'One small step': Hong Kong residents of alleged bid-rigging estate see subcontractor's confession as winning pivot in war with management

A subcontractor's dramatic courtroom confession of bid-rigging at the Sha Tin estate marks a milestone in a heated two-year war with management

PUBLISHED : Thursday, 29 October, 2015, 12:00am
UPDATED : Thursday, 29 October, 2015, 4:50am

After two years of defiant campaigns, a group of Garden Vista residents tasted victory for the first time on Tuesday when they saw a contractor implicated in an alleged bid-rigging scandal affecting their home confess in court.

The group, formed by residents from all walks of life, had been taking to the streets in the middle-class Sha Tin neighbourhood near Shek Mun almost weekly.

There, counters were set up and banners displayed as they warned fellow neighbours of a controversial renovation project amounting to HK$260 million taking place at their home.

They were angry because residents of some 1,100 flats in the six residential blocks each had to shoulder a sum of between HK$200,000 and HK$300,000, depending on the size of their flat.

The group said the figure was grossly inflated, although other residents backed the estate's incorporated owners, who said the group had been spreading misinformation.

Those who refused to pay faced an encumbrance order and annual interest rates of 18 per cent for late payments, leaving some defiant owners debt-laden.

Yesterday, renovation subcontractor Yau Shui-tin admitted that he had conspired with the chairman of Garden Vista's incorporated owners, Lai Kwok-leung; the then-executive director of the estate's management company Synergis Holdings, Fan Cheuk-hung and his colleague Hui Kwan-pik; the director of consultancy firm Wong Pun and Partners, Wong Chi-Kwong; the shareholder of T.S. Tam Architects, Chung Wai-keung; and the director of engineering company Hong Dau, Yeung Wing-sun.

READ MORE: HK$45m in bribes: Building sub-contractor admits role in bid-rigging plots at Hong Kong private housing estates

It was claimed Yau helped the consultancy and engineering firm secure the bid in question between 2010 and 2014.

Yau admitted at District Court that he conspired with them to offer Lai HK$26 million, Fan HK$15 million and Hui HK$2.6 million to seal deals.

Whether the parties concerned pocketed the proceeds remained unclear. No others, apart from Yau, were prosecuted.

"There is going to be a long way ahead, but at least, it was one small step," said Lee Ping-sum, a resident of the development for 25 years.

Lee added that much needed to be fixed. He said he wished to see greater transparency from the incorporated owners.

Commenced on November 2013, all works should have been finished within 420 days, according to the initial contract.

A recent site visit by the South China Morning Post, however, found that renovation was ongoing, with three of the six blocks still covered in scaffolding.

Some parts which apparently had been completed also raised questions, such as the work at the car park and the tiling work on the surface of the buildings.

Residents were also asked to chip in an extra HK$1 million for two more gurkha security guards and a project manager, to be deducted separately from their monthly management fees.

In minutes for a general meeting, it was said the contractor would be fined HK$5,000 per day for late completion, yet the expected end date had since been postponed to early next year.

The group alleged they had made enquiries, but rarely received replies from Lai and the Incorporated Owners.

Lai could not be reached for comment.

In minutes dated back to November 2013, however, he stressed that the bidding exercise had been transparent.

In addition to campaigning, the group also carried out its own investigations.

The residents found that, of the bidders, one was chaired by a person who was a director of one of the companies allegedly implicated in Yau's case.

That engineering firm, out of the 19 bidders, entered the highest bid, HK$396 million.

In June 2012, the Buildings Department introduced its mandatory building inspection scheme, covering all private buildings 30 years or older except those less than four storeys.

Under the scheme, owners are required to hire professionals to carry out safety inspections every 10 years.

The safety inspections proved one way that bid-rigging drew heightened public attention in recent years.

The Independent Commission Against Corruption said it received 494 corruption complaints regarding building maintenance and 698 regarding building management between 2013 and last year.

Lam Cheuk-ting, a Garden Vista resident as well as a former officer with the ICAC, serves as a spokesman of the Property Owners' Anti Bid-Rigging Alliance, formed in March last year.

"Bid-rigging effectively means that a group of people deliberately try to control a bidding exercise, such as by raising its price," Lam said.

At Garden Vista, the residents crossed swords with the parties concerned in several contentious court actions.

They ranged from the late payment interest rate and efforts to oust Lai to defamation charges laid against residents.

Inside the estate where residents accused the incorporated owners of a lack of transparency, posters were hung counter-accusing residents of spreading unfounded rumours.

Lam said the government afforded little protection to private residents. "They shouldn't be left fighting on their own," he said of residents' predicament.

"The government should pinpoint the problem quickly."

He said the Building Management Ordinance used a low threshold for taking action in that it only required 10 per cent of a private estate's owners to turn up at a meeting for a matter to be put to a vote.

Lam argued that the low threshold made it easy to carry out bid-rigging by proxy voting.

He also urged the government to set up a watchdog organisation to closely monitor contractors and renovation projects, while providing more information to private property owners and the public regarding the practice of bid-rigging.

"The government needs to step up its efforts in eradicating bid-rigging," the former ICAC officer added.

As for residents, a number contemplated the effectiveness of leaving Garden Vista.

"You still have to pay the fees first to lift the encumbrance order so that you can make your way out," said Fan, who was slapped with such an order for failure to pay in full.

She halted payments after shelling out 40 per cent of the HK$500,000 she was to pay for two flats. She said she now owed almost HK$100,000 in interest and legal costs.

Her neighbour Albert Lo pointed out an underlying problem that could hint at a rampant problem across the city.

He said one neighbour at Garden Vista had moved there from another housing estate in town to avoid a separate alleged bid-rigging scandal.

"So where can I move?" asked Lo rhetorically.