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Case Studies
Abusing power for personal gain
Mr Kwok, a manager of a listed company, was responsible for the company’s investment in the property market, in which several ten million dollars was usually involved. Mr Kwok commissioned two estate agents Raymond and Freddy from two different estate agencies to source suitable properties for his company. He always told Raymond and Freddy that there were many estate agents approaching him for business. Facing fierce competition, Raymond and Freddy offered an ‘under-the-table’ commission of $520,000 and $1.7 million respectively to Mr Kwok for recommending the listed company to buy their properties.
When the listed company discovered that corruption might be involved in various property investment transactions which Mr Kwok handled, the company reported it to the ICAC.
Case Analysis
Mr Kwok, as an employee, might commit an offence under Section 9 of the Prevention of Bribery Ordinance (POBO) for, without the approval from his employer, soliciting and accepting an advantage (i.e. the ‘under-the-table’ commission offered by Raymond and Freddy) for recommending the listed company to buy their properties. Meanwhile, Raymond and Freddy both might also violate Section 9 of POBO for offering bribes.
Individual ethics and corporate culture are among the key factors which shape a company’s corporate governance. Company directors and senior executives serving the company should serve as role models.
Mr Kwok, who held an influential position at the company’s property investment, should have used the power bestowed on him by the listed company to protect its interests. However, Mr Kwok abused his company’s trust for personal gain and violated the law instead.
It is important for the company to work on an ethical culture at the corporate level through practicing ethical leadership, giving clear guidance on ethical standard expected of staff, managing integrity training and putting in place a comprehensive internal control system which helps company prevent and detect crime or malpractices as early as possible.