Hong Kong water department employee accused of fraud now working under ICAC prosecution witness

A former director at the utility faced court on Monday over allegedly assisting two firms to procure contracts worth more than HK$420,000

PUBLISHED : Monday, 22 August, 2016, 4:38pm
UPDATED : Monday, 22 August, 2016, 9:35pm

The Water Supplies Department’s staffing arrangements came under question at Kowloon City Court on Monday after it was revealed that an inspector accused of misconduct and fraud was working in a similar role and under the supervision of a prosecution witness.

Luk Ka-lun, 52, an employee at the government department, pleaded not guilty on Monday to one count of misconduct in a public office and an alternative count of fraud.

The public servant is accused of dishonestly assisting two companies in securing purchase orders worth over HK$420,000 from the department.

The court heard that Luk had not been suspended from duties even after the Independent Commission Against Corruption (ICAC) laid charges against him on Thursday. He is currently working in another department as a Waterworks Inspector where he remains involved in procurement, and supervised by one of the prosecution’s 15 witnesses.

ICAC Investigator Lo In said the Water Supplies Department is well aware of the active investigation.

She added that Luk’s current position in the department there would be contact between the defendant and one of the prosecution’s witnesses.

Lo said that the allegations against Luk occurred prior to his new role and that the defendant would not have contact with the two companies involved in the case.

Principle magistrate Peter Law Tak-chuen was not satisfied with the decision.

“He is still allowed to work under the supervisor who will testify,” he said. “Are there only a few people at Water Supplies Department?”

“Don’t you think it sounds inappropriate? Aren’t you worried?” Law asked.

Lo said that prosecutors would ask the two employees not to discuss the case.

“We will ask them not to talk about the case,” Lo reiterated. “It would be a friendly reminder.”

Monday’s case arose from a corruption complaint referred to ICAC by the Water Supplies Department.

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Prosecutors alleged that Luk, who was then an Assistant Waterworks Director, engaged in misconduct in numerous procurement exercises between October 10, 2011 and December 6, 2012.

Department protocol demands that staff provide at least two quotations from different suppliers for procurements priced under HK$50,000, and to accept the lowest offer.

Luk is accused of dishonestly providing quotations from two companies – Peking Industrial and Trading Company, and Lee Wah Electrical Engineering Company – and falsely representing them as competitive quotations while knowing that they were owned and controlled by the same proprietor, Lo Chun-wah.

It is alleged that he concealed the two firms’ true ownership from the department and recommended staff to accept their offers on 14 occasions.

Alternatively, Luk has been accused of deceiving or intending to defraud the department with Lo Chun-wah, and inducing staff to place orders with the two companies, which resulted in the proprietor’s benefit or caused prejudice to the department.

Details of Lo Chun-wah’s involvement in the deception are yet to be revealed.

Luk has been released on bail and is expected to return to court on October 24 for a pretrial review.