The long-running saga involving architecture firm RMJM took a new twist over the weekend when a group of 25 former employers approached Legislative Councillor Lee Cheuk-yan to help them in their pursuit of HK$3 million in unpaid wages.
Trouble at the Hong Kong arm of what was once one of the world's largest architecture practices began to surface in 2010 with reports of unpaid wages and bills to suppliers and contractors. There were similar reports from its offices elsewhere in Asia, Europe, the United States and the Middle East.
Controlled by millionaire Scotsman Fraser Morrison, RMJM had previously enjoyed an excellent reputation for its work on buildings such as the new Scottish Parliament Building and the Beijing Olympic Green Convention Centre.
It had more than 1,200 employees worldwide at its peak. But its reputation has been tainted by poor management and financial distress, and today the firm has been reduced to about 60 staff worldwide, with about 10 in Hong Kong.
The Hong Kong group of 25, according to its spokesman, former marketing director Liliana Silva, approached Lee because it was concerned that although nearly all members of the group had won a Labour Tribunal hearing, they had yet to receive the money owed by RMJM.
The Labour Department appears to have done little to pursue the company even though, according to the Employment Ordinance, failure to pay wages and failure to comply with a tribunal order constitute a criminal offence. Pursuant to section 43P of the ordinance (Cap. 57), the firm may be liable on conviction to a fine of up to HK$350,000 and imprisonment for up to three years. Individual managers who knew or ought to have known about the tribunal's orders are also liable to prosecution.
The Labour Department has been receiving complaints about RMJM relating to unpaid wages since at least 2010 but has yet to take any action. Silva told Lai See that about 100 cases for unpaid wages went to the Labour Tribunal last year, of which 50 were related to the company.
In addition, RMJM failed to make the mandatory contributions to the Mandatory Provident Fund, a claim that is being investigated by the MPF Authority.
The company's Hong Kong arm also faces four winding-up orders, which were filed separately by a former employee, graphic designers Dutton Bray, Fuji Xerox and the firm that fitted out RMJM's offices in June last year, which the firm has recently vacated.
The former employees are also concerned by another development that they think threatens both their and other creditors' chances of receiving payment. Silva told Lai See that another company, RMJM Global, was registered in Hong Kong in November last year. The concern is that assets will be transferred to the new company along with any new payments, and RMJM Hong Kong, the firm that owes money to the employees and the suppliers, will be allowed to go bust. This, according to Silva, is a ploy the company has used elsewhere in its troubled organisation.
The phone at the company's offices in Hong Kong appears to be permanently engaged and Nick Haston, managing director of RMJM Hong Kong, did not respond to messages left on his mobile phone.
Four years ago, Asia was the place-to-be for the ambitious investment banker. Now that's all changed, according to efinancialcareers. The website quotes Jeanne Branthover, the New York-based head of Boyden Global Executive Search's global financial services practice, as saying: "People are calling me every day from Hong Kong and Singapore and saying they want to move back to Wall Street."
According to Branthover, 2014 will be all about recruiting for the North American market. "We've just had our weekly call with our consultants all around the world and everyone's in agreement that their clients are either pushing into the [United States] or growing what they have here already," she told the website.
Emerging markets are apparently seen to be deflating, and there is concern over China's economic growth and the stability of its financial system. Things are not that great in Europe, with investment banking fees at their lowest level in 10 years in January.
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