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Subcontractor jailed in Hong Kong’s first ever conviction for bid-rigging in building repair works

A subcontractor has been sentenced to 35 months in jail for offering bribes to the secure renovation contracts for two residential estates in Shatin – the first conviction for the crime in Hong Kong.

Former engineering firm proprietor Yau Shui-tin, 57, earlier pleaded guilty to four charges of conspiracy to offer advantages to an agent, Mingpao reported. Yau said he worked for a tender-rigging syndicate as a middleman to acquire information for securing consultancy and renovation contracts at Garden Vista and Ravana Garden in Shatin.

Bid-rigging is a process in which competitors decide among themselves who will win the tender, and manipulate the bidding exercise accordingly. Bid-rigging in building repair works is a persistent problem, but the government has not been able to effectively combat the crime due to legal loopholes and a lack of precedent.

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Yau Shui-tin. Photo: Apple Daily.

The award for Garden Vista’s renovation contract, which was approved at an incorporated owners’ meeting in 2010, amounted to HK$260 million. Homeowners in the estate protested that the award was unreasonably high.

In October last year, Yau admitted that he had offered over HK$45 million in bribes to three persons involved in the bid for Garden Vista: Lai Kwok-leung, the chairman of Garden Vista’s incorporated owners, Hui Kwan-pik of Synergis Management Services and Fan Cheuk-hung of Synergis Holdings. Lai, Hui and Fan were arrested in March last year, but have not been prosecuted.

Yau also offered HK$600,000 to Ravana Garden’s maintenance working group member Ho Chi-kwong.

Kickbacks

In return, the subcontractor was guaranteed HK$1.31 million and HK$200,000 for the two tendering exercises.

On Thursday, District Court Judge Josiah Lam ordered Yau to return HK$50,000 in bribes to Garden Vista’s incorporated owners and HK$200,000 to Ravana Garden’s incorporated owners within a period of 30 months.

Yau’s lawyer pleaded in mitigation that Yau had reported himself to the police, and helped raise public awareness of the issue by revealing the bidding process to the court.

But Judge Lam said that Yau was not motivated solely by a sense of justice; rather, Yau wanted to pressure those in the bid-rigging syndicate who had not yet paid Yau the promised awards. The judge made the statement based on the fact that Yau did not name the conspirators who had paid him to the Independent Commission Against Corruption.

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Homeowners protested against bid rigging practices. File Photo: Apple Daily.

A ‘painful victory’

Lam Cheuk-ting, Democratic Party lawmaker-elect and former anti-graft investigator, told HKFP that the ruling was a “painful victory” for small homeowners, whose payments for the repairs works would not be easily retrievable.

But the conviction also marked an “important step” in eradicating tender rigging practices, as it set a precedent and raised public awareness on the issue, Lam said.

Lam, who has advocated anti-bid-rigging measures for four years, urged the government to set up an oversight body to supervise the industry. He added that high-profile operations to combat tender rigging would have a deterrent effect.

Before Thursday’s sentencing, Yau had been detained for nine months.

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Garden Vista. Photo: Wikicommons.

Garden Vista’s repair works are still in progress, with homeowners having contributed about 70 per cent of the HK$260 million awards.

Subcontractor jailed in Hong Kong's first ever conviction for bid-rigging in building repair works