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Aug 2024Woman charged by ICAC gets 24 months’ jail for $530,000 fraud over SWD’s traffic accident assistance payments and insurance claimsA woman, her husband and a relative of them were earlier charged by the ICAC for defrauding the Social Welfare Department (SWD) of Traffic Accident Victim Assistance (TAVA) payments and insurance companies of related compensation by allegedly making false representations about their injuries in traffic accidents. The wife, who earlier admitted that she had defrauded the SWD and three insurers out of a total of about $530,000, was today (August 26) sentenced at the Eastern Magistrates’ Courts to 24 months’ imprisonment.Chong Siu-fong, 41, beauty consultant, earlier pleaded guilty to five charges in two separate cases – two of fraud, contrary to section 16A of the Theft Ordinance; and three of conspiracy to defraud, contrary to the Common Law.In sentencing, Deputy Magistrate Ms Cindy Li Shantong remarked that the offences involved in the case were serious in nature as the defendant had defrauded the government of public funds, warranting an immediate custodial sentence.The court heard that SWD’s TAVA Scheme provided immediate financial assistance to traffic accident victims where applicants were required to submit application forms and sick leave certificates to the SWD.At the material time, Chong was employed by a cosmetic company. She had taken out medical and accident insurance policies with several insurers, including AIA International Limited (AIA), FWD Life Insurance Company (Bermuda) Limited (FWD) and Prudential Hong Kong Limited (Prudential).Between July 2020 and September 2022, Chong submitted two TAVA applications to the SWD, claiming that she was injured in two traffic accidents. She also made insurance claims from the three insurers on one of the traffic accidents.The SWD subsequently granted two TAVA payments totalling about $300,000 to Chong, while the three insurers released three sums of medical compensation totalling over $230,000 to her.The ICAC investigation arose from a corruption complaint in relation to the insurance claims. Enquiries revealed that Chong not only submitted false sick leave certificates when she filed applications with the SWD and the three insurers, she also falsely claimed that she was a housewife with no earnings, and that she had not filed applications with other insurers in respect of the traffic accidents concerned.Chong’s husband Yeung Ping-wai, 42, part-time chef, was also charged by the ICAC for his role in the scam. He earlier pleaded not guilty to one count of fraud at the Eastern Magistrates’ Courts. His case was scheduled for September 3 for a pre-trial review.Co-defendant Chan Hok-yan, 44, unemployed and ex-spouse of Chong’s elder sister, was earlier charged with one count of fraud and six counts of conspiracy to defraud. He failed to attend court on March 8 this year and a warrant for his arrest was issued by the Eastern Magistrates’ Courts on the same day.The SWD and the insurers concerned, namely AIA, FWD and Prudential, had rendered full assistance to the ICAC during its investigation into the cases.The prosecution was today represented by ICAC officers Teresa Cheung and Romeo Chu. 26
Aug 2024Joint Press release: ICAC and Competition Commission conduct second joint operation against corruption and bid-rigging over building maintenanceThe ICAC and the Competition Commission conducted a joint operation code-named “Shotgun” for two consecutive days on August 21 and 22, following the two agencies’ first collaborated action in mid-April against a newly-rising syndicate engaging in corruption and bid-rigging. After a four-month in-depth investigation and detailed analysis of evidence collected, the two agencies discovered that the syndicate might have been involved in other suspected corruption and bid-rigging activities and therefore took further enforcement actions.The ICAC further arrested five persons and interviewed 22 persons during this operation, including project contractors, project consultants, middlemen, members of property management companies, and members of Incorporated Owners (IO).In the joint operation, search warrants were executed by the ICAC and the Competition Commission to conduct searches at around 20 premises, including the offices of various project contractors, consultancies, as well as residences of the individuals concerned. Various exhibits were seized. The Competition Commission has also exercised its compulsory powers in the operation, requesting relevant companies and individuals to produce documents and information, and to attend before the Competition Commission to provide information relating to the case.The companies and individuals concerned were alleged to have solicited and accepted bribes and engaged in anti-competitive activities in order to manipulate the tendering exercises of building maintenance projects. They were also alleged to have exaggerated contract sums and assisted associated contractors in securing contracts of the projects.The investigation of ICAC mainly targeted renovation