Integrity Focus

A former senior sales executive of a frozen meat supplier, charged by the ICAC, was today (July 2) sentenced to three years’ imprisonment at the District Court after admitting that he had deceived his then employer into supplying over $5.2 million worth of goods to a food supplier operated by him by deliberately concealing his conflicting interest, but he had only settled payment of about $100,000.

Cheng Ming-lim, 49, former senior sales executive of H.R. Woodward Food Service Co., Limited (H.R. Woodward), received a jail term of three years today after pleading guilty to one count of fraud, contrary to section 16A of the Theft Ordinance.

In sentencing, Deputy District Judge Miss Ivy Chui Yee-mei noted that the defendant had abused his position for personal gain, which involved a considerable sum of money, constituting a serious breach of trust. Although the defendant’s employer had reminded its staff to declare conflicting interest from time to time, he deliberately concealed his personal food supplier business. The court took a starting point of four and a half years’ imprisonment, and reduced the jail term to three years, having considered his guilty plea and other mitigating factors.

The ICAC advises business organisations to formulate clear guidelines and systems of declaring 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 ICAC also provides integrity training for catering practitioners and corruption prevention materials for enhancing staff integrity of the industry. For more information about the corruption prevention resources, please visit the webpage of Hong Kong Business Ethics Development Centre.

The court heard that in late October 2020, the defendant joined H.R. Woodward, a frozen meat supplier. He was responsible for sourcing customers and processing purchase orders placed by customers, and had the discretion to set prices for purchase orders and payment terms. The defendant introduced Andreessen Food Service Company Limited (Andreessen), a food supplier, as its customer afterwards and handled the purchase orders placed by the latter personally.

Between July and December 2021, Andreessen placed various purchase orders with H.R. Woodward in the total sum of over $5.2 million.

The ICAC investigation arose from a corruption complaint. Enquiries revealed that Andreessen was set up long before the defendant joined H.R. Woodward. The defendant was all along responsible for the operation of Andreessen, while his wife and mother were respectively the sole shareholder-cum-director and secretary of the company.

Staff members of H.R. Woodward were not allowed to operate companies or to be employed by companies, including food or catering-related ones, which ran the same business as H.R. Woodward or were in competition with its business. However, the defendant had never declared his operation of Andreessen and had deliberately concealed his conflicting interest from H.R. Woodward when he handled Andreesen’s purchase orders in the capacity of an employee of H.R. Woodward with a view to deceive H.R. Woodward into selling goods to Andreesen.

The court also heard that Andreesen only managed to settle payments of about $100,000 out of the over $5.2 million worth of goods purchased from H.R. Woodward. Andreesen eventually returned some of the products for payment settling, but it still owed H.R. Woodward an outstanding amount of over $2.7 million.

H.R. Woodward rendered full assistance to the ICAC during its investigation into the case.

The prosecution was today represented by Senior Public Prosecutor Jason Lau, assisted by ICAC officer Chacha Chan.