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.

It might seem that Bill was being clever, but actually he was being foolish. He committed a criminal offence of fraud under the Theft Ordinance and seriously undermined professional ethics by disregarding the interests of his clients. 

Bill’s unethical behaviour breached the Code of Ethics promulgated by the Estate Agents Authority. 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. 

On the other hand, the management of the estate agency showed zero tolerance for such malpractices by treating Anna’s complaint seriously and taking action against Bill’s unethical and illegal behaviour. Its integrity management enabled staff to understand clearly the ethical standards the company required of them and whistle-blow any misconduct in confidence. This could deter staff from further unethical behaviour. It could also attract and help retain ethical employees, thus helping the company to earn greater profits and goodwill in a long run.

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 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.

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.

Ronald had become entangled in debt and deliberately used his own consultancy firm to embezzle commission due to his employer. Under Section 9(3) of the Prevention of Bribery Ordinance (POBO), it is an offence for any agent to use false/ erroneous/ defective receipt/ account/ other document with the intent to deceive his principal. Ronald wilfully used a false document with intent to mislead the estate agency about Ms Yeung’s transaction. He might violate Section 9(3) of the POBO. 

Ronald was disloyal to his employer. He defied the law out of greed and ruined his own future. 

As a licensed estate agent, Ronald might also breach 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.

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.

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 Hong Kong, according to the Prevention of Bribery Ordinance (POBO), it is an offence for any agent (generally the employee), without the permission of his principal (generally the employer), to solicit or accept an advantage as a reward for doing an act on relation to his principal’s business. Moreover, if any part of the bribery act takes place in Hong Kong, it shall still be an offence under the POBO. Although Chung was one of the shareholders of the enterprise, he was still an agent as defined by the law. He therefore must seek approval from the company before accepting any advantages. 

Business organisations should take the initiative to govern the acceptance of advantages by all levels of staff (including directors) in relation to company businesses. The company should state clearly amounts of advantage that the staff are permitted to accept, and conditions of such acceptance. The policy should also list out the declaration procedures and enquiry channels for staff compliance. 

Moreover, the company should establish detailed procurement procedures in order to ensure that the products purchased are of good quality and to prevent staff from abusing their authority or engaging in corrupt practices in the purchasing process. Staff should be reminded constantly of the importance of selecting suppliers in a fair and impartial manner.

Facing keen competition in the industry and pressure to secure loan business in the bank, a bank staff may cross the line. Over reliance on sales staff to provide borrowers’ information without counter checks would increase the risk of manipulation. 

The Sales Executive, an employee (agent) of the finance company (the principal), intended to deceive/mislead the company by using invoices which contained false information. Notwithstanding he did not receive any bribes, he might have contravened Section 9(3) of the Prevention of Bribery Ordinance (POBO). 

The Sales Executive, machine supplier and SME owners could be charged with fraud against the finance company, or conspiracy to defraud the finance company. 

The Sales Executive rationalized his acts by regarding his practice as helping the finance company to secure more loan business, at the same time helping the SMEs to overcome difficult situations. However, the fact that customers had to obtain higher loans through a fraudulent means suggested that they are high risk customers. Granting them higher loans increased the risk exposure of the finance company. 

Approving a higher loan based on inflated collateral value or bogus transactions might also result in an unusual increase in bad debt cases, and internal review by the finance company would detect the irregularity involved. 

Banks should adopt good control practices such as setting up a central team to conduct vigilant due diligence on high credit risk customers, conducting independent assessment of machine suppliers involved in HP transactions to ascertain their reliability, gauging reasonableness of the sales prices on invoice, and conducting regular assurance check to detect irregularities/unusual trend.