projects of two residential estates in Hong Kong Island, whereby corruption was suspected. The value of the two renovation project contracts was worth about $140 million in total. It is alleged that the backbone members of the syndicate, through a middle man, might have offered advantages to the IO members in order to ensure that the associated project contractors controlled by the syndicate would be awarded the renovation contracts of the two residential estates respectively, thus contravening section 9 of the Prevention of Bribery Ordinance (POBO). The renovation projects concerned have yet to be executed.Meanwhile, the investigation conducted by the Competition Commission concerned renovation projects of 38 residential estates / buildings, and industrial buildings in Hong Kong Island, Kowloon and the New Territories. The value of the relevant renovation contracts totalled over $1 billion, with individual contracts worth as much as $260 million. Some of the renovation contracts concerned have yet to be awarded and some had been overturned, while works of individual projects had commenced prior to the commencement of the Competition Commission’s investigations.During the tendering of renovation projects for the 38 aforementioned buildings, the companies and individuals concerned had allegedly manipulated the tender results by exchanging and coordinating bidding prices, either directly or through intermediaries, while some contractors had submitted cover bids. Such conduct would amount to bid-rigging, price-fixing and exchange of competitively sensitive information, contravening the First Conduct Rule of the Competition Ordinance.As investigation is ongoing, no further comment on the case will be made by the ICAC and the Competition Commission at this stage.The series of joint operations conducted by the ICAC and the Competition Commission demonstrate the determination of the two agencies in safeguarding a clean and level-playing field for the building maintenance industry, and that no corruption and anti-competitive conduct will be tolerated. The two agencies will continue to maintain close collaboration with other law enforcement agencies and related authorities to crack down on illegal activities and to safeguard the rights of property owners.The ICAC calls on property owners and members of the public that, should they suspect corruption is involved in building maintenance, they should make enquiries or report to the ICAC without delay. The ICAC’s report corruption hotline: 25 266 366. The Competition Commission calls on anyone who can provide information on the matter or the relevant practices to contact the Competition Commission as soon as possible by telephone on 3462 2118 or by e-mail at complaints@compcomm.hk. Those who consider that they may have engaged or been involved in cartel conduct should approach the Commission as soon as possible for leniency or co-operation (Leniency Hotline: 3996 8010; e-mail: leniency@compcomm.hk).The ICAC has all along been taking stringent enforcement action against corruption in the building management sector. The ICAC also actively supports flat owners and building management bodies (BMBs) in enhancing their anti-corruption capability through corruption prevention and education. The ICAC will continue to proactively approach BMBs and adopt an early intervention strategy, as well as to encourage flat owners to stay vigilant against corruption in renovation works through active participation in building management. To address the corruption risks in building maintenance projects, the ICAC has compiled and distributed the “Corruption Prevention 101 – Building Maintenance Tips” leaflet to provide corruption prevention suggestions and relevant information for owners. Members of the public can download the leaflet from the ICAC Corruption Prevention Advisory Service webpage (cpas.icac.hk). In collaboration with different government departments, regulators, professional bodies and trade associations, the ICAC will continue to organise integrity training to enhance practitioners’ professional conduct and resistance to bribery temptations. The ICAC has also produced a wide range of practical education resources which are available in the Integrity and Quality Building Management website (bm.icac.hk). Citizens are also welcome to call the Integrity Building Management Enquiry Hotline at 2929 4555 for ICAC services.Apart from enforcement actions, the Competition Commission has been actively launching publicity and educational initiatives to raise public awareness of bid-rigging and other anti-competitive conduct, and to assist procurers in strengthening their preventive efforts. In addition to rolling out a series of educational resources on its website, the Commission also spares no effort in engaging with the community. Over the past year, the Competition Commission has attended 19 briefings on building maintenance and management, reaching out to property owners and property managers in various districts, as well as relevant government departments and public bodies, to promote the message of combatting bid-rigging. Separately, the Competition Commission has also published a set of model “Non-collusion Clauses” for procurers to incorporate into their invitation to bid documents and contracts, with a view to reducing their exposure to anti-competitive conduct during procurement exercises. In essence, the “Non-collusion Clauses” serve to warn bidders of the prohibition against, and consequences of, entering into anti-competitive arrangements, as well as to provide a clear and straightforward contractual remedy for procurers in the event that these clauses have been breached. Both Chinese and English versions of the model clauses are available for downloading at www.compcomm.hk. 21
