Leo is regarded as an agent of the hotel.  Without the hotel’s permission, he accepted a rebate from Louis for abusing his official capacity to disclose other bidders’ information to the latter.  Leo might breach Section 9 of the Prevention of Bribery Ordinance (POBO) while Louis might also commit the offence by offering a bribe.  Accepting bribes, whether directly or indirectly through a third party, is against the law.  If the purpose of offering the advantage is to induce the agent to do an act in relation to his principal’s business, both the offeror and the recipient would commit an offence under the POBO.  Bidders’ or clients’ information is valuable to the hotel and staff members should strictly follow the guidelines laid down by the hotel for protecting confidential information.

On the other hand, hampers and gifts are advantages.  According to Section 19 of the POBO, custom or trade practice cannot constitute a defence.  If these gifts were offered to Leo with a corrupt motive, both Leo and Louis might commit a bribery offence, even if they were offered during festive occasions. Even if no corruption was involved, Leo should follow the hotel’s code of conduct regarding the acceptance of advantages to avoid conflict of interest.  He should be particularly cautious of the sweetening process initiated by Louis’ offer of gifts.  Accepting frequent gifts and favours will put the recipient in an obligatory position to reciprocate, compromising one’s objectivity in carrying out official duties and potentially leading to corruption.

What Anson did was a breach of trust of his former employer and he may face lawsuits from them for infringing intellectual property rights and breaching the non-disclosure agreement signed.

Anson may contravene the Rules of Conduct of the Hong Kong Institution of Engineers (HKIE) if he is a member of the institution, which prohibit an engineer from making use of proprietary confidential information for personal gain.  When working with new clients or changing employment, an engineer has a moral obligation to honour confidential and proprietary information gained from his previous employment, particularly the specific business or technical information from clients or employers.

The Rules of Conduct of HKIE also require an engineer to offer complete loyalty to his employer, past and present, in all business affairs and discharge his duties with integrity and in accordance with the highest standards of business ethics. An engineer is expected to properly credit the contributions of others in engineering practice.

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.

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.

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

Both Jonathan and Jackson were facing an ethical dilemma that might put their personal values such as respect, responsibility and honesty to challenge. In handling the situation, they should identify the relevant facts and take stock of all stakeholders concerned. The following factors should be taken into consideration when identifying viable alternatives and choosing the best course of action:

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

The ETHICS PLUS ethical decision making model might be helpful for them in solving the dilemma.

As far as compliance is concerned, Jackson might violate Section 4(1) of the Prevention of Bribery Ordinance (POBO) if he, without lawful authority or reasonable excuse, offered advantages (e.g. money) to a public servant (i.e. a staff member of the Lands Office) for the public servant’s assistance in leaking the restricted information (i.e. an act in relation to the public servant’s capacity).  The staff member of the Lands Office as a public servant, who solicited or accepted the advantage for releasing the restricted information, might also violate Section 4(2) of the POBO.

On the other hand, the Code of Professional Conduct issued by the Hong Kong Institute of Architects requires members to maintain high integrity standard and refrain from dishonourable conduct and practices in the architectural profession.  Any member whose conduct is found to be in contravention of the Code or dishonouring the principle of the Code is liable to reprimand, suspension or expulsion.

Corruption will inflate project costs and impair fair competition.  The quality of work would also be in question if the sub-contractor was not chosen by an objective assessment of its competence and capability.

If the assistant engineer leaked the tender information to the sub-contractor, he would breach the Rules of Conduct of the Hong Kong Institution of Engineers, which prohibited engineers from disclosing confidential information and require them to act in the best interest of the employers.

He might also commit a corruption offence under Section 9 of the Prevention of Bribery Ordinance (POBO) if he accepted an advantage as a reward for leaking the confidential tender information to the sub-contractor.

Although the “laisee” might be given in the Lunar New Year, the assistant engineer could not excuse himself by saying that the acceptance was a customary practice during festive seasons as that would not be accepted as a defence under the POBO.

The senior engineer might breach the Rules of Conduct of the Hong Kong Institution of Engineers, which require an engineer to safeguard confidential information in relation to his employer and to refrain from receiving any advantage for disclosing such information or making use of it for personal gain.

Being an employee of his company, the senior engineer might also breach Section 9 of the Prevention of Bribery Ordinance if he received an advantage to leak confidential information.  The offeror of such advantage would also breach the same law.

Although the advantage was solicited by the senior engineer's brother, the senior engineer himself could still be liable to the charge of a corruption offence as the advantage was to be received on his behalf.

Case Analysis

Under Section 9(1) of the Prevention of Bribery Ordinance (Cap.201) (POBO), it would be an offence if David (i.e. agent), without the approval of his employer (i.e. principal), accepted the advantage (i.e. the financial assistance to the down payment of the new flat) as an inducement to assisting Mr. CHAN to get the tender.  Meanwhile, Mr. CHAN might also be liable for promising to offer bribes to David under Section 9(2) of the POBO.

By leaking the insider information to Mr. CHAN, David might also breach the Rules of Conduct of the Hong Kong Institution of Engineers, which prohibited engineers from disclosing confidential information and required them to act in the best interest of the employers.

Corruption would impair fair competition and put public safety at stake.  The quality of work would be in question as the sub-contractor was not chosen by an objective assessment of its competence and capability.  To uphold professional ethics and avoid breaching the law, David should say no to Mr. CHAN’s request and report the matter to his company and/or the ICAC.

Case in Perspective

Leakage of sensitive or confidential tender information (e.g. bid prices) by compromised personnel to favour a particular bidder will undermine fair competition and integrity of the procurement process.  To prevent such malpractice, the company should establish a robust procurement system to ensure the selection of the most suitable contractor based on merit.  For example, 

(a) Take precautionary measures to prevent leakage of tender information, such as receiving tenders through secure electronic channels with the password split and separately held by different staff members, and tasking an independent team to witness tender opening;

(b) Prohibit the opening of tenders received before the deadline, and ensure tenders remain in the custody of designated officer to minimise the risk of information leakage;

(c) Accept late tenders only with the endorsement of the management (or the tender board, if any) on justifiable grounds; 

(d) Require staff involved in procurement to declare whether they have any conflict of interest in the matter, and manage any declared conflict to mitigate integrity risks; and

(e) Maintain proper documentation of the tendering process, including but not limited to meeting minutes, tender evaluation and negotiation, correspondence, and declaration and management of conflict of interest, to facilitate independent audits and ensure accountability. 

Robert contravenes the *Codes of Conduct by knowingly dealing in the same securities for himself before he executes transactions for the portfolios under his management.  Moreover, he is also in breach of the Fund Manager Code of Conduct as it prohibits a fund manager from buying or selling any stocks on a day in which he or other fund managers in his company has a pending "buy" or "sell" order in the same stocks until such order is executed or withdrawn.   Robert’s action actually amounts to front running.

*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.