ICAC acts on catering trade kickbacks
47 suspects arrested in food and beverage industry's bribes-for-business scam
Anti-graft officers have arrested 47 people over an alleged bribes-for-business scam in the food and beverage industry involving more than HK$1 million.
The Independent Commission Against Corruption says the scam is believed to have been operated for two to three years by a group of cooks, buyers and food suppliers. It allegedly involved seven hotels, nine restaurants and cafes, four private clubs and the food section of a department store.
Acting chief investigator Diana Pang Wai-sum said the arrests came after an operation codenamed Chained Horses, launched after a complaint last year. 'The investigation is still in progress and we cannot rule out the possibility of more arrests in the future,' Ms Pang said.
Among the 47 arrested on Sunday and Monday were 22 buyers and chefs, 21 food suppliers and four others who allegedly assisted in accepting bribes, such as by lending out their bank accounts. The 39 men and eight women have been released on bail without any charges being laid.
The suppliers are alleged to have offered cooks and food buyers sums ranging from HK$100 to more than HK$10,000 in the form of cash, loans or bank transfers in return for orders.
Ms Pang said: 'The business included the buying of fresh and dried seafood, fruits, frozen meats, poultry and Japanese foods.
The corrupt practice was facilitated by the use of bogus purchasing orders and invoices, with most of the payment amounts and quantities being inflated.
'Cooks and buyers had allegedly accepted these bogus invoices and issued false purchasing orders to deceive their employers. Such corruption severely damages the reputation and competence of the catering industry.'
She said keen competition in the industry could have been one of the causes of the alleged scam.
Principal investigator Ng Ping-kwok said there had been a long-standing culture of giving out 'lai see' in the industry.
He said: 'Lucky money will be given to employees during Chinese festivals, but it does not constitute any bribery offence as long as the employers acknowledge such gifts.
'It is an offence to accept this kind of advantage without the employer's consent.
'Employers suffer as a result of the present corruption scam because they have paid out more for each purchase of goods. If the cost increases, consumers will then have to pay higher prices for food.'
He said the beverage businesses had been provided with guidelines on the prevention of bribery.
Investigators found that the suspects held positions such as executive chef and purchasing officer, and that the scams involved buying food supplies ranging 'from a chicken to abalone'.
He said the ICAC had received 30 complaints between January and April this year of bribery in the catering industry, compared with 53 complaints for the whole of last year.
David Ng Tak-leung, the founder and consultant of the Hong Kong Federation of Restaurants and Related Trades, said it was historically uncommon for so many people to be found to be involved in a scam in the industry.
'The more people are involved, the higher the risk of being found out,' he told Cable TV.