Aug 2024Joint press release: ICAC, SFC and Macao Judiciary Police conduct joint operation against suspected cross-boundary fraud and misconduct in listed companyThe Independent Commission Against Corruption (ICAC), the Securities and Futures Commission (SFC) and the Macao Judiciary Police jointly mounted an operation codenamed “Demarcation” on August 19 and 20 in relation to suspected cross-boundary fraud and misconduct. Senior executives of a listed company in Hong Kong were allegedly involved in fictitious transactions and false accounting totalling around HK$120 million.Six premises were jointly searched by the ICAC and the SFC. During the joint operation, the ICAC also arrested seven persons, including the chairman and an executive director of the listed company.The arrestees had allegedly committed the offence of agent using documents with intent to deceive his principal under the Prevention of Bribery Ordinance.The investigation revealed that the chairman of the listed company and other individuals had allegedly falsified business documents and accounting records of the company’s subsidiaries in Hong Kong and Macao, while the company’s trade receivables totalling over MOP 113 million (about HK$110 million) were reduced. Meanwhile, the individuals concerned had also allegedly used false documents and accounting records to conceal the misappropriation of the company’s funds over HK$9 million.The above conduct may have resulted in the commission of offences or misconduct by the listed company and/or its management which contravene certain provisions under the Securities and Futures Ordinance for disclosing false or misleading information, as well as for defalcation, fraud, misfeasance, or other misconduct in relation to the conduct of the business or affairs of the listed company.As cross-boundary crimes were involved in the case, the Macao Judiciary Police also launched an investigation into relevant individuals’ suspected fraud offences which took place in Macao. Simultaneous to the ICAC operation, the Macao Judiciary Police earlier kicked off the first-of-its-kind concurrent law enforcement action in Macao to search related premises and interview individuals concerned.As the investigation is ongoing, no further comment will be made by the ICAC and the SFC.“The joint operation fully demonstrates the close collaboration and determination of the two cities’ law enforcement agencies in tackling cross-boundary corruption and other crimes to maintain a clean and fair business environment and effective operation of the financial market. The ICAC will continue to work with the SFC and other law enforcement agencies to curb corruption and other illegal activities and bring local and cross-boundary criminals to justice,” ICAC Deputy Commissioner and Head of Operations Ricky Yau Shu-chun said.The SFC’s Executive Director of Enforcement Christopher Wilson said: “The SFC has zero tolerance when it comes to misconduct undermining the orderliness of the market and misconduct by management of listed companies. The joint action demonstrates the determination of law enforcement agencies in both jurisdictions to combat cross-boundary illegal activities involving listed companies. The SFC will continue to work closely with the ICAC and other local and extraterritorial law enforcement agencies to maintain market integrity and safeguard the interest of investors.” 20
Aug 2024SME director charged by ICAC gets 30 months’ jail for $102.5m bank loans fraudA director of a Small and Medium Enterprise (SME), charged by the ICAC, was today (August 20) sentenced to 30 months’ imprisonment at the District Court for his role in defrauding seven banks of 63 loans totalling over $82 million and banking facilities totalling $20.5 million, as well as deceiving the Trade and Industry Department (TID) and the Hong Kong Mortgage Corporation Limited (HKMC) into acting as guarantors for loans and facilities totalling $6.9 million granted by the banks.Desmond Chan Chi-hung, 63, sole director and shareholder of now defunct Mondex International Industries Limited (MIIL), earlier pleaded guilty to 13 counts of conspiracy to defraud, contrary to Common Law.In sentencing, Deputy Judge Ms May Chung Ming-sun remarked that the defendant played an important role in the scam as he had impersonated a company director upon the instruction by the mastermind of the scheme. She took a maximum starting point of four years’ imprisonment for the defendant’s 13 offences