Offering advantages in return for confidential information

An estate agent gave ‘a token of thanks’ to a manager of a listed company who was responsible for property redevelopment for leaking out confidential information.

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Offering advantages in return for confidential information
Bribery
Professional Ethics
Others
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Mr To, a manager of a listed company, was responsible for acquiring properties for his company which engaged in property redevelopment. Through his work, Mr To became acquainted with an estate agent Tony who frequently treated Mr To lavish dinners and unconditionally lent him $50,000 to solve his financial difficulties. 

One night when they were having dinner, Mr To told Tony some confidential information about the acquisition plan of his listed company. As a token of his gratitude, Tony deposited $100,000 into Mr To’s bank account. Upon receiving the confidential information, Tony immediately arranged for his friends and relatives to rent and buy the premises that were to be acquired soon. Before long, the listed company announced its acquisition plan covering the premises acquired by Tony’s friends. Tony’s friends were granted compensation which were then shared among Tony and his friends. Tony’s scam eventually surfaced and the listed company stopped processing all compensation applications made by Tony’s friends.

Listed Companies
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Case Analysis

Under Section 9 of the Prevention of Bribery Ordinance (POBO), it would be an offence for Mr To (an employee), without the approval of his employer (the listed company) to accept advantage (i.e. $100,000 offered by Tony) as a reward for leaking out confidential information relating to the company’s property acquisition plan. He had also abused the trust placed on him by his employer for misusing the company’s information for personal gain. Tony might also violate POBO by offering bribes. 

Furthermore, according to the Code of Ethics of Estate Agents Authority, estate agents or salespersons shall refrain from activities during their practice which may infringe the law. They shall, in the course of business, provide services to clients with honesty, fidelity and integrity, and protect their clients against fraud, misrepresentation or any unethical practices in connection with real estate transactions. Tony had breached the Code of Ethics for offering bribes and engaging in fraudulent activities in deceiving compensation.

Case Studies

Bribery spoils fair play

A listed company exclusively authorised an estate agency to sell a factory building unit by tender. The estate agency manager and his subordinate were both offered “lai see” for showing favour to one of the tenderers.

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Bribery spoils fair play
Bribery
Professional Ethics
Sales and Marketing
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A listed company exclusively authorised an estate agency to sell a factory building unit by tender. Estate agency manager Mr Chan and his subordinate Jenny were responsible for tender matters. Jenny soon found a client, Mr Lai, who was willing to pay $19.6 million for the unit. 

Meanwhile, Sidney, the proprietor of a small estate agency, was facing intense competition and trying every means to gain business. Knowing that Mr Chan was responsible for the factory unit transaction, Sidney spared no effort in looking for a buyer. He also offered a $100,000 “lai see” to Mr Chan and Jenny to ensure that his client could successfully buy the property. In light of the advantage offered by Sidney and upon Mr Chan’s instructions, Jenny deliberately misled other prospective tenderers, including Mr Lai, into lowering their tender price or withdrawing. ICAC officers later arrested Sidney and Mr Chan in a restaurant where they were discussing how to hand over the bribe. Initially, Sidney denied making a corrupt deal with Mr Chan, but Mr Chan chose to co-operate with the ICAC and revealed everything.

Listed Companies
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Case Analysis

To protect the interests of investors, the listed company prohibited their agents or employees from abusing their official positions for personal gain. Mr Chan and Jenny were commissioned by the listed company to sell the property. They had to comply with the listed company’s policy on acceptance of advantages and were not allowed to solicit or accept any work-related advantage. Under the Section 9 of the Prevention of Bribery Ordinance (POBO), it is an offence for any agent, without the approval of his principal, to solicit or accept an advantage as a reward for or an inducement to perform an act in relation to his principal’s affairs or business. The offeror of the bribe shall also be guilty of the offence. Mr Chan and Jenny might commit an offence under Section 9 of POBO for accepting bribe. This went against the spirit of the tender system and also prejudiced the buyer’s interests. 

By attempting to secure business through corrupt means, Sidney’s action went against the spirit of fair competition and damaged the reputation of estate agency trade. He might also commit an offence under Section 9 of POBO for offering bribe. 

Furthermore, they all might have breached the Code of Ethics of the Estate Agents Authority which states that estate agents and salespersons shall refrain from activities during their practice which may infringe the law.

Case Studies
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