Both Robert and Eva might have breached Section 9 of the Prevention of Bribery Ordinance for offering and accepting bribes.  It was unlikely that Eva’s employer would permit her to accept an advantage (i.e. $10,000) for disclosing patients’ information to a third party. In addition, Eva might have committed an offence of accessing the computer with criminal or dishonest intent, contrary to Section 161 of the Crimes Ordinance.

Since Dr. K and his partners failed to adopt security measures to protect patients’ information, they might have liabilities under the Personal Data (Privacy) Ordinance which requires appropriate security measures to protect clients’ personal data.

Section 1.1.3, 1.1.4 and 1.1.5 of the Code of Professional Conduct issued by the Medical Council of Hong Kong (Oct 2022) also requires doctors to take every step to strengthen the control system to protect patients’ information from misuse.

The sales representatives committed an offence under Section 9(3) of the Prevention of Bribery Ordinance (POBO) offence if they had submitted false documents i.e. claims of commissions or entertainment expenses to deceive their principal i.e. the company.   

Furthermore, the offering of illegal commissions to agents of business clients with a view to obtaining or securing business might constitute a bribery offence under the POBO.   Agents of clients should obtain permission from their principals, i.e. their employers, for accepting advantages or commissions in relation to their work.  As approval should be given by the principal of the acceptor not the offeror, the Managing Director’s approval on the expense payments would not be considered the principal’s approval in this case.  

Although the clients were located in the Mainland, if any part of the act of bribery (including offering, soliciting or accepting a bribe) takes place in Hong Kong, the case may still be pursued by the ICAC under the POBO.  In any case, customary trade practice could not be a defence in any proceeding for a bribery offence under the POBO.  

Andrew should bring the issues to the attention of the company management and avoid involve in any acts that might call his integrity and professionalism into question. He should take into account his own views on ethics and legality and offer advice to the management if there were better alternatives.  

If corruption involving senior management was suspected, and all his attempts to find legal and ethical alternatives were rejected, then Andrew should consider resigning from the company and refuse to carry out any illegal transactions. He should consider reporting corruption to the ICAC and other crimes to the police.

The offering of “reward” by Billy as an inducement for Jimmy to misrepresent the financial position of B&B Co. Ltd. was a breach of Section 9 of the Prevention of Bribery Ordinance (POBO).  Jimmy should refuse Billy’s offer and make it clear to Billy that while B&B Co. Ltd. was an important and valued client of his firm, no financial inducement or veiled threat would cause him to compromise his independence and professional integrity in connection with either the company's forthcoming audited financial statements or any other professional engagements carried out for B&B Co. Ltd.

Jimmy might consult a fellow partner at this stage in considering his alternative responses to this sensitive situation and in clarifying his own professional responsibilities in the circumstances, although remaining mindful at all times of the need to preserve client confidentiality.  In the event that Jimmy had no appropriate internal channel for such consultation, he might consider consulting the Hong Kong Institute of Certified Public Accountants.

As Billy’s close friend, Jimmy should explain to Billy that the use of “whatever device he could to improve the financial position of B&B Co. Ltd.” was inappropriate, and that he and his firm would endeavor to help the company overcome the current challenges by legitimate means.

If Billy was unwilling to change his position and insisted on carrying through his threats, Jimmy should point out that, having substantially completed the audit that they were engaged to perform, his firm would propose to issue a qualified report if B&B Co. Ltd.’s financial statements did not give a true and fair view. 

Having fulfilled their statutory responsibility by reporting to the shareholders, Jimmy should explain that his firm would tender their resignation.  Details of these circumstances would also be given to any proposed successor firm of auditors in etiquette correspondence.  In the event that B&B Co. Ltd. attempted to remove Jimmy's firm from office, Jimmy should explain that he would consider making similar representations to the shareholders as entitled under the Companies Ordinance.

Jimmy was suggested to report the attempted bribe to the ICAC to safeguard his own interests.  

Ben could consider the following major factors when handling Dale’s request:

Professional / Company code of conduct

The Hong Kong Institute of Chartered Public Accountants (HKICPA) requires a professional accountant to comply with relevant laws and regulations, and avoid any conduct that the professional accountant knows or should know might discredit the profession.  Also, a professional accountant needs to comply with the fundamental principles of integrity and objectivity as stipulated in the HKICPA’s Code of Ethics for Professional Accountants which requires an accountant to be straightforward and honest in all professional and business relationships and avoid any conflict of interest situations.   Meanwhile, Ben also needs to observe his company’s code of conduct governing the above behaviours.

Legal Requirements

Ben might violate the Section 9(1) of the Prevention of Bribery Ordinance (POBO) if he accepted the advantage (luxury clubhouse membership) offered by Dale for helping Dale to obtain the bank loan by manipulating ABC’s accounting records; whereas Dale might violate Section 9(2) of the POBO by offering bribes.

Uncompromising Self-values

Helping Dale to get a bank loan by manipulating ABC’s accounting records might undermine Ben’s self-values of honesty, integrity and responsibility to his accounting firm.

Sunshine Test

If Ben accepted Dale’s offer and helped him to get the bank loan, he would fail to disclose his decision and the situation openly and honestly without misgiving.

When facing the above situation, Ben should avoid involve in any acts that might call his integrity and professionalism into question. He must take into account his own views on ethics and legality and offer advice to Dale if there were better alternatives.  