but reduced the jail term to 30 months, having considered his guilty plea and other mitigating factors.The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences, which took place between March 2011 and June 2014.The court heard that upon the request of the de facto owner of MIIL, which purportedly engaged in plastic material trading, the defendant became its sole director and shareholder in December 2010.To finance business development of local SMEs, various banks have long offered different types of credit facilities to SMEs. Between 2008 and 2011, the TID and the HKMC respectively launched various schemes, including SME Loan Guarantee Scheme and SME Financing Guarantee Scheme to assist SMEs to obtain credit facilities from banks by providing guarantees to them.The court heard that the defendant conspired with a clerk of MIIL, the aforesaid de facto owner of MIIL and a man employed by the de facto owner (the trio) to defraud Bank of China (Hong Kong) Limited, Citibank (Hong Kong) Limited, Dah Sing Bank Limited (Dah Sing Bank), DBS Bank (Hong Kong) Limited (DBSHK) and Industrial and Commercial Bank of China (Asia) Limited (ICBC Asia) by submitting to the aforesaid banks false supporting documents, including auditor’s reports and bank monthly statements, causing the five banks to grant banking facilities totalling $20.5 million to MIIL.The defendant also conspired with the trio and other persons unknown to defraud Dah Sing Bank, DBSHK, The Hongkong and Shanghai Banking Corporation Limited and Wing Lung Bank Limited (now known as CMB Wing Lung Bank Limited) by dishonestly submitting supporting documents purportedly in relation to transactions between MIIL and its six suppliers, causing the four banks to grant 63 loans totalling over $82 million to MIIL and to release the sums directly to the six suppliers concerned.In addition, the defendant also admitted having conspired with the trio to defraud the TID and the HKMC by dishonestly falsely representing that all the information contained in four application forms for the relevant guarantee schemes was true. As a result, the TID was caused to issue a guarantee in favour of Dah Sing Bank; and to act as the guarantor for a term loan totalling $500,000 granted by the bank to MIIL. The HKMC was thus caused to issue three guarantees in favour of Dah Sing Bank and ICBC Asia; and to act as the guarantor for various types of facilities totalling $6.4 million granted by the two banks to MIIL.The TID, the HKMC and the seven banks concerned had rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by prosecuting counsel Susanna Ku and assisted by ICAC officers Benny Chang and Stanley Cheung. 19
Aug 2024HZMB shuttle bus casual worker charged by ICAC gets 10 weeks’ jail for soliciting bribes from touristsA casual worker of the Hong Kong-Zhuhai-Macao Bridge (HZMB) shuttle bus, charged by the ICAC, today (August 19) admitted at the West Kowloon Magistrates’ Courts that he had solicited a bribe for assisting two tourists who failed to provide valid tickets to board a shuttle bus departing from Hong Kong for Zhuhai during the pandemic last year. The defendant was sentenced to 10 weeks’ imprisonment.Ng Kwong-lung, 36, then casual worker of Hong Kong-Zhuhai-Macao Bridge Shuttle Bus Company Limited (HZMBus), pleaded guilty to one count of agent soliciting an advantage and one count of agent accepting an advantage, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance.Principal Magistrate Miss Ivy Chui Yee-mei noted that the defendant had committed a serious offence. The case involved mainland tourists and such behaviour had damaged Hong Kong’s international reputation. She added that the sentence was meted out to uphold Hong Kong’s integrity and fairness. The Principal Magistrate also ordered the defendant to pay Hong Kong dollars equivalent to RMB 500 (i.e. HK$540) to HZMBus.HZMBus operates the HZMB shuttle bus service which runs between Hong Kong and Zhuhai. At the material time, according to the Mainland anti-pandemic measures, HZMB shuttle bus was allowed to carry a specific number of passengers daily from Hong Kong to Zhuhai. Only passengers with valid tickets booked through online real-name reservation were allowed to board the shuttle bus.The court heard that the defendant was assigned to assist passengers to conduct the check-in process at the check-in gate of the Hong Kong Port of the HZMB, and to verify whether passengers had valid tickets for that day.In the late evening of January 20, 2023, the day before Chinese New Year’s Eve, two tourists arrived at the Hong Kong Port of the HZMB. They sought assistance from the defendant as they had not managed to secure any tickets for that day or the following day.ICAC enquiries revealed that the defendant solicited a bribe of $1,000 from the duo for assisting them to get on board. The defendant accepted a bribe of RMB 500 from one of them and allowed her to get on board without a valid ticket. The other tourist refused the solicitation.HZMBus rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by Senior Public Prosecutor Douglas Lau, assisted by ICAC officer Keira Cheung.
