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Case Studies
Make profit in bidding
Barry was a Senior Project Manager of a construction company in Hong Kong. Recently, his company was going to put in a bid to be the principal subcontractor of a project in the Mainland. The bid was RMB500 million. Barry then negotiated with Echo Ltd, the state-owned main contractor of the project that was asking for the bid. The Echo manager told Barry that his company would get the contract if he could inflate the bidding price from RMB500 million to RMB550 million. The manager further explained that the additional RMB50 million would be shared equally among the Managing Director of Echo Ltd, the manager himself and Barry as a hook to ensure Barry’s silence. Barry was disturbed because he had heard of stories like this which the bidder got physical harms as a return for refusal to cooperate.
Would Barry violate any bribery offence if he acceded to the Echo manager’s request? What should Barry do?
Case Analysis
When conducting business overseas, it is important to watch out for increased bribery risks that may come with business operations under different systems and cultures. Companies should pay special attention to the local laws and regulations in different jurisdictions as well as foreign bribery laws with extra-territorial effect.
In the case study, if Barry agreed with the Echo manger to inflate the bidding price in order to win the contract, Barry, the Echo Managing Director and the Echo manager might violate the anti-bribery provisions in the PRC Criminal Law.
In case any part of the bribery offence took place in Hong Kong, Barry might also breach Section 9 of the Prevention of Bribery Ordinance if he, without lawful authority or reasonable excuse, offered bribes to the Echo manager as an inducement or reward for securing the contract.
To avoid breaching the law and protect himself from any physical harm, Barry was suggested to report the matter to his company and seek help from local authorities.