HKSAR v. NG KAN WAI AND ANOTHER

DCCC 525/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 525 OF 2008

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Reasons for Sentence of D1

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Pleas and charges

1. D1 is convicted after trial of 2 charges (1^st and 3^rd Charges) of offering advantages to an agent, 1 charge (5^th Charge) of conspiracy for an agent to accept advantages, and 1 charge (6^th Charge) of conspiracy to offer advantages to an agent. 

2. In each charge, D1 was the employee of a meat supplier, Best Union Company and its associated companies (“BUC”), and the agent was the employee of a restaurant or restaurant group which placed order with BUC.   

3. The 1^st and the 3^rd Charges, offering advantages, related to the same supervisor of the Roasted Meat Section of Kamboat Chinese Cuisine Company Limited (“Kamboat”).  Kamboat operated a chain of Chinese restaurants.  The 1^st Charge related to the period between 1 August 2006 and 1 August 2007.  The 3^rd Charge related to the single date of 2 August 2007 and the specific sum of $21,360. 

4. The 5^th Charge, conspiracy for an agent to accept advantages, related to a supervisor of Roasted Meat Section of Hoi Tin Garden Restaurant (“Hoi Tin”) between 1 October 2006 and 2 August 2007. 

5. The 6^th Charge, conspiracy to offer advantages to an agent, related to a Senior Siu Mei Chief Cook of Café de Coral Holdings Limited (“Café de Coral”) between 1^st January 2007 and 30^th June 2007. 

Facts as found

6. D1 was a supervisor responsible for sales and other duties in BUC.  As authorized by his boss in all cases except one where his boss might not have known specifically, he paid bribes to agents of the restaurants so that they would either place orders for meat with BUC or raise no complaint about the quality of BUC’s meat.  Surveillance tapes captured his handing over of envelopes to the recipients on divers occasions.  From the debris of paper retrieved from the litter bin, documents which looked like monthly accounts of meat were found.  After his arrest, he made admissions in the VIR (i.e., Video-taped Interview Record between 3:35 pm and 4:40 pm on 2 August 2007) to the effect that the envelopes contained his bribes.    

Prosecution evidence

A.  Surveillance tapes

7. At 1513 hours on 29 May 2007, PW1 was in Golden City Seafood Restaurant with a hidden camcorder switched on [P30 tape].  At a table were seated D1, his wife, Au-Yeung Wai-keung, and another male.  D1 walked up to near Au-Yeung and put something into a red plastic bag near Au-Yeung.  Au-Yeung took the bag and left before the others. 

8. PW2 followed Au-Yeung up to Sheung Shui Railway Station.  On the Tsimshatsui east-bound platform, Au-Yeung took out a white paper to read.  After reading, he tore it up and discarded it into a rubbish bin.  Later PW2 went up to retrieve the torn paper [P4]. 

9. At 1951 hours on the same day, PW3 was in Sun Ming Yuen Seafood Restaurant with a hidden camcorder switched on [P31 tape].  At a table were seated D1 and Yeung Lit-wah.  Yeung showed D1 some documents. 

10. At 1327 hours on 21 June 2007, PW4 was in Hang Wan Kiu Restaurant with a hidden camcorder switched on [P32 tape].  At a table were seated D1 and Au-Yeung Wai-keung.  D1 gave a white envelope to Au-Yeung.     

11. At 1934 hours on 27 June 2007, PW5 was on the pavement outside Fanling KCR Station with a hidden camcorder switched on [P33 tape].  Yeung Lit-wah was loitering until he boarded a car driven by D1.  He got on board and chatted with D1 for a minute.  Yeung got off and D1 drove off. 

12. At 1535 hours on 10 July 2007, PW6 was in Hang Wan Kiu Restaurant with a hidden camcorder switched on [P34 tape].  At a table were seated D1 and Au-Yeung Wai-keung.  D1 gave a white envelope to Au-Yeung.       

13. At 1230 hours on 2 August 2007, PW7 was in Steak Expert Restaurant, Sun Fung Avenue, with a hidden camcorder switched on [P36 tape].  At a table were seated D1 and Au-Yeung Wai-keung.  D1 gave a white envelope to Au-Yeung.  

B.  Arrest and preliminary handling of D1

14. On 2 August 2007, soon after leaving Steak Expert, D1 was arrested and taken to a concrete plinth in an alleyway perpendicular to Sun Fung Avenue.  After some preliminary questions, the officers were led by D1 to a nearby carpark to search his car.  Nothing of relevance was found.  D1 was taken to his home for a house search but could not gain entry for want of the keys.  The keys were being kept by the renovators who were out for lunch.  After waiting for some time at the ping pong table area on the ground floor podium, the officers decided no longer to wait.  They brought D1 back to ICAC’s Murray Road Carpark Building Head Office (“Head Office”) for further investigation.   