Aug 2024Woman charged by ICAC gets 24 months’ jail for $530,000 fraud over SWD’s traffic accident assistance payments and insurance claimsA woman, her husband and a relative of them were earlier charged by the ICAC for defrauding the Social Welfare Department (SWD) of Traffic Accident Victim Assistance (TAVA) payments and insurance companies of related compensation by allegedly making false representations about their injuries in traffic accidents. The wife, who earlier admitted that she had defrauded the SWD and three insurers out of a total of about $530,000, was today (August 26) sentenced at the Eastern Magistrates’ Courts to 24 months’ imprisonment.Chong Siu-fong, 41, beauty consultant, earlier pleaded guilty to five charges in two separate cases – two of fraud, contrary to section 16A of the Theft Ordinance; and three of conspiracy to defraud, contrary to the Common Law.In sentencing, Deputy Magistrate Ms Cindy Li Shantong remarked that the offences involved in the case were serious in nature as the defendant had defrauded the government of public funds, warranting an immediate custodial sentence.The court heard that SWD’s TAVA Scheme provided immediate financial assistance to traffic accident victims where applicants were required to submit application forms and sick leave certificates to the SWD.At the material time, Chong was employed by a cosmetic company. She had taken out medical and accident insurance policies with several insurers, including AIA International Limited (AIA), FWD Life Insurance Company (Bermuda) Limited (FWD) and Prudential Hong Kong Limited (Prudential).Between July 2020 and September 2022, Chong submitted two TAVA applications to the SWD, claiming that she was injured in two traffic accidents. She also made insurance claims from the three insurers on one of the traffic accidents.The SWD subsequently granted two TAVA payments totalling about $300,000 to Chong, while the three insurers released three sums of medical compensation totalling over $230,000 to her.The ICAC investigation arose from a corruption complaint in relation to the insurance claims. Enquiries revealed that Chong not only submitted false sick leave certificates when she filed applications with the SWD and the three insurers, she also falsely claimed that she was a housewife with no earnings, and that she had not filed applications with other insurers in respect of the traffic accidents concerned.Chong’s husband Yeung Ping-wai, 42, part-time chef, was also charged by the ICAC for his role in the scam. He earlier pleaded not guilty to one count of fraud at the Eastern Magistrates’ Courts. His case was scheduled for September 3 for a pre-trial review.Co-defendant Chan Hok-yan, 44, unemployed and ex-spouse of Chong’s elder sister, was earlier charged with one count of fraud and six counts of conspiracy to defraud. He failed to attend court on March 8 this year and a warrant for his arrest was issued by the Eastern Magistrates’ Courts on the same day.The SWD and the insurers concerned, namely AIA, FWD and Prudential, had rendered full assistance to the ICAC during its investigation into the cases.The prosecution was today represented by ICAC officers Teresa Cheung and Romeo Chu. 26
Aug 2024Joint Press release: ICAC and Competition Commission conduct second joint operation against corruption and bid-rigging over building maintenanceThe ICAC and the Competition Commission conducted a joint operation code-named “Shotgun” for two consecutive days on August 21 and 22, following the two agencies’ first collaborated action in mid-April against a newly-rising syndicate engaging in corruption and bid-rigging. After a four-month in-depth investigation and detailed analysis of evidence collected, the two agencies discovered that the syndicate might have been involved in other suspected corruption and bid-rigging activities and therefore took further enforcement actions.The ICAC further arrested five persons and interviewed 22 persons during this operation, including project contractors, project consultants, middlemen, members of property management companies, and members of Incorporated Owners (IO).In the joint operation, search warrants were executed by the ICAC and the Competition Commission to conduct searches at around 20 premises, including the offices of various project contractors, consultancies, as well as residences of the individuals concerned. Various exhibits were seized. The Competition Commission has also exercised its compulsory powers in the operation, requesting relevant companies and individuals to produce documents and information, and to attend before the Competition Commission to provide information relating to the case.The companies and individuals concerned were alleged to have solicited and accepted bribes and engaged in anti-competitive activities in order to manipulate the tendering exercises of building maintenance projects. They were also alleged to have exaggerated contract sums and assisted associated contractors in securing contracts of the projects.The investigation of ICAC mainly targeted renovation projects of two residential estates in