Ex-manager of beverage company charged by ICAC gets 33 months’ jail for concealing conflicting interest in $1.9m ads, crime proceeds confiscated

A former marketing manager of a beverage company, charged by the ICAC and convicted after trial, was sentenced to 33 months’ imprisonment today (June 10) at the District Court for deceiving the company into awarding various outdoor advertisement purchase orders worth totalling about $1.9 million by concealing his control of a vendor, and conspiring with a subordinate to use false quotations and inspection reports to mislead the company. The convicted defendant was confiscated $600,000 in crime proceeds.

Chan Wing-fung, 41, former manager of marketing department of Vitasoy International Holdings Limited (Vitasoy), was earlier found guilty after trial of three charges – two of conspiracy for agents to use documents with intent to deceive his principal, contrary to section 9(3) of the Prevention of Bribery Ordinance and section 159A of the Crimes Ordinance; and one of fraud, contrary to section 16A of the Theft Ordinance.

In sentencing, Deputy Judge Ms Ivy Chui Yee-mei reprimanded Chan for committing a premeditated crime and intentionally failing to declare his conflict of interest to the company. The Judge added that in the present case which spanned over three and a half years, Chan immediately undermined company interest for personal gain of over $600,000, warranting a custodial sentence.

The Judge today allowed the prosecution’s application in relation to one of the charges and ordered to confiscate crime proceeds of $600,000 of Chan, being the profits he made in the present case. Chan was ordered to satisfy the confiscation order within six months, failing which he will have to serve an additional term of imprisonment of 19 months.

Co-defendant Keung Tze-ping, 50, former outdoor visibility officer of marketing department of Vitasoy, earlier pleaded guilty to the two counts of conspiracy for agents to use documents with intent to deceive her principal. She was today given a jail term of nine months, suspended for two years.

Among other duties at the material time, Chan was responsible for approving the engagement of vendors for the merchandising team and outdoor advertising team of Vitasoy’s marketing department while Keung would assist Chan to obtain quotations from vendors. They were required to obtain at least two or three quotations, subject to the amount of a procurement exercise involved. As stipulated in the staff handbook of Vitasoy, all staff members were required to disclose any possible conflict of interest to Vitasoy and seek permission in writing prior to participating in any business which would possibly cause a conflict of interest.

The ICAC investigation arose from a corruption complaint filed by Vitasoy following an internal audit conducted by the company. Enquiries revealed that in January 2016, Chan instructed his girlfriend to establish Why Creative Graphic Design House (Why Creative) to take up the orders from Vitasoy. Chan had never declared to Vitasoy his interest in Why Creative despite the fact that Why Creative was controlled by him.

Between January 2016 and early October 2019, Chan awarded 39 outdoor advertisement purchase orders of Vitasoy which worth totalling about $1.9 million to Why Creative. Chan’s girlfriend transferred 40 per cent of the profit totalling over $600,000 to Chan according to their agreement.

The court also heard that Chan had approved to pay a monthly fee of $36,000 to a vendor without the authorisation of his supervisor, falsely claiming that that the inspections were arranged on Vitasoy’s outdoor advertisements.

When being asked by Vitasoy to submit the relevant quotations of the three vendors, including Why Creative, and the inspection reports, Chan conspired with subordinates, including Keung, to forge 30 sets of quotation documents purportedly issued by four vendors for Vitasoy’s examination, so as to mislead the company that the procurements had complied with the relevant policy. Meanwhile, they fabricated 38 sets of outdoor advertisement inspection reports to mislead Vitasoy that inspections were completed by the relevant vendor.

ICAC investigation revealed that the four vendors had never issued the quotations concerned and the relevant vendor had not conducted the inspections mentioned in the inspection reports.

Vitasoy has rendered full assistance to the ICAC during its investigation into the case.

The prosecution was today represented by prosecuting counsel Sabrina See, assisted by ICAC officer Leo Fung.