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Case Studies
False accounting
Cherry was a shipping clerk of Silky Way Ltd (SWL), a manufacturer of silk blouses for export to overseas buyers. SWL had factories in Hong Kong, Guangzhou and Fuzhou.
Cherry was on good terms with Ray, proprietor of All-The-Way Forwarding Company which handled more than 80%of the shipment for SWL. All-The-Way had been making a handsome profit all along and Ray felt that this was partly due to Cherry who smoothed out whatever hiccups there might be in the freight arrangement.
When Christmas was near, he asked Cherry out for dinner. Over dessert, Ray presented Cherry with an expensive watch. Cherry was surprised but pleased.
Ray then went on to talk about his plans for the coming year. He told Cherry he would like to set up a partnership with Cherry. Noting that Cherry was in a puzzle, Ray elaborated.
“I always feel that the practice within the freight forwarding business of charging shipments of Chinese products a lower rate unreasonable. I am going to equalise all charges for all shipments despite the fact that some goods are manufactured in China. Your boss need not know the change or else he might turn to other forwarding companies. You just help me in handling the documents and you can get your share. Nobody will raise any queries if you are in charge. They all trust you.”
When Cherry was too surprised to answer, Ray went on, “It would not be difficult at all to make alterations in the computer database. With the printouts, you can proceed to work on the invoices and accounts easily.”
Cherry did not know what to say. It seemed to be a tempting proposal but to do so would be cheating SWL. While she was hesitating, Ray prodded again. “You deserve more than what you are getting now at SWL. With all the time and energy that you are putting in at the office, you are grossly underpaid. You have to look after your own interest too. SWL is already running a flourishing business.”
Case Analysis
In the above case, Cherry was an employee of the manufacturer i.e. an agent under Section 9 of the Prevention of Bribery Ordinance (POBO), while the manufacturer was her principal.
According to Section 2 of the POBO, advantage means any gift, loan, fee, reward or commission, employment, contract, service, favour, payment, release or discharge of loan or liability, etc.
Under Section 9(1) of the Prevention of Bribery Ordinance (POBO), it was an offence for Cherry (an employee), without the approval of her employer, to accept advantages (i.e. the expensive watch and other monetary rewards) for making false accounting records to conceal the marked up shipment cost. Ray might also violate Section 9(2) of the POBO for offering bribes.
Furthermore, Cherry might breach Section 9(3) of the POBO by intentionally using false documents to deceive and mislead her principal, i.e. the manufacturer.
Ray and Cherry, who conspired to provide false information to mislead the manufacturer, might also commit offences of false accounting and deception.