, they all might have breached the Code of Ethics of the Estate Agents Authority which states that estate agents and salespersons shall refrain from activities during their practice which may infringe the law.

It is evident that Howard had received an unsatisfactory answer from the Managing Director.  Assuming his findings were accurate, he should present a report to the other directors of the company, setting out the details of his findings of the wrongdoings of Mr Szeto, the Purchasing Manager.

Mr Szeto might have committed offences under Section 9(3) of the Prevention of Bribery Ordnance (POBO) for using false procurement documents to deceive the company and claiming private expenses through company’s accounts. He might have also breached Section 9 of the POBO for accepting secret commissions from suppliers without the approval from the company. 

If the board did not take appropriate action to follow up on the case, Howard should consider reporting the matter to the appropriate authorities after seeking legal advice.  While maintaining confidentiality of company matters was an important consideration, Howard had to weigh this consideration against the public interest in disclosing such matters to the appropriate authorities.

Howard might consider resigning from the company in the worst case scenario that he no longer had confidence in the integrity of those charged with governance of the company.

The following factors should be taken into consideration when identifying viable alternatives and choosing the best course of action:

1. Any violation to his professional, industry specific or company code of conduct?
2. Is it against the Law?
3. Does it correspond with his self-values such as honesty, compassion and responsibility?
4. Can he disclose his decision to others openly and honestly without misgivings?

Dicken could refer to the ETHICS PLUS ethical decision making model for solving his dilemma.

As far as professional conduct is concerned, Dicken, as a professional accountant, should observe the fundamental principles of integrity, confidentiality and professional behavior when carrying out his duties as a professional accountant. He might have breached the Code of Ethics for Professional Accountants for using confidential information for personal gain or for the financial gain of others. 

For legal compliance, Dicken might breach the Securities and Futures Ordinance if he, as a senior management of the listed company, had intentionally, recklessly or negligently disclosed unpublished price-sensitive information to Lawrence for the latter to deal in the company’s shares.

Dicken was regarded as an insider under the law because he was a person who, being the financial controller of Good Men Investment Co. Ltd, had access to and knowledge of certain information relating to the company which the public did not have and would have an impact on the price of the company’s shares. 

Leonard could refer to the ETHICS PLUS ethical decision making model in solving his ethical dilemma at work. The following factors should be taken into consideration when identifying viable alternatives and choosing the best course of action:

1. Any violation to his professional, industry specific, or company code of conduct?
2. Is it against the Law?
3. Does it correspond with his self-values such as responsibility, fairness and honesty?
4. Can he disclose his decision to others openly and honestly without misgivings?

As far as professional conduct is concerned, Leonard should observe the fundamental principles of integrity, professional competence and professional behavior and comply with the Code of Ethics for Professional Accountants (HKICPA Code) when carrying out his duties as the accounting manager.  As the company policy stated very clearly that padding travel expenses was strictly prohibited, he should perform a guardian role and report any non-compliance to the management. He shall discuss with his immediate superior or a higher authority in the company, take appropriate steps to rectify or mitigate the consequences of the non-compliance, and decide whether it should be disclosed to the external auditor.

Moreover, it is an offence under Section 9(3) of the Prevention of Bribery Ordinance (POBO) for any employee to use false documents / receipts / account records with an intention to deceive the employer.  Customary behavior or ignorance of law is no defence. Department heads might have committed the above offence for using false expense vouchers and invoices to deceive the company. They might also have committed a criminal offence of deception contrary to Section 17 of the Theft Ordinance.

Professional accountants have a guardian role in safeguarding the governance of the company and protect the interests of different stakeholders. They should take remedial actions to help the company foster an ethical culture and enforce any related policies.

Dominic violates the *Codes of Conduct as well as the insider dealing provisions of the Securities and Futures Ordinance.  He commits an insider dealing offence because he has used non-public information, provided by an insider of Treasure Hunt, to purchase the company’s stocks for financial gain. Tony is regarded as an insider under the law because he is a person who, being the financial controller of Treasure Hunt, has access to confidential information relating to the company.

Tony and Dominic may also commit a corruption offence under Section 9 of the Prevention of Bribery Ordinance (POBO) because Tony accepts from Dominic a share of the profit from the insider dealing as a reward for leaking the confidential information  of  his  company  to  Dominic.    Tony  may  commit  an  offence  of accepting a bribe while Dominic may commit an offence of offering a bribe.

*Remarks: Codes of Conduct refer to the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission, the Code of Conduct for Corporate Finance Adviser and the Fund Manager Code of Conduct.

Martin violates the *Codes of Conduct by issuing a research report which is not based on thorough quantitative analysis.   The information given in the report may prove to be false as Martin has recklessly turned Johnny’s subjective optimism in obtaining the construction contract into a certainty.    Such carelessness may easily cause financial loss to investors.

*Remarks: Codes of Conduct refer to the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission, the Code of Conduct for Corporate Finance Adviser and the Fund Manager Code of Conduct.

Jackson breaks the *Codes of Conduct by concealing his personal interest in Good Industrial and continuing to participate in the takeover project. It appears that his advice to Frontline Group is not entirely objective as his interest in Good Industrial may affect his judgement.  To comply with the standard, Jackson should disclose the situation to his company and let his employer decide whether he should withdraw from the project.

*Remarks: Codes of Conduct refer to the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission, the Code of Conduct for Corporate Finance Adviser and the Fund Manager Code of Conduct.

On this issue, Eddie should refrain from influencing Jacob to subscribe for the shares of Small World Corporation or, alternatively, disclose to Jacob’s clients the material interest of the company in this transaction.  However, Eddie errs by aiming only to evade the final responsibility of his company in buying the portion of stocks which cannot be absorbed by the market.  He has thus violated the *Codes of Conduct.   On the other hand, Jacob should not act in accordance with Eddie’s instruction unless the subscription is in line with the investment objectives of his clients.  He has breached the Fund Manager Code of Conduct in not performing his fiduciary duty.

*Remarks: Codes of Conduct refer to the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission, the Code of Conduct for Corporate Finance Adviser and the Fund Manager Code of Conduct.

Benny occupies a position which has access to the sensitive information on the merger plan for Interlock and Happy Diet.   His subsequent action in abusing the information to deal in their stocks for personal gain has not only violated the

*Codes of Conduct but also the insider dealing provisions of the Securities and Futures Ordinance.

*Remarks: Codes of Conduct refer to the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission, the Code of Conduct for Corporate Finance Adviser and the Fund Manager Code of Conduct.