Under Section 9 of the Prevention of Bribery Ordinance (POBO), it would be an offence for Mr Wong (an employee), without the approval of his employer, to accept advantages (i.e. RMB575,000 illegal kickback from the two manufacturers) for placing more production orders with the two manufacturers. The offeror of the bribe would also be guilty of the offence. It shall be an offence under POBO if any act of bribery (includes promising, agreeing, soliciting or accepting advantages without permission) takes place in Hong Kong. By depositing the bribe money back into the bank account in Hong Kong, Mr. Wong might still violate the POBO. 

Mr Wong’s close relationship with the manufacturers had affected his objectivity when discharging his official duties. Though entertainment is an acceptable form of business behaviour, many past cases have shown that small favours such as free meals and small gifts etc. always breed corruption. It is therefore important for business manager to remind their staff of the need to handle their relationships with care, and to avoid accepting excessively frequent or lavish entertainment from them. 

Furthermore, business organisations should also establish clear policies on acceptance of advantage and declaration of conflicts of interest, and inform their suppliers or subcontractors of such policies. In the event that staff have violated the law or company policies, prompt action should be taken to report the case immediately.

In this case study, the project manager, an employee (agent) of the bank (the principal), accepted an advantage from the Mainland contractor, as a reward for making a recommendation to the bank’s head office in Hong Kong to accept the contractor's substandard works and employ the same contractor to renovate other branches (an act in relation to the bank’s business and took place in Hong Kong), might contravene Section 9(1) of the Prevention of Bribery Ordinance (POBO). The Mainland contractor might also contravene Section 9(2) of the POBO for offering bribes. If any part of the act of bribery (including offering, soliciting or accepting a bribe) takes place in Hong Kong, it may still be pursued by the ICAC under the POBO. 

Procurement of goods and services is one of the most corruption-prone business processes, in particular those involving high values or specialist knowledge and specialised products or services, e.g. renovation and maintenance works. 

It is common for banks to send staff members to work in the Mainland office. The staff members are exposed to significant risk of temptation due to their perceived remoteness from the main office in Hong Kong and the absence of supervisory control measures. Relying on a single staff member, who is a specialist, without effective checks and balances and segregation of duties, also increases the corruption risk. 

Banks should lay down guidelines for key procurement stages. They should also assign supervisors to conduct site inspections to ensure compliance with the laid down guidelines and to detect malpractice, such as connivance of substandard performance of contractors. It is also important to circulate the staff code of conduct regularly to remind staff members to refrain from accepting frequent/lavish entertainment from contractors/suppliers which may otherwise affect one’s objective commercial judgment. In addition, it is also advisable to communicate to suppliers/contractors, in particular non-local ones, on the bank’s policy regarding anti-bribery, acceptance of advantages/entertainment, zero tolerance to corruption and channel(s) for feedback/enquiry.

By soliciting an advantage and leaking the quotation information to Mr Ho, Mr Lee might have committed an offence under Section 9 of the Prevention of Bribery Ordinance. Meanwhile, Mr Ho might also have committed an offence by offering bribes. The section (Section 9) states that: 

• an agent (normally an employee) solicits or accepts an advantage without the permission of his principal (normally the employer) when conducting his principal’s affairs or business commits an offence; and 
• the person who offers the advantage also commits an offence. 

A company should establish a good quotation and tendering system to enable the selection of the best contractor for the job required. A good quotation/tendering system should prevent tender and quotation information from leakage. Quotations or tenders received should not be opened before the deadline to reduce the likelihood of information leakage. Furthermore, the opening of the tenders and quotations should be carried out by at least two persons to prevent tampering with the prices submitted