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Case Studies
Insider information in tendering
David worked in a construction company as a junior engineer after graduation. Through work, he became close with a subcontractor Mr. CHAN who often treated David lavish dinners and free trips to Macao. The two got along famously.
Recently, David’s company was conducting an open tendering exercise for a multi-billion project in Lantau, which Mr. CHAN was very keen. David was responsible for collecting the price quotation documents for the project. One day, Mr. CHAN invited David to a lavish dinner over which he made a proposal to David. He asked David to go through the quotations secretly and leaked him the price of the lowest bid. Then he would submit an even lower price just before the closing time to ensure the winning of the tender.
Knowing that David needed help for the down payment of his new flat, Mr. CHAN promised David a handsome contribution to the down payment if David helped him out. He also persuaded David that he was just as good as anyone else and that it would be a ‘win-win’ situation for both of them. David really needed a hand financially, and he did not want to sabotage the excellent relationship with Mr. CHAN.
Should David say yes to Mr. CHAN? Would this be illegal? Would it harm anybody in anyway?
Case Analysis
Under Section 9 of the Prevention of Bribery Ordinance, it would be an offence if David, without the approval of his employer, accepted the advantage (i.e. the financial assistance to the down payment of the new flat) as an inducement to assisting Mr. CHAN to get the tender. Meanwhile, Mr. CHAN might also be liable for offering bribes to David.
By leaking the inside information to Mr. CHAN, David might also breach the Rules of Conduct of the Hong Kong Institution of Engineers, which prohibited engineers from disclosing confidential information and required them to act in the best interest of the employers.
Corruption would impair fair competition and put public safety at stake. The quality of work would be in question as the subcontractor was not chosen by an objective assessment of its competence and capability. To uphold professional ethics and avoid breaching the law, David should say no to CHAN’s request and report the matter to his company or the ICAC.