HKSAR v. LIONEL JOHN KRIEGER AND ANOTHER

DCCC316/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 316 OF 2010

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Reasons for Sentence

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1.  I turn now with a heavy heart to the unpleasant task of having to sentence you both for your part in this criminal conspiracy of which you have been convicted after trial of offering bribes to Ao Man Long of a sum of about 29 million Macau Patacas for the award and renewal of public cleansing contracts between CSR, a joint venture between Swire SITA and H Nolasco Limitada on the one hand and the Macau SAR Government on the other.

2.  Swire SITA held an 80 per cent shareholding in CSR whilst H Nolasco held a 20 per cent shareholding, and you, D1, at the material time was president of CSR and a director of Swire SITA in 2002 and 2003, and you, D2, appointed to the board of directors of Swire SITA in 2002, and a director of CSR.

3.  The contracts were extremely lucrative to CSR:

(a) 928 million for a renewal of the main cleansing contract, which was to expire in 2006;

(b) a hazardous waste contract worth some
96.5 million Macau Patacas; and

(c) a pilot automatic waste contract worth some
129 million Macau Patacas.

4.  In the event, you two in furtherance of the corrupt agreement, caused Swire SITA to transfer HK$9.18 million (the equivalent of 9.45 million Macau Patacas) to the Polymile account, of which HK$7.37 million was deposited into the account of Ao Man Long’s father.  This was in relation to the hazardous waste contract.

5.  I accept from both of your counsel that neither of you gained anything financially out of this.  The benefit, of course, was to Swire, who obtained the renewal of the main contract and the two additional ones, but there is no evidence of either of you obtaining special bonuses from either Swire SITA or CSR for that matter for the award of the contracts.

6.  What is apparent to me is that both of you, rather than being villains, were victims.  You fell prey to the avarice of one of the most corrupt officials in this part of the world at that time, Ao Man Long, who was the then Secretary for Transport and Public Works in Macau.

7.  It was he who solicited the bribes in the first place, and whilst I accept that you both initially were reluctant to pay any bribes and hoped that Ao would go away, you eventually came to the conclusion that you had no choice but to offer something to Ao, as payments had been delayed for up to four months on the main contract, and if you lost its renewal plus the other two contracts, the jobs of some 500-odd employees in CSR would be compromised.

8.  However, by acting as you did, there is no doubt that you have sullied the good name of Swire’s that is so close to the hearts of the people not only here in Hong Kong but also worldwide.

9.  By committing this offence, both of you have brought disgrace and shame to yourselves and families.  It is a spectacular fall from grace.

10.  You both have impeccable characters.  As far as you, D1, are concerned, I have read letters of support from Christopher Pratt, the chairman of Swire Pacific, and David Eldon, former chairman of HSBC, amongst others, and as far as you, D2, are concerned, I have read the many letters of support and character references put in as D2(17) as well as the letters put in on your behalf today.

11.  You are both leaders in your profession and, I accept, have worked tirelessly on environmental matters pertaining to Hong Kong, in particular.

12.  I also accept that there has been undue delay in bringing this matter to court, a delay for which neither of you can be blamed. Nolasco was arrested by the ICAC in December of 2006.  You were both arrested in June of 2009, now nearly some 2 years and 9 months ago.

13.  At the end of the day, however, whilst I have accepted that Ao was the main villain in this episode, Hong Kong’s society demands that the offering of bribes to officials in order to obtain contracts is completely unacceptable.  In business as in any other aspect of life, the maintenance of a level playing field is essential.

14.  I do not differentiate between either of you in terms of sentence.  I take as my starting point a sentence of 4 years’ imprisonment in respect of you both.  I will discount that sentence by 6 months in order to reflect the delay that has occurred, for which neither of you is to blame.  I will give each of you a further discount of 3 months’ imprisonment to reflect your positive good character and hitherto unblemished record.

15.  Accordingly, you are both sentenced to 3 years and 3 months’ imprisonment.