ICAC exposes landmark corruption case, prosecuting 23 individuals for embezzling HK$520 million in property management and maintenance sector

Insert picture: Grace Yee (left) and Bill Ng (right).

22nd September 2023 – (Hong Kong) Hong Kong’s Independent Commission Against Corruption (ICAC) uncovers a web of corruption involving a prominent property management and maintenance syndicate. The ICAC’s Principal Investigator Grace Yee announces the formal prosecution of 23 individuals on charges of conspiracy to commit bribery, graft, and fraud. The case marks the largest corruption scandal in the history of the city’s property management industry, with an estimated involvement of HK$520 million.

In a major crackdown operation, the ICAC executed a series of arrests targeting numerous individuals connected to an extensive network involved in corrupt practices within the property management and maintenance sector. Principal Investigator Grace Yee stated today (22nd) that after conducting a thorough investigation and seeking legal advice from the Department of Justice, 23 individuals were officially charged on the previous day (21st). The charges encompass allegations of conspiracy to commit bribery, graft, and fraud occurring between early 2018 and mid-2023. These illicit activities were linked to multiple large-scale repair projects and other engineering ventures across 10 residential and commercial properties, with a combined contract value of approximately HK$520 million. Individual contract amounts ranged from HK$460,000 to HK$120 million, and the total amount of bribery involved exceeded HK$6.5 million.

Yee stressed that in terms of the number of defendants, the total value of the projects implicated, and the amount of bribery funds involved, this case represents the largest prosecution ever undertaken by the ICAC in the realm of property management and maintenance. Among the accused, there are 21 men and 2 women, aged between 38 and 73. The group includes 12 intermediaries, 1 engineering consultant, 5 contracting firms, 3 members of property owners’ committees, and 2 property management staff members. They face a total of 11 charges relating to conspiring to offer benefits to agents, conspiring to cause agents to accept benefits, and conspiring to commit fraud. Yee believes that three of the intermediaries were key figures within the corruption syndicate, facing a total of 9 charges, with involvement in 8 major repair projects in large residential complexes.

Yee further disclosed that the case encompasses 10 different projects, consisting of 8 residential buildings or housing estates and 2 commercial buildings or shopping malls. The contracts involved a wide range of scopes, including major repair works, air conditioning installations, elevator engineering, engineering consultancy agreements, and property management contracts. The implicated buildings span across Hong Kong Island, Kowloon, the New Territories, and even outlying islands, underscoring the extensive reach of the corrupt syndicate.

ICAC Chief Investigator Bill Ng Siu-kei revealed that intermediaries and contracting firms involved in the case provided bribes to multiple members of property owners’ committees, property management staff, and engineering consultants, in order to influence various aspects of building management and maintenance. These corrupt practices influenced processes such as bidding procedures for major repair projects, elevator shaft engineering, and the disbursement of mid-term fees for projects.

Ng highlighted the first case, which involved a private residential building. Three intermediaries are accused of bribing the chairman and several staff members of the property owners’ committee, in exchange for securing a HK$20 million major repair project and property management contract. The amount involved in the bribery reached a staggering HK$2 million. In another case, a private housing estate saw the involvement of five intermediaries who allegedly provided a collective sum of HK$320,000 to a property management company, securing a HK$15.9 million major repair project.

The final case revolves around a commercial building’s elevator optimization project. The five defendants, including intermediaries, engineering consultants, and contracting firms, are charged with conspiring to defraud members of the building’s owners’ committee. Their objective was to manipulate the tendering process, excluding other competitors, in return for securing a HK$3 million elevator optimization project.

The prosecution of these 23 individuals unveils a deeply entrenched culture of corruption within Hong Kong’s property management and maintenance sector. The ICAC’s relentless efforts in combating corruption continue to expose and dismantle such criminal networks, signalling a commitment to upholding integrity and transparency in the city’s business landscape.