Bid-rigging scheme: Hong Kong judge jails renovation subcontractor, calls for more industry regulation

He urges city’s government to set up a statutory body following first case involving building irregularities to be successfully prosecuted in recent years

PUBLISHED : Thursday, 29 September, 2016, 5:14pm
UPDATED : Friday, 30 September, 2016, 1:51am

A judge yesterday urged the government to set up a statutory body to regulate building renovation, as he sentenced a subcontractor to 35 months in jail for a rigged HK$260 million bill project that has alarmed Hong Kong’s homeowners.

District Court judge Josiah Lam Wai-kuen made the remarks after he passed the sentence on Yau Shui-tin, who blew the whistle on the bid-rigging project in Sha Tin’s Garden Vista that he helped arranged, resulting in at least HK$45 million being paid out.

This is the first case involving building management irregularities that has been successfully prosecuted in recent years, amid a string of bid-rigging allegations across the city in which contractors usually pay companies to select them for the bids.

Lam noted that the government had been promoting building renovation and providing relevant subsidies, but the lack of regulation was being exploited by criminals.

Though the “Smart Tender” building rehabilitation facilitating services pilot scheme by the Urban Renewal Authority provided professional opinion to applicants, Lam, who said he was speaking in the capacity of a home-owner, noted that the scheme had limitations.

He therefore suggested: “However it would be called… a statutory body should be set up for regulation.”

He suggested that the body should have the power to investigate complaints and provide the professional opinion, which as project quotations, home-owners need.

Yau, 57, was put behind bars following his guilty plea last year to four counts of conspiracy to offer an advantage to an agent between 2005 and last year in two Sha Tin housing projects.

Sentencing Yau, Lam said: “Due to the [eliminated] competition, the bid winner would ratchet up the price in order to pay benefits to middlemen and participants involved.”

The court previously heard Yau admitted attending a meeting with his co-conspiractors after being approached by Synergis Management Services’ property manager Hui Kwan-pik in 2010 and coming into contact with Chung Wai-keung, a shareholder of T. S. Tam Architects.

During the meeting, it was agreed that dummy bidders would be set up to disguise the preset victory of director Wong Chi-kwong’s Wong Pun and Partners consultancy and director Yeung Wing-sun’s engineering firm Hong Dau Construction.

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In return, 10 per cent, 6 per cent and 1 per cent of the estate’s renovation fee would be paid to Lai Kwok-leung, chairman of Garden Vista’s incorporated owners; Fan Cheuk-hung, then executive director of management firm Synergis Holdings; and Hui Kwan-pik, Synergis Management Services’ property manager, respectively. All six, plus Yau, took part in the Sau Mau Ping meeting.

Mitigating for Yau, solicitor Paul Kwong Wai-chuen asked the court to consider the Yau’s active bid to unearth the bid-rigging plots by giving himself in. He once divulged bid-rigging details to the Post.

The court heard that some others had been arrested by the graft-buster, though they had yet to be brought before the court.

Outside court, residents of Garden Vista Chan Kam-tong called for the ICAC to take action against other potential conspirators.

Newly elected lawmaker Lam Cheuk-ting of the Property Owners Anti-Bid Rigging Alliance, which had also been pushing for a regulator, said he had already written a letter to Chief Secretary Carrie Lam Cheng Yuet-ngor for a meeting to discuss proposals.

A spokesman of the Competition Commission said the prosecution drove home a message that all should steered clear of manipulation practices, adding that it would work with ICAC and police.