The ICAC has arrested a senior executive of a school tuckshop franchisee for her suspected involvement in a scam to deceive her employer of $1.5 million over the awarding of renovation contracts allegedly facilitated by corruption.

The franchisee, a subsidiary of a food and beverage company, operates a large number of school tuckshops throughout the territory.

The arrestee, an assistant general manageress of the franchisee, was netted in Operation "Tide Watcher" which commenced on Tuesday (July 31). Also arrested were a decoration contractor and three directors of three different construction companies.

Internal audit by the franchisee had revealed that some of the decoration works at 27 school tuckshops had not been carried out as described in the relevant invoices.

The management suspected that its staff might be involved in corruption and referred the case to the ICAC.

Both the franchisee and its mother company offered full assistance to the ICAC during its investigation.

ICAC inquiries revealed that between July and September 1998, the franchisee entered into agreements with 27 schools to operate tuckshops at their premises. The arrested manageress was responsible for selecting contractors for the renovation works.

It was alleged that without going through tendering exercise, the manageress awarded the renovation contracts for all the 27 tuckshops to her brother-in-law, who subsequently subcontracted the works to the arrested decoration contractor.

Investigations revealed that while the works were subcontracted for $1.4 million, the arrested manageress’ brother-in-law allegedly billed the franchisee for $2.9 million.

It was alleged that with the assistance of the manageress, the franchisee had made full payments of $2.9 million to three construction companies which were used by her brother-in-law to conceal the scam.

The arrestees, aged between 32 and 44, have been released on ICAC bail.

Meanwhile, inquiries into the corruption allegation are continuing.