Resources

Margaret was an account manager of a brokerage company.  Daniel, her client, treated her and her subordinates to a luxurious dinner and offered her an antique watch after earning a good sum of money in his investment.

Alan is a senior portfolio manager of a pension fund in a large asset management  corporation.    He  is  also  a  member  of  the  company’s  broker selection committee and has an influence on the proportion of business allocated to external brokers.   Agnes is an account manager of a brokerage firm which, to Alan’s knowledge, charges a higher brokerage rate but offers a poor level of service.    On  one  occasion,  Agnes  invites  Alan  to  join  her  for  a  drink  and eventually explains to him that she is prepared to rebate him if he can persuade other members in the selection committee to direct business to her.   To get things moving, she proposes placing $100,000 into Alan’s bank account. Succumbing to the temptation, Alan gives Agnes his account number.  This "under-the-table" arrangement is finally exposed and reported to the ICAC by a colleague of Alan.   Both Alan and Agnes are arrested even before they execute the corruption deal.

Ken is working for an international futures trading company as a dealing manager.   His company often receives orders from fund managers whose moves can significantly affect the market.  Taking this opportunity, Ken makes some secret arrangements with Anna, a dealer of another futures trading company, that whenever Ken receives "purchase" orders from his company, he will call Anna immediately to advise her to buy contracts.   After Anna has completed her order, Ken executes his company’s orders.   Since his company’s orders are usually in bulk, the price of the futures contract is driven up within a short time interval. Anna then sells the contracts and shares the profit with Ken.   Similar arrangements are made when Ken receives "sell" orders from the company.

Dominic is a sales manager of a brokerage company and he has a few corporate clients.   One of his clients is a listed company named Treasure Hunt. During a cocktail reception, the financial controller of Treasure Hunt, Tony, talks to Dominic about his plan to make some short-term financial gains.   According to Tony’s knowledge, an international corporation is planning to inject capital into Treasure Hunt, and he foresees its share price will rocket up if the deal is made. Tony, therefore, suggests to collaborate with Dominic to buy Treasure Hunt shares in advance.

With keen interest, Dominic further proposes to purchase the stocks through an external broker in order to disguise their identities.   A week later Treasure Hunt announces the capital injection arrangement and, as anticipated, its share price goes sky-high.   Dominic and Tony, having made a good profit, immediately sell their shares.

Highlander Construction Ltd, the main contractor of a housing development project, employed five crane operators for lifting building materials for sub-contractors in the construction site.   The staff handbook of Highlander clearly stipulated that staff was prohibited from soliciting or accepting advantages from persons having business dealings with the company, including sub-contractors.   The crane operators were briefed this policy by the Human Resources Manager when they were first recruited.

Shortly after the commencement of work, the crane operators discussed a trade practice among themselves and decided to charge sub-contractors ‘tea money’ of $9,000 per month for expediting lifting of their building materials. To those sub-contractors who did not pay, the crane operators would delay the lifting of their materials.

CHAN was the director of Shing Kee Engineering Ltd, a subcontractor responsible for the superstructure plumbing works.   He was familiar with the crane operators.   They often went out for meals and gambled after work. When the crane operators were in financial needs, CHAN would lend them money.

A resident engineer YU was aware that the crane operators often gave priority  to  CHAN  in  lifting  plumbing  materials  before  attending  to  other sub-contractors.   He was also aware that the crane operators and CHAN kept a very close relationship.   Although there were suspicious undertakings, YU did not make a complaint to the ICAC as he had no evidence of corruption.

The crane operators accepted $35,000 from CHAN over a period of seven months as a reward for giving special attention to the lifting of CHAN’s materials.   The incident was finally revealed and they were all arrested and eventually convicted of offering/accepting advantages as a reward for expediting lifting for CHAN, contrary to Section 9 of the Prevention of Bribery Ordinance (POBO).   All of them got imprisonment sentences.

CHAN was the breadwinner of his family.   While serving his term, his son who was studying abroad had to return to Hong Kong as his family could no longer afford the costs involved.

Questions

1. Why were CHAN and the crane operators convicted of corruption offences?
2. Are customary/trade practices excuses for the crane operators to take advantages on the subcontractors?
3. What are the possible costs of corruption?
4. Should the resident engineer report any suspected corruption to the ICAC

if he only has suspicion and do not have any evidence?