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?

Timmy, an estate agent, was commissioned by Mrs Chung, a landlord, to sell a residential unit at $9,000,000. Ms Lam, a client, expressed willingness to buy the unit at $8,780,000 but instead of informing Mrs Chung of the offer, Timmy told Mrs Chung that a client had agreed to buy her unit at $8,580,000 in the name of a limited company. He persuaded Mrs Chung to sell the unit at a reduced price for cash flow reason as there were signs that property prices were going down. Mrs Chung eventually agreed. However, Mrs Chung later found out that, after the transaction was completed, the buyer had immediately sold the unit to Ms Lam at $8,780,000. She reported the case to the ICAC which subsequently revealed that Timmy was one of the shareholders of the limited company which was the buyer.

Mrs Mo, a flat owner, commissioned an estate agency as the sole agent for the sale of a shop premises priced at $13.6 million. The company assigned Anna and Bill to take care of the matter.

One day, Anna found a buyer who offered to buy the premises for $14 million. As Anna could not reach Mrs Mo at that moment and had to leave office for an urgent meeting, she asked Bill to contact Mrs Mo. When Bill contacted Mrs Mo, he told her that a buyer had offered $12.8 million for the premises. Bill eventually persuaded Mrs Mo to accept the offer and sign a provisional sale and purchase agreement.

The next day, Bill told Anna that the shop premises had been sold to his client Mr Sung who was willing to re-sell the premises to Anna’s original buyer as a confirmor. Sensing something was suspicious, Anna reported to her supervisor that Bill might have breached the company’s code of practice by showing favour to Mr Sung to sell him the premises at a lower price.

While the estate agency conducted an internal investigation, Bill begged Anna to falsely claim that she had only met the original buyer who made the $14 million offer after the provisional sale and purchase agreement had been signed. Anna immediately refused.

In fact, the whole situation happened because Bill did not want to share the commission equally with Anna. Instead of co-operating with Anna, he wanted to handle the transaction alone. He thus sought assistance from his friend Mr Sung in buying the shop at a lower price and then re-selling it as a confirmor to Anna’s original buyer at a higher price. Through this way, Bill not only could receive more than $50,000 commission from both the buyer and seller, he could also share the profits from the price difference with Mr Sung. The estate agency refused to pay Bill the commission and reported the situation to the ICAC.

Director Mr Lai was a village-type house developer and a director of an estate agency. His agency had acquired a land lot in the New Territories for constructing village-type houses.

Mr Lai assigned the project to his assistant Clement who held an estate agent’s licence. Clement knew Mr Shum who claimed himself a village representative. They often gambled together and Clement ended up owing money to Mr Shum. When Clement failed to make a repayment, Mr Shum asked Clement to deceive Mr Lai by making use of Mr Lai’s eagerness to get the project underway so that Clement could repay the debts. Clement felt he had no alternative but to do as Mr Shum instructed.  One day, Clement told Mr Lai that Mr Shum, the village representative, had asked the company to donate $500,000 to the village fund. Otherwise, the village residents would object the coming village-type house construction project. To avoid complications, Mr Lai made a cheque to Mr Shum and Clement returned a false receipt on Mr Shum’s behalf.  

Later, Mr Lai suspected that corruption might be involved in the incident and reported it to the ICAC.  After investigation, it was found that Mr Shum was not a real village representative, but only an ordinary villager.

Ronald worked in an estate agency. His employer trusted him and provided him with training; yet Ronald felt he could have done better. Ronald planned to marry his girlfriend in a year’s time. To prepare for the costly wedding, he applied for a huge loan from a finance company, putting himself in a position where he had to work very hard to repay the debt. After successfully renting out Ms Yeung’s flat at $30,000 per month, Ronald asked Ms Yeung to deposit the $15,000 commission into the bank account of a consultancy firm which was set up by himself. Ronald also lied about the consultancy firm being a subsidiary of the estate agency which he worked for. To conceal the whereabouts of the commission, Ronald submitted a false report to his employer stating that Ms Yeung’s tenancy transaction had been facilitated by a consultancy firm and Ms Yeung would only be willing to pay commission to the consultancy firm. Ronald’s employer was suspicious about these arrangements and checked the consultancy firm’s details. Ronald’s dishonest act was revealed and a report was made to the ICAC.

Gordon was an estate agent in an estate agency.  Mr Yu, a client, commissioned Gordon to sell four commercial units, specifying a minimum average price of $20,000 per square foot. As Gordon knew his cousin Johnny planned to invest in commercial buildings in that district, he recommended Mr Yu’s units and sold two of them to Johnny at around $18,000 per square foot. To thank Gordon, Johnny offered him “tea money” of $150,000. Gordon then found another buyer, Mr Pau, for the remaining two units, asking $24,000 per square foot in order to fulfil Mr Yu’s price instructions. After several negotiations, the transaction was concluded at $22,000 per square foot. Although Gordon succeeded in selling Mr Yu’s units at an average price of $20,000 per square foot, Mr Yu suspected that Gordon had favoured Johnny and corruption was involved. He therefore reported the case to the ICAC. Gordon argued in court that the transaction had been concluded according to Mr Yu’s wishes and neither the estate agency nor Mr Yu had suffered any loss. However, the estate agency employing Gordon had stipulated that no agent was allowed to accept any private advantage from clients. The seller Mr Yu was also dissatisfied with Gordon’s behaviour.

Vincent, an estate agent of an agency, facilitated the sale of Mr Leung’s flat to Mrs Pong at a price of $34 million. In line with regular practice, both buyer and seller had to pay 1% of the purchase price as commission to the agency. After the transaction was completed, Vincent showed an agreement and a fax to Mr Leung and Mrs Pong. The agreement indicated that the transaction had been carried out through two estate agencies, Vincent’s agency and Agency B. The fax was issued by Vincent’s agency and indicated that Agency B would collect the commission on its behalf. As the agreement and fax bore the signatures of the persons responsible in both estate agencies as well as company chops, Mr Leung and Mrs Pong paid the commission accordingly. In fact, Vincent had forged the agreement and fax document with a view to embezzling his employer’s commission using Agency B’s account. Agency B was later to return 80% of the commission it received to Vincent. Meanwhile, Vincent told his employer that another estate agency had beaten him to the transaction. Vincent’s agency made a report to the ICAC after suspecting that Vincent had been bribed to refer business to another estate agency.