Case Studies

Our case studies contain analysis and discussion points for users to better understand the legal provisions. They also provide suggestions on how to prevent corruption, fraud and malpractices.

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All Areas of Concern

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All Areas of Concern

Jackson is a corporate financier.  On one occasion, he leads a team to arrange the takeover of Good Industrial by Frontline Group through the acquisition of 50% of its shares.   Although Jackson is holding a substantial quantity of stocks of Good Industrial, he does not disclose the situation to his company. Finally, Jackson makes handsome gains from his own Good Industrial’s stocks due to the success of the takeover.

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.




  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?


A large building project developed by a public body (PB), involving five residential blocks and a commercial complex with a car park, should be completed by April 2003.   The PB awarded the project to a main contractor CK Holdings Ltd (CK) in May 2001 at $1,800 million.   Central Architects and Engineers Ltd (CAE) was appointed by the PB as the project consultant.


There were a number of sub-contractors responsible for different aspects of work for this project.   Among them, CK sub-contracted all plastering works to Diamondhead Plastering Company and CHONG was its proprietor.


Being the project consultant, CAE was responsible for monitoring and supervising the workmanship and progress of work including that for CK and its various sub-contractors.   CAE had recruited a team of five residential site supervisory staff headed by a Clerks of Works (CoW) Martin.   All of them were public servants acting as an agent for the PB in the project.


CHONG, Martin and other site supervisory staff of CAE always had dinner together and played mahjong after work.   Being a habitual gambler, Martin was in great debt and often borrowed money from his relatives and friends.


CHONG also invited Martin to Shenzhen on several occasions to have lavish meals and attend nightclubs.   CHONG paid all the bills on these occasions.   Furthermore, CHONG sometimes offered Martin loans and chips in the casinos in Macau.   Martin considered CHONG treated him well solely on friendly basis.


Shortly  after  their  visits  to  Shenzhen  and  Macau,  CHONG  went  to Martin’s site office and suggested to adopt a quicker method for laying screed. Instead of using a thorough mixture of cement, sand, aggregate and water, CHONG proposed to adopt a ‘semi-dry sand’ method in which a layer of sand was put onto a layer of cement and thereafter water was sprayed onto the layers.   Although this shortcut method of laying screed was used in some other projects, it was not allowed in this project and it was clearly stipulated in the Specifications.   Thus, Martin immediately objected to the suggestion.


On the day before Winter Solstice, CHONG approached Martin again and pleaded for relaxation on the screeding method.   He indicated that the screeding work had been behind schedule and the liquidated damage for delay was heavy.   CHONG offered a laisee packet of $50,000 to Martin claiming that it was for the forthcoming Winter Solstice and requesting for ‘flexibility’ in acceptance of work completed.  He also demanded Martin not to be too stringent when inspecting the work.   He further indicated that since he had been treating Martin well for so long it should be time for Martin to do something in return.   Finally, Martin decided to accept the bribe, accede to CHONG’s request and connive at the shortcut screeding method.



CHONG and Martin were later arrested by the ICAC and were found guilty of offences under Section 4 of the Prevention of Bribery Ordinance (POBO).




  1. How did CHONG and Martin violate the POBO?
  2. What do you think about the over-socialisation between Martin and CHONG?
  1. Is customary practice, such as giving laisees during festivals (開工利是), a defence to accept an advantage? Why?
  1. Being a habitual gambler, what is the possible risk of Martin in respect of corruption?


The CEO of a pharmaceutical company offered company shares to Dr A for his assistance in writing a favorable report for a new drug…

Dr M, the Chief of Service of the Paediatric Department of a public hospital, has the approving authority for purchases not exceeding $100,000. His girlfriend Phoebe is a sales manager of a large medical equipment company.


Recently, David, the Department Operations Manager, recommended a replacement of a medical equipment and the sourcing was in progress. As Dr M knew that Phoebe was being pressured by her boss to secure more business for the company, he offered to help her.  After going through the quotations obtained by David, Dr M found that the price quoted by Phoebe was not the lowest.  He thus asked David to mark up the quotations of other companies so that he could secure the contract of the medical equipment to Phoebe’s company.   In order to please Dr M, David agreed to the proposal.

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