Hong Kong Island, whereby corruption was suspected. The value of the two renovation project contracts was worth about $140 million in total. It is alleged that the backbone members of the syndicate, through a middle man, might have offered advantages to the IO members in order to ensure that the associated project contractors controlled by the syndicate would be awarded the renovation contracts of the two residential estates respectively, thus contravening section 9 of the Prevention of Bribery Ordinance (POBO). The renovation projects concerned have yet to be executed.Meanwhile, the investigation conducted by the Competition Commission concerned renovation projects of 38 residential estates / buildings, and industrial buildings in Hong Kong Island, Kowloon and the New Territories. The value of the relevant renovation contracts totalled over $1 billion, with individual contracts worth as much as $260 million. Some of the renovation contracts concerned have yet to be awarded and some had been overturned, while works of individual projects had commenced prior to the commencement of the Competition Commission’s investigations.During the tendering of renovation projects for the 38 aforementioned buildings, the companies and individuals concerned had allegedly manipulated the tender results by exchanging and coordinating bidding prices, either directly or through intermediaries, while some contractors had submitted cover bids. Such conduct would amount to bid-rigging, price-fixing and exchange of competitively sensitive information, contravening the First Conduct Rule of the Competition Ordinance.As investigation is ongoing, no further comment on the case will be made by the ICAC and the Competition Commission at this stage.The series of joint operations conducted by the ICAC and the Competition Commission demonstrate the determination of the two agencies in safeguarding a clean and level-playing field for the building maintenance industry, and that no corruption and anti-competitive conduct will be tolerated. The two agencies will continue to maintain close collaboration with other law enforcement agencies and related authorities to crack down on illegal activities and to safeguard the rights of property owners.The ICAC calls on property owners and members of the public that, should they suspect corruption is involved in building maintenance, they should make enquiries or report to the ICAC without delay. The ICAC’s report corruption hotline: 25 266 366. The Competition Commission calls on anyone who can provide information on the matter or the relevant practices to contact the Competition Commission as soon as possible by telephone on 3462 2118 or by e-mail at complaints@compcomm.hk. Those who consider that they may have engaged or been involved in cartel conduct should approach the Commission as soon as possible for leniency or co-operation (Leniency Hotline: 3996 8010; e-mail: leniency@compcomm.hk).The ICAC has all along been taking stringent enforcement action against corruption in the building management sector. The ICAC also actively supports flat owners and building management bodies (BMBs) in enhancing their anti-corruption capability through corruption prevention and education. The ICAC will continue to proactively approach BMBs and adopt an early intervention strategy, as well as to encourage flat owners to stay vigilant against corruption in renovation works through active participation in building management. To address the corruption risks in building maintenance projects, the ICAC has compiled and distributed the “Corruption Prevention 101 – Building Maintenance Tips” leaflet to provide corruption prevention suggestions and relevant information for owners. Members of the public can download the leaflet from the ICAC Corruption Prevention Advisory Service webpage (cpas.icac.hk). In collaboration with different government departments, regulators, professional bodies and trade associations, the ICAC will continue to organise integrity training to enhance practitioners’ professional conduct and resistance to bribery temptations. The ICAC has also produced a wide range of practical education resources which are available in the Integrity and Quality Building Management website (bm.icac.hk). Citizens are also welcome to call the Integrity Building Management Enquiry Hotline at 2929 4555 for ICAC services.Apart from enforcement actions, the Competition Commission has been actively launching publicity and educational initiatives to raise public awareness of bid-rigging and other anti-competitive conduct, and to assist procurers in strengthening their preventive efforts. In addition to rolling out a series of educational resources on its website, the Commission also spares no effort in engaging with the community. Over the past year, the Competition Commission has attended 19 briefings on building maintenance and management, reaching out to property owners and property managers in various districts, as well as relevant government departments and public bodies, to promote the message of combatting bid-rigging. Separately, the Competition Commission has also published a set of model “Non-collusion Clauses” for procurers to incorporate into their invitation to bid documents and contracts, with a view to reducing their exposure to anti-competitive conduct during procurement exercises. In essence, the “Non-collusion Clauses” serve to warn bidders of the prohibition against, and consequences of, entering into anti-competitive arrangements, as well as to provide a clear and straightforward contractual remedy for procurers in the event that these clauses have been breached. Both Chinese and English versions of the model clauses are available for downloading at www.compcomm.hk. 21
