Ex-manager of electric motors company charged by ICAC for concealing conflict of interest in $70m electric parts purchase orders
2022-11-17
A former manager of an electric motors company was charged by the ICAC yesterday (November 16) for allegedly deceiving the company into placing over 1,300 purchase orders of electronic parts worth totalling over $70 million with a supplier over a span of six and a half years by concealing the interests of him and his family member in the supplier. The case will be brought to the Eastern Magistrates’ Courts this afternoon for mention.
Seh Yat-wing, 58, former manager of Johnson Electric Group, faces two counts of fraud, contrary to Section 16A of the Theft Ordinance.
At the material time, publicly listed Johnson Electric Holdings Limited and its subsidiaries (collectively referred to as Johnson Electric Group) engaged in the manufacturing and sale of motion systems. The defendant joined Johnson Electric Group in 2006 as assistant manager and was promoted to manager in 2015. He was responsible for procuring electric parts and selecting suitable suppliers for the group.
In accordance with the policy of Johnson Electric Group managing conflict of interest, its employees should not engage in any business of its suppliers or customers. In addition, its employees should disclose relationships that may present a possible conflict of interest.
It is alleged that between September 2010 and March 2017, the defendant concealed from Johnson Electric Group his or his family member’s interests in Eaton Enterprise Limited (Eaton), and with intent to defraud, induced the group to include Eaton in the list of approved suppliers for the provisions of goods and place purchase orders with Eaton.
The ICAC investigation arose from a corruption complaint. Enquiries revealed that the defendant was alleged to have approved Eaton’s application for registering as a supplier of Johnson Electric Group. Records showed that the defendant and the registered sole director cum shareholder of Eaton were the parents of a child born in 2012.
During the abovementioned period, Johnson Electric Group had placed over 1,300 orders of electric parts with Eaton and settled payments amounted to over $70 million.
Johnson Electric Group has rendered full assistance to the ICAC during its investigation into the case.
The ICAC recommends business organisations to establish clear guidelines and declaration system on conflict of interest for employees, while employees should comply with the relevant guidelines. Webpage of ICAC’s Hong Kong Business Ethics Development Centre on “How to handle conflict of interest”: hkbedc.icac.hk/en/integrity_focus/how_to_handle_conflict_of_interest.
Seh Yat-wing, 58, former manager of Johnson Electric Group, faces two counts of fraud, contrary to Section 16A of the Theft Ordinance.
At the material time, publicly listed Johnson Electric Holdings Limited and its subsidiaries (collectively referred to as Johnson Electric Group) engaged in the manufacturing and sale of motion systems. The defendant joined Johnson Electric Group in 2006 as assistant manager and was promoted to manager in 2015. He was responsible for procuring electric parts and selecting suitable suppliers for the group.
In accordance with the policy of Johnson Electric Group managing conflict of interest, its employees should not engage in any business of its suppliers or customers. In addition, its employees should disclose relationships that may present a possible conflict of interest.
It is alleged that between September 2010 and March 2017, the defendant concealed from Johnson Electric Group his or his family member’s interests in Eaton Enterprise Limited (Eaton), and with intent to defraud, induced the group to include Eaton in the list of approved suppliers for the provisions of goods and place purchase orders with Eaton.
The ICAC investigation arose from a corruption complaint. Enquiries revealed that the defendant was alleged to have approved Eaton’s application for registering as a supplier of Johnson Electric Group. Records showed that the defendant and the registered sole director cum shareholder of Eaton were the parents of a child born in 2012.
During the abovementioned period, Johnson Electric Group had placed over 1,300 orders of electric parts with Eaton and settled payments amounted to over $70 million.
Johnson Electric Group has rendered full assistance to the ICAC during its investigation into the case.
The ICAC recommends business organisations to establish clear guidelines and declaration system on conflict of interest for employees, while employees should comply with the relevant guidelines. Webpage of ICAC’s Hong Kong Business Ethics Development Centre on “How to handle conflict of interest”: hkbedc.icac.hk/en/integrity_focus/how_to_handle_conflict_of_interest.