Zero tolerance to attempted bribes

If Dale insisted on asking for Ben’s help to get the bank loan, Ben should decline the advantage offered by Dale and report the attempted bribe to his accounting firm and the ICAC as soon as possible.

It would be an offence of Section 9 of the Prevention of Bribery Ordinance (POBO) if Teddy, as an employee of the law firm, without the approval of his employer, accepted the advantage (equal share of the mortgage loans) offered by Barry for assisting Barry to deceive the bank by preparing fake conveyancing documents. Barry might also violate the POBO for offering bribes. 

Moreover, Barry might also violate Section 9(3) of POBO for using false documents to deceive his principal (the bank) and Section 123 of the Banking Ordinance.  Both Barry and Terry might be liable for fraud and conspiracy to defraud.

Under Section 9 of the Prevention of Bribery Ordinance (POBO), it would be an offence for any agent to accept advantage without the permission of his principal when conducting his principal’s affairs or business. Baldwin, as an employee of the law firm, might violate Section 9 of POBO, since he, without the approval of his employer, accepted the cash offered by Timothy and his wife for assisting them in the criminal case. On the other hand, Timothy and his wife might also violate POBO for offering bribes. 

Even though the outcome of the criminal case was beyond Baldwin’s abilities, according to Section 11 of POBO, the offeror (i.e. Timothy and his wife) and the acceptor (i.e. Baldwin) of bribe would still commit an offence irrespective of whether or not the purpose of the bribery has actually been carried out.

Kenneth, as an agent of his solicitor firm, might violate Section 9 of the Prevention of Bribery Ordinance (POBO) if he accepted the advantage (i.e. 5% of the contract value) offered by Joe for leaking internal information to Joe without the approval of his principal (i.e. the law firm). Meanwhile, Joe might also violate the POBO for offering bribes.

Kenneth might also violate the professional code of conduct for compromising or impairing his independence or integrity, as well as his duty to act in the best interests of his client.

By soliciting an advantage and leaking the quotation information to Mr Ho, Mr Lee might have committed an offence under Section 9 of the Prevention of Bribery Ordinance. Meanwhile, Mr Ho might also have committed an offence by offering bribes. The section (Section 9) states that:

• an agent (normally an employee) solicits or accepts an advantage without the permission of his principal (normally the employer) when conducting his principal’s affairs or business commits an offence; and

• the person who offers the advantage also commits an offence.

A company should establish a good quotation and tendering system to enable the selection of the best contractor for the job required.  A good quotation/tendering system should prevent tender and quotation information from leakage.  Quotations or tenders received should not be opened before the deadline to reduce the likelihood of information leakage.  Furthermore, the opening of the tenders and quotations should be carried out by at least two persons to prevent tampering with the prices submitted

Under Section 9(1) of the Prevention of Bribery Ordinance (POBO), it would be an offence if Peter (an employee), without the approval of his employer (the construction company), accepted advantage as a reward for awarding contract to Stanley. 

According to Section 2 of the POBO, advantage means any gift, loan, fee, reward or commission, employment, contract, service, favour, payment, release or discharge of loan or liability, etc.   Therefore, the deposit offered by Stanley for the car purchase can be regarded as advantage. 

Stanley might also violate Section 9(2) of the POBO for offering bribes.

In fact, Peter faced a conflict of interest situation when having a close relationship with Stanley, a subcontractor under his supervision at work.  Peter should exercise his professional judgement to keep a professional distance with Stanley in order to maintain his objectivities.  He should also observe and follow his company’s policy on handling conflict of interest and made declaration when appropriate.

Moreover, Peter might also violate the Rules of Conduct of Hong Kong Institute of Engineers if he failed to discharge his professional responsibilities with integrity, dignity, fairness and courtesy and subject to disciplinary sanction, e.g. suspension of professional qualification.

Case Analysis

The foreman offered an advantage (i.e. the gift cheque) to the works supervisor as a reward for the latter’s doing/forbearing to do any act in relation to his principal’s business (i.e. conniving at fabricated test samples).  As the works supervisor, being an agent, did not have the permission of his principal (i.e. the consultant) to accept the advantage, he contravened Section 9(1) of the Prevention of Bribery Ordinance (Cap.201) (POBO); while the foreman contravened Section 9(2) of POBO for offering the advantage under such circumstance.  Both the foreman and works supervisor were sentenced to imprisonment.   

Case in Perspective

Construction materials testing process is vulnerable to corruption and malpractices, in particular when there is a lack of proper and effective supervision in the selection, safekeeping and transportation of test samples.  However, in order to avoid contractual liabilities due to failure of compliance tests (e.g. deduction of contract payments), unscrupulous contractors and/or sub-contractors may manipulate the process to ensure that only compliant samples are selected for testing.  They may also cover up substandard materials or works through substitution of test samples or falsification of test reports, with the corrupt connivance of site supervisory staff and/or laboratory technicians.  The above malpractices not only render the parties concerned liable to prosecution, but also undermine the works quality and put the public safety at stake.

Therefore, project owners/clients should put in place adequate and effective safeguards to prevent corruption and malpractices in the material testing process in their construction projects, including, but not limited to, the following –

(a) Lay down clear procedures for the selection, safekeeping and transportation of test samples;

(b) Keep all selected samples in safe custody throughout the process until handing over to testing laboratories;

(c) Request laboratories to submit test reports and certificates directly to the project owners/clients or their consultants; and

(d) Where necessary, appoint independent laboratories to conduct parallel tests on materials.