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 affairs or business. The offeror will also be guilty of the offence. 

In this case, the manager, an employee (agent) of the finance company (the principal), accepted commission (advantage) from the property developer as a reward for favourably recommending the loan proposal (an act in relation to the finance company’s business). Under the POBO, the manager was considered to have accepted the advantage even his wife received the advantage on his behalf. Hence, the manager might have contravened Section 9(1) of the POBO for accepting bribes. The property developer might have contravened Section 9(2) of the POBO for offering bribes. 

On the other hand, the manager might have breached Section 9(2) of the POBO for bribing the property valuer (agent of the property valuation agency) to inflate the value of the collateral, while the latter might have contravened Section 9(1) of the POBO for accepting bribes from the manager. They also might have contravened Section 9(3) by each submitting false, misleading valuation reports to their employers. 

The manager might have also breached the Banking Ordinance which prohibits any employee of an authorized institution to receive any gift, commission etc. for his own personal benefit or advantage or for that of any of his relatives, for procuring or endeavouring to procure for any person any advance, loan, financial guarantee or credit facility from that institution.

Soliciting bribes from overseas companies is also subject to prosecution 

Though the supplier, from which Mr Fong solicited bribes, was outside Hong Kong, Mr Fong might still commit an offence of soliciting an advantage under Section 9 of the Prevention of Bribery Ordinance (POBO) as he sent text messages requesting for loans to be deposited into his wife’s bank account in Hong Kong in return for placing more orders. 

Businesspersons should be aware that the POBO can apply when part of the corrupt act, e.g. promising, agreeing, soliciting or accepting advantages without permission, takes place in Hong Kong.

Accepting bribes, whether directly or indirectly, is against the law 

Loan is considered an advantage under the POBO. Accepting bribes regardless of whether the advantage is directly given to the acceptor or indirectly delivered to a third party is still against the law. In the case study, if the Mainland herbal supplier agreed to deposit the loans into Mr Fong’s wife’s bank account in Hong Kong, as long as it was proven that the receiving account was controlled by Mr Fong or that he was the ultimate beneficiary, Mr Fong would be considered as having accepted the advantage.

By soliciting an advantage and leaking the quotation information to Mr Ho, Mr Lee might have committed an offence under Section 9 of the Prevention of Bribery Ordinance. Meanwhile, Mr Ho might also have committed an offence by offering bribes. The section (Section 9) states that: 

• an agent (normally an employee) solicits or accepts an advantage without the permission of his principal (normally the employer) when conducting his principal’s affairs or business commits an offence; and 
• the person who offers the advantage also commits an offence. 

A company should establish a good quotation and tendering system to enable the selection of the best contractor for the job required. A good quotation/tendering system should prevent tender and quotation information from leakage. Quotations or tenders received should not be opened before the deadline to reduce the likelihood of information leakage. Furthermore, the opening of the tenders and quotations should be carried out by at least two persons to prevent tampering with the prices submitted

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 affairs or business. The offeror will also be guilty of the offence. Even if the acceptance of bribes takes place outside Hong Kong, if any part of the bribery act (including offering, soliciting or accepting a bribe) takes place in Hong Kong, the case can be pursued under the POBO. Furthermore, according to Section 11 of the POBO, as long as the offeror of bribes intends to induce the acceptor to extend his/her favour(s), both parties would have committed bribery offence even if the acceptor claims that he/she 'did not actually have the power to do so', 'did not intend to do so' or 'did not, in fact, do so'. Hence, Mr Lee might have committed the offence of offering bribes and could not claim in his defence that the purpose of the bribes had not been carried out. Similarly, if Mr Cheung had accepted the red packet without declaring it to the bank, he might also have committed an offence even if he had not ultimately helped Mr Lee. 

Entertainment means the provision of food and drink for immediate consumption, whereas dried seafood, spirits or red packets are advantages. The offeror cannot offer bribes in excuse of 'an established custom in the trade or 'trade practice'. According to Section 19 of the POBO, the court will not accept such defence on the part of either the offeror or the acceptor, but will only consider whether or not the acceptor has the permission of the principal. 

According to the guidelines laid down in the Supervisory Policy Manual — Code of Conduct (the Code) issued by the Hong Kong Monetary Authority, a bank employee must declare any advantage received in the course of business. While the acceptance of mere entertainment does not constitute an offence, entertainment that is in any way luxurious is very likely a prelude to corruption or bribery. Hence, the Code further stipulates that a bank employee can only accept normal business entertainment such as an ordinary meal. 

When facing corruption temptation, Mr Cheung should make a declaration in compliance with the Code and report the offering of gifts and red packets offered by Mr Lee to the bank in order to protect himself from being implicated in a bribery case.

Under the Prevention of Bribery Ordinance (POBO), the principal of a company is the entire Board of Directors, while individual shareholders or directors are considered as agents. In this case, Mr Chow was an 'agent' as he was one of the shareholders and the paid General Manager of the factory. Prior to any solicitation or acceptance of any advantage in the course of business, Mr Chow should have obtained permission from the Board of Directors.

The principal’s permission should be definite and given in advance in accordance with Section 9 of the POBO. Otherwise, the agent has to apply for permission as soon as reasonably practicable after the acceptance. In addition for such permission to be lawful, the principal must have carefully considered the application before granting permission. 

Mr Chow’s company had not stated clearly in advance whether or not its staff members could accept advantages in relation to their duties. During the investigation, Mr Chow claimed that he had notified other shareholders that the rebates concerned were used to cover the entertainment expenses incurred in Chinese Mainland. Nevertheless, he had, in fact, only casually brought this matter to the attention of just two of the shareholders. Furthermore, the arrangement had not been discussed at any board meeting or formally approved, and there was no record of the accepted rebates, nor how they were dealt with. As such, Mr Chow was considered not to have obtained the company’s permission to accept the rebate at the material time. Moreover, he had not applied for retrospective approval from his company, and his acceptance of the rebates was not known to and approved by all shareholders. Thus Mr Chow accepted the rebates without the principal’s permission. 

To protect the interest of the companies and their stakeholders, companies should take the initiative to formulate rules and regulations governing the acceptance of advantages by their board members and staff and to state clearly in writing the company’s stance and policy regarding acceptance of advantages, and entertainment. The procedures for declaring acceptance of advantages and the channels for making enquiries should also be laid down and made known to all staff.