One day at dinner time, an inspector of a government department was chatting with a former colleague who owned a consultancy company.  During the meeting, the inspector mentioned that he had been in financial difficulties recently. The owner of the consultancy company took the chance to lend a helping hand to the inspector by offering him a loan of substantial amount.  At the same time, the owner of the consultancy company requested the inspector to copy to him from the database of the departmental computer and saved them into his personal USB.  Those records concerned the business organizations that had failed to comply with the regulations enforced by his department.  In return for the help from his former colleague, the inspector obtained over 100 records and sent them to the owner of the consultancy company.  The owner of the consultancy company used the records as a sales lead, approaching those business organisations on the list and touting his consultancy services to them. Some of the business organisations received sales calls from the consultancy company almost as soon as they had received warning notices from the government. They suspected corruption and reported the matter to the ICAC.

Tim was the director of a Hong Kong company and was stationed in its Mainland factory. In the process of awarding a freight contract to a cross–boundary transportation company for goods to be transported to Hong Kong, he claimed he was the factory owner. Tim also falsely claimed that he needed to inflate the transportation cost to offset certain monthly miscellaneous expenses, which were not chargeable to the company's account. He instructed the transportation company operator to inflate the transportation fees on the monthly statement by HK$20,000. He then submitted the statement to his company for issuing of payment to the transportation company via the personal bank account of the factory accountant.   Tim had subsequently pocketed HK$180,000 through the bank account of the accountant for nine months.

The transportation company operator later discovered that Tim was only a paid director and not the actual factory owner.

Daphne, a purchasing officer in a watch manufacturing company, was responsible for recommending spare parts suppliers.  One day, a supplier, Simon, invited her for a lunch and made a business suggestion.  If Daphne recommended her company continuing to use Simon’s company as a supplier, Simon would mark up the quotation price by 4% from the next purchase order and they could equally split the profit by having 2% each.

Daphne was scandalized when hearing the suggestion.  Although Simon’s suggested mark-up price was still by far the lowest among the lot, the quality of his products was not as good as the others and only just met the company’s required standard.  On a second thought, she needed an extra income at the moment because she had just made the down-payment for her new flat.  After all, her company would still get a good bargain price.

Would Daphne commit an offence if she accepted Simon’s suggestion?  What factors does she need to consider when making a decision?

Mr Chow started a joint venture with three of his friends by setting up a chemical engineering company in Hong Kong and a chemical manufacturing factory in Guangdong. The four of them were all directors of the company, each holding 25% of the company shares.

As Mr Chow had substantial experience in operating factories in Chinese Mainland and had developed an extensive business network in Hong Kong and Chinese Mainland especially with Mainland suppliers and government officials, he offered to manage the Mainland factory as the paid General Manager in charge of the business there.

Mr Chow often boasted that the success of the Mainland factory was due to his networking clout. At the same time, he kept grumbling that he had to cover the enormous entertainment expenses with his own money. As the General Manager of the Mainland factory, Mr Chow was entrusted with key procurement decisions. When one of his Hong Kong suppliers learned that Mr Chow had recently bought a property in Chinese Mainland, he presented Mr Chow with an expensive audio- visual set-up, hoping that this gift would secure a contract for the supply of chemical raw materials.

This seemingly thoughtful present soon brought its reward in the form of a first order from Mr Chow. To secure future business, the supplier also offered 5% of the transaction amount as a rebate to Mr Chow at his request. Subsequently, the bribe money was deposited into Mr Chow’s bank account in Hong Kong.

Mr. Chung had established a toy manufacturing enterprise in the Mainland in partnership with his friends. Holding 10% of the shares, he was mainly responsible for supervising the manufacturing process. Since Chung had the authority to purchase materials for the company, he hinted to a Mainland supplier that he expected a rebate equivalent to 5% of the transaction amount as a reward for placing purchase orders. When the incident was exposed, the ICAC found that none of the shareholders in the enterprise had any knowledge of Chung’s acceptance of advantages. Besides, the company did not establish any clear policies on such acceptance of advantage either for its shareholders or staff. It was revealed that Chung had accepted a total of $50,000 over a period of eight months. Chung was sentenced to imprisonment for committing a bribery offence.

A mechanical engineering company in Hong Kong had operated a factory in the Mainland.  Its production manager Mr. Wong was deployed to oversee the Mainland mechanical production process. Mr. Wong had worked in the company for eight years and won the praise and trust from his boss. Since some of the production procedures were subcontracted to other local manufacturers, Mr. Wong was also responsible for sourcing suitable factories and awarding the production orders. As such, Mr. Wong got acquainted with many other manufacturers, and was frequently invited to social activities after work. Two of them suggested offering him a kickback as a reward for placing more production orders and they would inflate the price of the orders to compensate the extra cost, i.e. the kickback to Mr. Wong. Succumbing to the temptations of monetary rewards, Mr. Wong accepted RMB575,000 in bribes and then deposited the bribe money into his bank account in Hong Kong

Would Mr Wong breach any laws? How could companies avoid such malpractices from happening?

