Clement had been entrusted with handling the village-type house development project and should have cherished the opportunity to show his abilities. Unfortunately, his gambling habit led him to personal finance problems. Driven into a corner, he conspired with Mr Shum to deceive Mr Lai’s company and abused his employer’s trust in him. Clement knew very well that the $500,000 solicited by Mr Lai was not for donation purpose. By using a false receipt to deceive his principal Mr Lai, Clement might be in breach of Section 9(3) of the Prevention of Bribery Ordinance. Mr Shum might also commit a deception offence under the Theft Ordinance for falsely represented himself to Mr Lai as a village representative. 

As Clement and Mr Shum had business dealings, socialising might have been unavoidable. But Clement should have kept a suitable distance from Mr Shum and, above all, should not have had any pecuniary associations so that he would not have to show favouritism, or to get caught in a work dilemma where it was difficult to stay neutral, or to do illegal acts for personal gain. He should avoid engaging in frequent gambling activities with his clients to avoid involving in any monetary dealings that might lead to conflict of interest situation. 

Clement would also breach the Code of Ethics promulgated by the Estate Agents Authority for engaging in illegal activities and bringing discredit and/or disrepute to the estate agency trade. His failure to observe and comply with the law and the Code of Ethics might render him not being a fit and proper person under the Estate Agents Ordinance to hold license and disciplinary action might be taken against him.

As a licensed estate agent, Timmy should observe the Code of Ethics of the Estate Agents Authority. Estate Agents and salespersons, in engaging and accepting an appointment as an agent, should protect and promote the interests of their clients, carry out the instructions of their clients in accordance with the estate agency agreement and act in an impartial and just manner to all parties involved in the transaction. Also, they should avoid accepting an appointment involving a property in which they have a beneficial interest. Any pecuniary or other beneficial interests in relation to the property shall be disclosed fully to all parties concerned. 

Timmy’s dishonest behaviour not only caused loss to Mrs Chung and Ms Lam but also tarnished the reputation of the trade. Timmy’s conduct might constitute a criminal offence of fraud under Section 16A of the Theft Ordinance.

Under 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 interest or business. 

Gordon privately accepted a reward of $150,000 from his relative Johnny without the permission of his principals (namely the estate agency and Mr Yu). Hence, he might commit the offence of accepting a bribe under Section 9 of the POBO. Johnny might also commit an offence by offering a bribe. 

Gordon and Johnny were relatives. Gordon should have declared this conflict of interest to the estate agency and Mr Yu. 

When handling a transaction involving a relative and a client, Gordon should have remained neutral. Instead, he favoured his relative, resulting in loss to both Mr Yu and Mr Pau, the other buyer. Although Mr Yu had set a minimum average transaction price per square foot, Gordon should have tried to obtain the best possible price for the seller according to market conditions. Mr Pau had to acquire units at a higher price because of Gordon’s corrupt act. 

Gordon’s behavior might also violate the Code of Ethics of the Estate Agents Authority which states clearly that estate agents or sales persons shall refrain from activities during the practice which may infringe the law. They shall provide services to clients with honesty, fidelity and integrity and protect and promote the interest of their clients, carry out the instruction of their clients in accordance with the estate agency agreement and act in an impartial and just manner to all parties involved in the transaction. Furthermore, any conflict of interest in relation to the property shall be disclosed to their clients that they are so acting.

Under Section 9 of the Prevention of Bribery Ordinance (POBO), it would be an offence for Mr Wong (an employee), without the approval of his employer, to accept advantages (i.e. RMB575,000 illegal kickback from the two manufacturers) for placing more production orders with the two manufacturers. The offeror of the bribe would also be guilty of the offence. It shall be an offence under POBO if any act of bribery (includes promising, agreeing, soliciting or accepting advantages without permission) takes place in Hong Kong. By depositing the bribe money back into the bank account in Hong Kong, Mr. Wong might still violate the POBO. 

Mr Wong’s close relationship with the manufacturers had affected his objectivity when discharging his official duties. Though entertainment is an acceptable form of business behaviour, many past cases have shown that small favours such as free meals and small gifts etc. always breed corruption. It is therefore important for business manager to remind their staff of the need to handle their relationships with care, and to avoid accepting excessively frequent or lavish entertainment from them. 

Furthermore, business organisations should also establish clear policies on acceptance of advantage and declaration of conflicts of interest, and inform their suppliers or subcontractors of such policies. In the event that staff have violated the law or company policies, prompt action should be taken to report the case immediately.

In this case, the relationship manager, an employee (agent) of the bank (the principal), without the permission of the bank, accepted monetary bonuses (advantages) from the acquainted client as a reward for his preferential service in managing the investment portfolio (an act in relation to the bank’s business). The relationship manager might violate Section 9(1) of the Prevention of Bribery Ordinance (POBO) for accepting bribes; whereas the acquainted client might contravene Section 9(2) of the POBO for offering bribes. 

The personal relationship between the relationship manager and the acquainted client would give rise to conflict of interest, which was conducive to favouritism towards the customer, e.g. providing first priority in the investment portfolio management. 

To prevent corruption and malpractices, banks should enhance the awareness of integrity among staff members and promote ethical culture by: 

• disseminating a clear message by top management on commitment to business ethics and integrity, and zero-tolerance to unethical practices; 
• specifying the integrity standard expected of all staff members in a Code of Conduct, in particular, the restrictions on acceptance of advantages from bank customers, and the requirement for staff to declare and avoid conflict of interest. 

It is also necessary to conduct regular (induction, refresher) staff trainings on integrity and anti-corruption and to communicate with customers, including non-local customers, about the bank’s policies on anti-bribery and acceptance of advantages policy.