3. Corruption pitfalls
Video 4 – Under-the-table deal
Case analysis
Kwok-yin
- ● It is a conflict of interest for Kwok-yin to invest in Paul’s company through his wife’s account. Even though it seems that his act has not affected the bank’s business, this is a breach of the HKMA Supervisory Policy Manual – Code of Conduct. (Please refer to para 2.4 of the Code: Conflicts of interest)
- ● He will also violate the bank’s credit policies if he conceals Paul’s actual financial position for facilitating the postponement of the repayment schedule, irrespective of whether he accepts additional bonus from Paul’s company or not.
- ● He will commit an offence of conspiracy to defraud if he, knowing that Paul’s financial reports are falsified, assists Paul in postponing the payment schedule.
- ● He will violate section 9 of the Prevention of Bribery Ordinance (PBO) if he accepts additional bonus from Paul’s company through his wife’s account as a reward for his assistance.
Paul
- ● Paul commits fraud as he uses falsified financial reports to apply for postponement of the repayment schedule.
- ● He also violates section 9 of the PBO when he offers additional bonus of his company to Paul through the account of Paul’s wife.
Other points to note
- ● Kwok-yin and Paul attempt to cover up their corrupt transactions through the account of Kwok-yin’s wife. However, this does not alter the fact that Kwok-yin accepts the advantages from Paul. In addition, Kwok-yin’s wife may be suspected of being involved in the scam and subject to criminal prosecution.