17 arrested over fake lock scam

The ICAC has arrested the chairman and managing director of a publicly listed company for their alleged involvement in a racket to supply $50 million worth of counterfeit locks for Housing Authority projects.

Fifteen others were arrested in yesterday's operation, among them a government architect attached to the Housing Department's design and standards section.

Four directors and four employees of the listed company's subsidiary were detained. The remaining six were two Japanese agents, two of their employees, a transportation worker and another Housing Authority-approved supplier.

The Independent Commission Against Corruption said last night that 12 of the 17 arrested were still being held. The rest had been released on bail.

The investigation began after the ICAC received a complaint alleging that some Housing Department staff had accepted advantages to help unapproved lock suppliers become approved contractors.

The ICAC seized about 100,000 counterfeit locks at a three-storey godown in Aberdeen owned by the listed company. The fake locks cost half as much to make as real ones with the Housing Authority paying about $200 for each lock.

At the ICAC's request, Guangdong Public Security Bureau officers yesterday searched a factory in Dongguan which made the counterfeit locks and found more.

It is estimated that the publicly listed company's subsidiary supplied $50 million worth of locks for Housing Authority projects from 1997 to 1999.

About a year after the listed company's subsidiary was included on the approved list, the original Japanese manufacturer was declared bankrupt and stopped producing the locks. ICAC inquiries revealed that the listed company's subsidiary then manufactured its own locks at a mainland factory and re-packed them under the original Japanese brand name at a godown in Aberdeen.

Two agents of the original Japanese manufacturer had set up their own company in Hong Kong and allegedly issued certificates to falsely certify the locks were manufactured in Japan, the ICAC said.