Cherry was a shipping clerk of Silky Way Ltd (SWL), a manufacturer of silk blouses for export to overseas buyers.  SWL had factories in Hong Kong, Guangzhou and Fuzhou.

Cherry was on good terms with Ray, proprietor of All-The-Way Forwarding Company which handled more than 80%of the shipment for SWL. All-The-Way had been making a handsome profit all along and Ray felt that this was partly due to Cherry who smoothed out whatever hiccups there might be in the freight arrangement.

When Christmas was near, he asked Cherry out for dinner.  Over dessert, Ray presented Cherry with an expensive watch.  Cherry was surprised but pleased.

Ray then went on to talk about his plans for the coming year.  He told Cherry he would like to set up a partnership with Cherry.  Noting that Cherry was in a puzzle, Ray elaborated.

“I always feel that the practice within the freight forwarding business of charging shipments of Chinese products a lower rate unreasonable.  I am going to equalise all charges for all shipments despite the fact that some goods are manufactured in China.  Your boss need not know the change or else he might turn to other forwarding companies. You just help me in handling the documents and you can get your share.  Nobody will raise any queries if you are in charge.  They all trust you.”

When Cherry was too surprised to answer, Ray went on, “It would not be difficult at all to make alterations in the computer database.  With the printouts, you can proceed to work on the invoices and accounts easily.”

Cherry did not know what to say.  It seemed to be a tempting proposal but to do so would be cheating SWL.  While she was hesitating, Ray prodded again.  “You deserve more than what you are getting now at SWL. With all the time and energy that you are putting in at the office, you are grossly underpaid.  You have to look after your own interest too.  SWL is already running a flourishing business.”

A sales manager of a web design company was moonlighting at a rival company.   To get more business in this competitive sector, the rival company offered the sales manager 6% commission on every contract he secured for them. During his day job at the web design company, the sales manager communicated with clients by e-mails, and it was easy for him to retrieve the clients’ business information that came with the e-mails he received.   He made use of the convenience provided by the system and diverted the e-mails to his secret employer.   He conducted six of these illicit transmissions within four months, and he also dishonestly secured contracts for the rival company by deceiving two clients into believing that his primary employer had an agency agreement with its rival.

Alexander was Manager of Planning in a real estate development firm and was responsible for recommending a contractor to conduct an environmental study.  He was considering Gamble, a small firm which had done outstanding work for the firm in the past.  Roy, a friend and representative of another larger environmental research firm, approached Alexander on the matter over a lunch appointment.  Alexander clearly stated that Gamble would possibly get the contract because of its satisfactory past performance, whereas Roy’s firm had a dozen other contracts to keep them busy.

Roy seemed disappointed but Alexander was glad when conversation turned to other topics.  Roy asked Alexander about the progress of his emigration plan.  In fact, Alexander’s wife, Zoe, had already gone to Canada with two sons to settle down first while Alexander would work a few more years in Hong Kong before joining them.  Roy mentioned casually that he had connections in Toronto and could help Alexander place his sons into the best local school though it might take some doing.  The school enjoyed a reputation for good results and easy access to the University of Toronto.  Alexander understood what Roy really meant.  He desperately wanted to make a head-start for his children and pave a smooth path for them.

Would Alexander commit any offence if he recommended Roy’s company in return for Roy’s help for his sons? What factors should Alexander consider when making the decision?

A relationship manager of a bank was responsible for managing portfolios of his corporate clients.  He noticed that one of his SME clients, Client A, had been lax checking his account statements.  Without Client A’s knowledge, the relationship manager took a series of malpractice in Client A’s account, for example, fraudulently applying for an increase of credit line, forging the client’s instruction to draw funds from the credit line and transferring the money from the client’s account to an account he controlled.  Later, Client A raised his doubts about the balance of the credit line, the relationship manager lied that it was caused by an error in the computer system. 

On another occasion, the relationship manager also forged a loan application under Client A’s name by using another client as guarantor and forged signatures.  He wanted to use the loan to settle the debit balance in Client A’s credit line to cover up his scam earlier.  During the credit approval and fund transfer process, the backend staff members had their doubts but only went to the relationship manager for clarifications.  The supervisor of the relationship manger also raised questions about the irregularities but he easily accepted the explanation given by his subordinate without follow-up. Later, with Client A’s persistent enquiries and complaints about the questionable credit balance to the bank supervisor, the scam by the relationship manager was finally exposed.