Aug 2024Joint press release: ICAC, SFC and Macao Judiciary Police conduct joint operation against suspected cross-boundary fraud and misconduct in listed companyThe Independent Commission Against Corruption (ICAC), the Securities and Futures Commission (SFC) and the Macao Judiciary Police jointly mounted an operation codenamed “Demarcation” on August 19 and 20 in relation to suspected cross-boundary fraud and misconduct. Senior executives of a listed company in Hong Kong were allegedly involved in fictitious transactions and false accounting totalling around HK$120 million.Six premises were jointly searched by the ICAC and the SFC. During the joint operation, the ICAC also arrested seven persons, including the chairman and an executive director of the listed company.The arrestees had allegedly committed the offence of agent using documents with intent to deceive his principal under the Prevention of Bribery Ordinance.The investigation revealed that the chairman of the listed company and other individuals had allegedly falsified business documents and accounting records of the company’s subsidiaries in Hong Kong and Macao, while the company’s trade receivables totalling over MOP 113 million (about HK$110 million) were reduced. Meanwhile, the individuals concerned had also allegedly used false documents and accounting records to conceal the misappropriation of the company’s funds over HK$9 million.The above conduct may have resulted in the commission of offences or misconduct by the listed company and/or its management which contravene certain provisions under the Securities and Futures Ordinance for disclosing false or misleading information, as well as for defalcation, fraud, misfeasance, or other misconduct in relation to the conduct of the business or affairs of the listed company.As cross-boundary crimes were involved in the case, the Macao Judiciary Police also launched an investigation into relevant individuals’ suspected fraud offences which took place in Macao. Simultaneous to the ICAC operation, the Macao Judiciary Police earlier kicked off the first-of-its-kind concurrent law enforcement action in Macao to search related premises and interview individuals concerned.As the investigation is ongoing, no further comment will be made by the ICAC and the SFC.“The joint operation fully demonstrates the close collaboration and determination of the two cities’ law enforcement agencies in tackling cross-boundary corruption and other crimes to maintain a clean and fair business environment and effective operation of the financial market. The ICAC will continue to work with the SFC and other law enforcement agencies to curb corruption and other illegal activities and bring local and cross-boundary criminals to justice,” ICAC Deputy Commissioner and Head of Operations Ricky Yau Shu-chun said.The SFC’s Executive Director of Enforcement Christopher Wilson said: “The SFC has zero tolerance when it comes to misconduct undermining the orderliness of the market and misconduct by management of listed companies. The joint action demonstrates the determination of law enforcement agencies in both jurisdictions to combat cross-boundary illegal activities involving listed companies. The SFC will continue to work closely with the ICAC and other local and extraterritorial law enforcement agencies to maintain market integrity and safeguard the interest of investors.” 20
Aug 2024SME director charged by ICAC gets 30 months’ jail for $102.5m bank loans fraudA director of a Small and Medium Enterprise (SME), charged by the ICAC, was today (August 20) sentenced to 30 months’ imprisonment at the District Court for his role in defrauding seven banks of 63 loans totalling over $82 million and banking facilities totalling $20.5 million, as well as deceiving the Trade and Industry Department (TID) and the Hong Kong Mortgage Corporation Limited (HKMC) into acting as guarantors for loans and facilities totalling $6.9 million granted by the banks.Desmond Chan Chi-hung, 63, sole director and shareholder of now defunct Mondex International Industries Limited (MIIL), earlier pleaded guilty to 13 counts of conspiracy to defraud, contrary to Common Law.In sentencing, Deputy Judge Ms May Chung Ming-sun remarked that the defendant played an important role in the scam as he had impersonated a company director upon the instruction by the mastermind of the scheme. She took a maximum starting point of four years’ imprisonment for the defendant’s 13 offences but reduced