Competition Commission and ICAC joint operation leads to arrest of 20 individuals in bust of construction corruption and bid-rigging syndicate

394

18th April 2024 – (Hong Kong) The Competition Commission and the Independent Commission Against Corruption (ICAC) joined forces to dismantle a burgeoning syndicate involved in corruption and bid-rigging schemes within the construction industry in the past 2 days. Approximately 40 locations, including offices of multiple construction contractors, consulting firms, and property management companies, as well as residences of individuals implicated in the case, were subjected to searches. Numerous pieces of evidence, such as computers, mobile phones, and bid-related documents pertaining to building maintenance projects, were seized. This relentless operation resulted in the apprehension of 20 individuals, comprising 17 men and 3 women, aged between 36 and 70. Among those arrested were key figures and core members of the syndicate, including representatives from construction contractors, engineering consultants, intermediaries, members of property owners’ incorporated owners corporations, and personnel from property management companies.

During the operation, the Competition Commission exercised its enforcement powers, which encompassed the execution of search warrants and the requisition of documents and information from relevant parties. However, some individuals refused to cooperate and obstructed the investigation by withholding requested information. Such actions constitute criminal offenses under the Competition Ordinance, and the Competition Commission will pursue appropriate actions against those involved. The ICAC’s investigation exposed allegations of bribery, corruption, and anti-competitive practices perpetrated by the implicated companies and individuals. These acts were carried out to manipulate the bidding process for building maintenance projects, artificially inflating project costs. The syndicate colluded with favored contractors to secure engineering and consultancy contracts, while exerting control over the supervision of maintenance works and the disbursement of project funds. Their activities contravene the Prevention of Bribery Ordinance and the “First Conduct Rule” outlined in the Competition Ordinance.

The operation encompassed two residential estates and mixed-use buildings located on Hong Kong Island, as well as multiple maintenance projects within four residential estates and industrial buildings in the New Territories. The total value of the contracts involved is estimated at approximately HK$180 million, with individual contract amounts ranging from millions to tens of millions of Hong Kong dollars. Suspicious transactions exceeding HK$1 million were identified in relation to specific project contracts. It is worth noting that half of the implicated maintenance project contracts were still pending approval, while the remaining projects had commenced prior to the initiation of investigations by the Competition Commission and ICAC.