A director (D1) of an engineering company (Company A), charged by the ICAC, today (Monday) admitted bribery and false accounting offences in relation to the supply of electrical materials to Hong Kong Housing Authority's (HA) building projects.

D1, 73, pleaded guilty to one count of conspiracy to offer an advantage to public servants, contrary to Section 4(1)(a) of the Prevention of Bribery Ordinance and Section 159A of the Crimes Ordinance, and one of conspiracy to falsify account. Another similar bribery offence against him was placed on court file.

District Court Judge Andrew Chan Hing-wai adjourned the case until July 6 for mitigation. The defendant was granted cash bail of $200,000 and ordered not to leave Hong Kong.

The court heard that HA contracted out building projects to main contractors, who would in turn sub-contract the installation of various building services, namely electrical equipment, fire service and water pumps, air-conditioning and ventilation, as well as lifts and escalators, to subcontractors. HA would then appoint those building services sub-contractors as Nominated Sub-contractors (NSCs).

Since August 1998, D1, together with a director (D2) of another engineering company (Company B), a president (D3) and a sales manager of a construction company (Company C), had regular meetings.

During the meetings, they formed a cartel and discussed the order of priority for Company A, Company B and Company C to secure contracts for the supply of an electrical material, known as Miniature Circuit Breaker (MCB), to those NSCs in forthcoming HA building projects. Two other suppliers subsequently joined the cartel in January 1999.

As a result, the suppliers avoided genuine competitions among themselves, and secured a greater profit margin.

At a subsequent meeting, D2 told D3 and the sales manager of Company C that certain officers of the Housing Department (HD) had offered assistance in pressurizing some of the NSCs to engage the cartel members to supply MCBs.

The court heard that D1 conspired with D2, D3 and other persons to offer a bribe payment of about $1.2 million to those HD officers between May and August 1999. The bribe money was equally contributed by Company A, Company B and Company C.

In return, the HD officers concerned remained favourably disposed towards the above suppliers; provided them with information, documents or complaints received from third parties in respect of the pricing of MCBs; and/or delayed the addition of other approved suppliers of MCBs to the approved list of building services products maintained by HD.

The court also heard D3 instructed the sales manager of Company C that the bribe money would be covered up as payments for goods or services from Company A and Company B.

D1 then conspired with D2, D3, a financial controller (D4) and the sales manager of Company C to issue two bogus purchase orders between June and August 1999 for the amount of $200,000 each, purporting to show that Company C had placed orders with Company A and Company B respectively for the provision of labour and equipment for certain building services works, the court was told.

Apart from D1, D2, D3 and D4 were also charged in June 2004 for their respective roles in the case.

A District Court deputy judge ordered a stay of proceedings in July 2005 on the grounds that the ICAC's taping of a meeting between D3 and his lawyer in November 2002 had infringed D3's legal professional privilege.

In December 2005, the Court of First Instance ruled in favour of the Department of Justice in a judicial review on the aforesaid ruling and ordered the case to be remitted to the District Court for fresh determination.

The defendants' subsequent bids to revert the ruling were dismissed by the Court of Appeal and Court of Final Appeal respectively in December 2006 and September 2007.

The defendants then subsequently made a fresh application for stay of proceedings at the District Court, but their application was rejected by Judge Chan in June 2008.

In August 2008, a severance application made by D1 was allowed, while the trial for D2, D3 and D4 commenced.

In convicting the trio in December 2008, Judge Chan gave reasons for his earlier dismissal of the defendants' fresh application for stay of proceedings.

The judge found that the meeting in November 2002 was yet another occasion where D3 was trying to pervert the course of public justice, and lawyers were being used as innocent tools to further his criminal purpose. It was a meeting where legal professional privilege had no application.

The judge also determined that there was no abuse of executive power in this case, and the ICAC's action to tape the meeting was not unreasonable and was without bad faith.

D2, 58, and D3, 50, each received a jail term of five years, while D4, 42, was jailed for 21 months.

The prosecution was today represented by prosecuting counsel Giles Surman, assisted by ICAC officer Jamie Fung.