Integrity Focus

A former manager of an electric motors company, charged by the ICAC, was today (December 4) sentenced to 54 months’ imprisonment at the Court of First Instance of the High Court for deceiving the company into placing over 1,300 purchase orders of electronic parts worth totalling over $70 million with a supplier in six and a half years by concealing the interest of himself and his family member in the supplier.

Seh Yat-wing, 60, former manager of Johnson Electric Group, earlier pleaded guilty to two counts of fraud, contrary to section 16A of the Theft Ordinance.

In sentencing, Mr Justice Andrew Chan Hing-wai noted that the defendant had abused his position, breached the trust in him and made a profit of nearly $7.4 million out of the scheme secretly. Having taken various mitigating factors into account, a 54 months’ imprisonment was imposed on the defendant.

The ICAC advises business organisations to establish clear guidelines and systems of declaration on conflict of interest. Staff members of business organisations are reminded to avoid conflict of interest situations and to make timely declaration to their employers. Concealing any conflict of interest in relation to one’s official duties to benefit himself or his associates may constitute a breach of the Prevention of Bribery Ordinance or other criminal law.

The court heard that publicly listed Johnson Electric Holdings Limited and its subsidiaries (collectively referred to as Johnson Electric Group) engaged in the manufacturing and sale of motion systems. In accordance with the policy of Johnson Electric Group managing conflict of interest, its employees should not engage in any business of its suppliers or customers. In addition, its employees should disclose relationships that may present a possible conflict of interest.

The defendant joined Johnson Electric Group in 2006 as assistant manager and was promoted to manager in 2015. He was responsible for selecting suitable suppliers for the group and procuring electric parts.

The ICAC investigation arose from a corruption complaint. Enquiries revealed that in September 2010, the defendant approved the applications of Eaton Enterprise Limited (Eaton) for registering as supplier of Johnson Electric Group. Between September 2010 and March 2017, Johnson Electric Group placed over 1,300 orders of electric parts with Eaton and settled payments amounted to over $70 million.

ICAC enquiries revealed that the defendant concealed from Johnson Electric Group his or his family member’s interests in Eaton. At the material time, the defendant and the registered sole director cum shareholder of Eaton gave birth to a girl, but the defendant had never declared to Johnson Electric Group their relationship and his interest in Eaton. Had Johnson Electric Group known the relationship between the defendant and Eaton, it would not have registered Eaton as its supplier and placed orders with it.

Enquiries also revealed that the defendant received from Eaton around $7.4 million out of the payments settled by Johnson Electric Group totalling over $70 million.

Johnson Electric Group rendered full assistance to the ICAC during its investigation into the case.

The prosecution was today represented by Senior Public Prosecutor Audrey Parwani, assisted by ICAC officer Kenneth Chan.