the jail term to 30 months, having considered his guilty plea and other mitigating factors.The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences, which took place between March 2011 and June 2014.The court heard that upon the request of the de facto owner of MIIL, which purportedly engaged in plastic material trading, the defendant became its sole director and shareholder in December 2010.To finance business development of local SMEs, various banks have long offered different types of credit facilities to SMEs. Between 2008 and 2011, the TID and the HKMC respectively launched various schemes, including SME Loan Guarantee Scheme and SME Financing Guarantee Scheme to assist SMEs to obtain credit facilities from banks by providing guarantees to them.The court heard that the defendant conspired with a clerk of MIIL, the aforesaid de facto owner of MIIL and a man employed by the de facto owner (the trio) to defraud Bank of China (Hong Kong) Limited, Citibank (Hong Kong) Limited, Dah Sing Bank Limited (Dah Sing Bank), DBS Bank (Hong Kong) Limited (DBSHK) and Industrial and Commercial Bank of China (Asia) Limited (ICBC Asia) by submitting to the aforesaid banks false supporting documents, including auditor’s reports and bank monthly statements, causing the five banks to grant banking facilities totalling $20.5 million to MIIL.The defendant also conspired with the trio and other persons unknown to defraud Dah Sing Bank, DBSHK, The Hongkong and Shanghai Banking Corporation Limited and Wing Lung Bank Limited (now known as CMB Wing Lung Bank Limited) by dishonestly submitting supporting documents purportedly in relation to transactions between MIIL and its six suppliers, causing the four banks to grant 63 loans totalling over $82 million to MIIL and to release the sums directly to the six suppliers concerned.In addition, the defendant also admitted having conspired with the trio to defraud the TID and the HKMC by dishonestly falsely representing that all the information contained in four application forms for the relevant guarantee schemes was true. As a result, the TID was caused to issue a guarantee in favour of Dah Sing Bank; and to act as the guarantor for a term loan totalling $500,000 granted by the bank to MIIL. The HKMC was thus caused to issue three guarantees in favour of Dah Sing Bank and ICBC Asia; and to act as the guarantor for various types of facilities totalling $6.4 million granted by the two banks to MIIL.The TID, the HKMC and the seven banks concerned had rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by prosecuting counsel Susanna Ku and assisted by ICAC officers Benny Chang and Stanley Cheung. 19
Aug 2024HZMB shuttle bus casual worker charged by ICAC gets 10 weeks’ jail for soliciting bribes from touristsA casual worker of the Hong Kong-Zhuhai-Macao Bridge (HZMB) shuttle bus, charged by the ICAC, today (August 19) admitted at the West Kowloon Magistrates’ Courts that he had solicited a bribe for assisting two tourists who failed to provide valid tickets to board a shuttle bus departing from Hong Kong for Zhuhai during the pandemic last year. The defendant was sentenced to 10 weeks’ imprisonment.Ng Kwong-lung, 36, then casual worker of Hong Kong-Zhuhai-Macao Bridge Shuttle Bus Company Limited (HZMBus), pleaded guilty to one count of agent soliciting an advantage and one count of agent accepting an advantage, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance.Principal Magistrate Miss Ivy Chui Yee-mei noted that the defendant had committed a serious offence. The case involved mainland tourists and such behaviour had damaged Hong Kong’s international reputation. She added that the sentence was meted out to uphold Hong Kong’s integrity and fairness. The Principal Magistrate also ordered the defendant to pay Hong Kong dollars equivalent to RMB 500 (i.e. HK$540) to HZMBus.HZMBus operates the HZMB shuttle bus service which runs between Hong Kong and Zhuhai. At the material time, according to the Mainland anti-pandemic measures, HZMB shuttle bus was allowed to carry a specific number of passengers daily from Hong Kong to Zhuhai. Only passengers with valid tickets booked through online real-name reservation were allowed to board the shuttle bus.The court heard that the defendant was assigned to assist passengers to conduct the check-in process at the check-in gate of the Hong Kong Port of the HZMB, and to verify whether passengers had valid tickets for that day.In the late evening of January 20, 2023, the day before Chinese New Year’s Eve, two tourists arrived at the Hong Kong Port of the HZMB. They sought assistance from the defendant as they had not managed to secure any tickets for that day or the following day.ICAC enquiries revealed that the defendant solicited a bribe of $1,000 from the duo for assisting them to get on board. The defendant accepted a bribe of RMB 500 from one of them and allowed her to get on board without a valid ticket. The other tourist refused the solicitation.HZMBus rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by Senior Public Prosecutor Douglas Lau, assisted by ICAC officer Keira Cheung.