C.  Admitted facts

15. The prosecution and the defence admit under section 65C of the Criminal Procedure Ordinance [P62] that:

  D1’s position

(1)    D1 has a clear record.

(2)    At all material times, D1 was a supervisor of BUC.

(3)    At all material times, Kwok was one of the three partners in BUC and a director and shareholder of BUC.  Its registered address was No. 19, 1/F., Tower A, Cambridge Plaza, 188 San Wan Road, Sheung Shui, New Territories, Hong Kong.

Kamboat (Charges 1 and 3)

(4)    At all material times, Au-Yeung Wai-keung was a supervisor of the Roasted Meat Section of the Kwun Tong Branch of Kamboat and his duties included placing orders with suppliers.  In addition, he was the most senior supervisor of all the roasted meat sections of all branches of Kamboat.  He was responsible for advising the Roasted Meat Section of all the branches on purchasing matters.  Since 2002, Kamboat had placed orders with BUC for chilled poultry.  Kamboat does not allow its staff including Au-Yeung to solicit or accept commission or rebate from its suppliers.

Hoi Tin (Charge 5)

(5)    At all material times, Fung Siu-wah was the head of the Roasted Meat Section of Hoi Tin and his duties included placing orders with suppliers.  Since 2006, Hoi Tin had placed orders with BUC for chilled boneless tenderloin.  Hoi Tin does not allow its staff including Fung to solicit or accept commission or rebate from its suppliers.

      Café de Coral (Charge 6)

(6)    At all material times, Yeung Lit-wah was a Senior Chief Cook of the Roasted Meat Section of Café de Coral and his duties included the monitoring of food supplied by its suppliers.  At all material times Café de Coral had placed orders with BUC for chilled poultry.  Café de Coral does not allow its staff including Yeung to solicit or accept commission or rebate from its suppliers.

          Office search of BUC

(7)    On 2 August 2007, the office of BUC was searched by the officers. 

(8)    The accounting records of BUC between 1 January and 30 June 2007 reflected payments to Kamboat on a monthly basis in cash in amounts varying between HK$16,650.50 and HK$27,167.00.

(9)    The General Ledger [P8] shows 7 monthly payments under “Expenses on the Mainland” each of $10,000 from 27 December 2006 to 30 June 2007.

D.  Other evidence

16. On 2 August 2007, the officers arrested Au-Yeung Wai-keung at a short distance from Steak Expert.  They retrieved from him an envelope [P1] which contained $21,360 cash [P3].  The prosecution say it was the bribe paid by D1 to him in Steak Expert. 

Evidence in the VIR

17. In the VIR D1 said that:

On Charges 1 and 3

(1)       He was responsible for payment-collection and outdoor sales in BUC.  He once paid a bribe put in an envelope to Au-Yeung Wai-keung in Hang Wan Kiu Restaurant.  The torn piece of paper [P2] recorded the sums rebated by BUC to Au-Yeung Wai-keung of Kamboat.  The rebates were intended to induce Kamboat to purchase more meat from BUC over a 1-year period commencing from August 2006.  His boss, Kwok Shi-hing, in effect authorized him to do so.  The rebate was recorded as “miscellaneous expense” in the monthly accounts.  Each amount was between $10,000 odd to $20,000 odd.

On Charge 5

(2)       Fung Siu-wah of Hoi Tin requested him to pay up tea money.  He paid Fung about $300 tea money a month.  He thought Kwok Shi-hing might not have been told of the tea money given to Fung.  If he did not give Fung the tea money, Fung would not place orders with him. 

On Charge 6

(3)       The money that Yeung Lit-wah of Café de Coral received from him did not depend on the amount of purchase.  Each time several thousand dollars was given to Yeung.  It was paid once every month or every two months.  $5,000 was the minimum and $10,000 the maximum that he had ever paid Yeung.  Kwok Shi-hing in effect authorized him to do so.  After receiving the money, Yeung rarely complained about the quality of the meat.  If he complained too much, BUC would have no more business with Café de Coral.  Yeung would also tip BUC off to supply better meat at the time of inspection by senior staff.  Once he paid $10,000 tea money to Yeung Lit-wah at the KCR Station so that Yeung would not play tricks with BUC’s business.

Other prosecution evidence

18. PW17, PW18, and PW19 are former staff members and colleagues of BUC.  PW17 says that D1 was also involved in sales apart from other duties.  PW19 says that D1’s duties included dealing with customers’ complaints and informing the restaurant groups of the change in prices.   

Mitigation put forward

19. D1 is now 56 years of age.  He has a clear record.  After completing F. 4 education, he worked in various blue-collared jobs until he joined BUC in 1999.  He has a happy family, which consists of a loving wife and three adult daughters.  He is also well liked by his fellow traders. 

