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Unauthorized loan from contractors

Trades / Industries:

A project engineer is employed by a chemical product manufacturer to supervise the engineering works performed by its contractors.   Due to his job nature, he develops a close companionship with a contractor who has recently undertaken a gas tank repair project of the company.


Learning that the project engineer suffers from substantial loss in a recent stock investment, the contractor immediately offers to lend the project engineer $200,000 to help him overcome the financial difficulty.


When time comes for an inspection to be conducted for the gas tank repairing works, the contractor requests the project engineer to turn a blind eye to certain defects found in the finished works, saying that the defects can have little chance to pose a safety hazard.   He also reminds the project engineer of his generosity to him in the past.   The project engineer finds it difficult to require the contractor to rectify all the defects found in the works.


Case Analysis

Besides breaching the Rules of Conduct of the Hong Kong Institution of Engineers, the project engineer may put his employer's interest and public safety at stake if he compromises his objectivity in professional judgment and turns a blind eye to substandard works.


The project engineer should not accept a loan from persons who have business dealings with the company, placing him into a position of obligation that may lead to a conflict of interest.


The project engineer and the contractor may be liable to the charge of a corruption offence under the Prevention of Bribery Ordinance (POBO) for offering and accepting a loan, an advantage under the PBO, in relation to the duties of the recipient's company without his employer's permission.

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