20. His counsel highlights his role as being passive and used by others.  He was not a shareholder or director of BUC.  He derived no benefit from the corruption as an employee, either.  None of the other people involved in this operation was prosecuted.  D2 has already absconded before the present trial.

21. It is suggested that concurrent sentences shall be imposed because all charges related to his same course of conduct.

22. A commendation letter written by the Sham Shui Po District Board reflected community work rendered by him.  He has had 4 years of voluntary service for the elderly in individual fund-raising, decoration, renovation, and transportation tasks.  

Sentencing examples of corruption cases in private sector

23. In R v Kung Ying-man, Spencer CACC 513/1986, the applicant was the sales manager of Cathay Pacific Airways. He pleaded guilty to 13 charges of accepting an advantage involving a total of $315,000.  There was a breach of trust.  A starting point of 27 months was adopted.

24. In The Queen v Chan Koon-kwok, Arthur [1990] 2 HKLR 458, the respondent had abused his position of trust by soliciting (4 charges) and accepting a total of $150,000 (9 charges) from garment suppliers without the knowledge or consent of his employers.  In respect of the 4 soliciting charges, the Court of Appeal regarded a concurrent immediate term of 18 months appropriate after trial.   

25. In A-G v Leung Kin Wai CAAR5/1996, the respondent was the senior purchasing manager in Mattel, the international toys company.  Mattel placed orders with manufacturers of toys.  In breach of his employer’s trust, he solicited advantages from 2 manufacturers (2 charges).  He accepted advantages as a result (5 charges).  He received $491,000 in total.  The Court of Appeal regarded 3 years as the proper starting point for each set of charges.  The totality principle should call for a reduction of 1 year.  The sentences should be consecutive.      

26. In HKSAR v Cheng Chong Shing CACC 100/2003, the applicant was a senior freight officer of Qantas Airways Ltd.  He accepted $330,000 from customers for showing favour in the reservation of cargo space.  He pleaded guilty to 2 charges of accepting an advantage, 2 charges of conspiracy to accept advantages and 1 charge of conspiracy to use a document with intent to deceive his principal.  A total sentence of 2 years and 8 months was considered appropriate on appeal.

27. In HKSAR v Tsang Shui-kwan CACC304/2006, the 1^st applicant offered and paid $150,000 bribes in total to a senior construction manager of Shui On so that the manager would not criticize his work at various projects.  He demanded his subordinates to contribute to the bribes.  He also offered and paid bribes of $1,000 to $1,500 per month for 7 months to the 2^nd applicant, who was the assistant foreman of Shui On responsible for checking the work record completed by him (1^st applicant).  For these charges which all involved the breach of trust, the Court of Appeal regarded a concurrent term of 3 years a proper starting point.                 

28. HKSAR v Nguyen Van-to CACC 353/2006 is quite similar to our present case.  The applicant was convicted after trial.  He was the shareholder and director of a food company.  For a one-year period before arrest, he offered monthly advantages to the regional manager of Wellcome Supermarket.  That manager secured for him purchase orders from the supermarket.  The total sum was $54,000 for 8 charges.  The Court of Appeal modified the original sentence to 21 months after mitigation.

Consecutive sentences for different parties involved

29. In The Queen v Stuart Leslie Turner [1989] 2 HKLR 123, the defendant was the executive director of Barclays Asia Ltd.  He accepted advantages from Carrian Holdings and another company.  Each charge related to a separate dealing in his same course of conduct.  The Court of Appeal regarded that, totality aside, it was wrong in principle to pass concurrent sentences. 

Sentencing D1

30. The 1^st Charge related to the period between 1 August 2006 and 1 August 2007.  According to his admissions in the VIR, it was between $10,000 and $20,000 per month.  I regard it to be $10,000 per month and $120,000 in total.  Given his capacity as a passive and used employee, I take 18 months as the starting point.  I give 2 months’ discount for his positive clear record.  The sentence is 16 months.       

31. The 3^rd Charge related to $21,360.  I take 9 months as the starting point. 

32. The 5^th Charge related to the period between 1 October 2006 and 2 August 2007.  The amount was $300 per month.  The total would be $3,000.  I take 6 months as the starting point. 

33. The 6^th Charge related to the period between 1 January 2007 and 30 June 2007.  According to the VIR, the minimum was $5,000 per month.  I regard it to be $5,000 per month and $30,000 in total.  I take 12 months as the starting point.   

34. The offences did not form a single transaction.  The sentences shall be consecutive.  However, I adjust the sentences by totality as follows:

(1)    1^st Charge: 16 months;

(2)    3^rd Charge: 9 months, wholly concurrent with 1^st Charge;

(3)    6^th Charge: 12 months, 6 months consecutive to other charges;

(4)    5^th Charge: 6 months, 3 months consecutive to other charges.