Director of ASTRI guilty of MIPO over conflict of interest in $540,000 procurements
2020-7-3
A director of the Hong Kong Applied Science and Technology Research Institute Company Limited (ASTRI), charged by the ICAC, was today (July 3) convicted of misconduct in public office (MIPO) for failing to declare a conflict of interest when handling purchase orders worth about $540,000 involving vendors controlled by or associated with him.
Lau Man-kin, 50, Research and Development (R&D) Director of ASTRI, was found guilty at the Shatin Magistrates’ Courts of one count of MIPO, contrary to Common Law.
Magistrate Mr Li Chi-ho adjourned the case to July 17 for sentence, pending background and community service order reports. The defendant was remanded in the custody of the Correctional Services Department.
The case arose from a corruption complaint referred by ASTRI. Subsequent ICAC enquiries revealed the above offence.
The court heard that at the material time, the defendant was an R&D Director of ASTRI, a public body set up to enhance Hong Kong’s competitiveness in technology-based industries by carrying out R&D projects financed by government funds.
As the project coordinator of three R&D projects which received about $9.5 million government funding, the defendant was authorised to make recommendations in respect of the use of project funds for procurements and appointment of vendors, and to approve purchase orders relating to the projects.
According to the Code of Conduct of ASTRI, the defendant should avoid any situation where his private interest conflicted with ASTRI’s and he must disclose to ASTRI whenever such conflict arose. He was also required to declare whether there was any conflict of interest in the procurement exercises he involved.
In about June 2016, the defendant instructed a subordinate to obtain quotations from Globalactive Technology Limited (Globalactive) and Broadlearning Education (Asia) Limited (Broadlearning Asia) for procuring computer products.
The two companies were then named as the proposed vendors in six procurement exercises of computer products. The defendant declared in all six procurement exercises that he had no conflict of interest with the proposed vendors.
Given the price quoted by Globalactive or Broadlearning Asia was the lowest, four and two purchase orders, worth totalling about $470,000, were respectively awarded to Globalactive and Broadlearning Asia.
The court heard that in fact, Globalactive was set up by the defendant in 1999. Between March 2016 and October 2017, Globalactive was co-owned by Golden Commence Limited (Golden Commence) and the defendant’s wife, who was the sole director of Globalactive and also the sole director cum shareholder of Golden Commence.
Golden Commence also held about 10 per cent of the shares of the holding company of Broadlearning Asia. A close friend of the defendant and the friend’s wife were the directors of Broadlearning Asia.
In October 2017, the defendant declared that he had no conflict of interest with Globalactive when endorsing another application for issuing a purchase order worth over $73,000 for computer products to Globalactive. The procurement was put on hold after ASTRI became aware of the connection of the defendant’s wife with Globalactive.
ICAC enquiries revealed that Globalactive and Golden Commence were actually controlled by the defendant. The quotations submitted by Globalactive and Broadlearning Asia were in fact prepared by the defendant, the court heard.
ASTRI had rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by Senior Public Prosecutor Peggy Leung, assisted by ICAC officer Lily Kam.
Lau Man-kin, 50, Research and Development (R&D) Director of ASTRI, was found guilty at the Shatin Magistrates’ Courts of one count of MIPO, contrary to Common Law.
Magistrate Mr Li Chi-ho adjourned the case to July 17 for sentence, pending background and community service order reports. The defendant was remanded in the custody of the Correctional Services Department.
The case arose from a corruption complaint referred by ASTRI. Subsequent ICAC enquiries revealed the above offence.
The court heard that at the material time, the defendant was an R&D Director of ASTRI, a public body set up to enhance Hong Kong’s competitiveness in technology-based industries by carrying out R&D projects financed by government funds.
As the project coordinator of three R&D projects which received about $9.5 million government funding, the defendant was authorised to make recommendations in respect of the use of project funds for procurements and appointment of vendors, and to approve purchase orders relating to the projects.
According to the Code of Conduct of ASTRI, the defendant should avoid any situation where his private interest conflicted with ASTRI’s and he must disclose to ASTRI whenever such conflict arose. He was also required to declare whether there was any conflict of interest in the procurement exercises he involved.
In about June 2016, the defendant instructed a subordinate to obtain quotations from Globalactive Technology Limited (Globalactive) and Broadlearning Education (Asia) Limited (Broadlearning Asia) for procuring computer products.
The two companies were then named as the proposed vendors in six procurement exercises of computer products. The defendant declared in all six procurement exercises that he had no conflict of interest with the proposed vendors.
Given the price quoted by Globalactive or Broadlearning Asia was the lowest, four and two purchase orders, worth totalling about $470,000, were respectively awarded to Globalactive and Broadlearning Asia.
The court heard that in fact, Globalactive was set up by the defendant in 1999. Between March 2016 and October 2017, Globalactive was co-owned by Golden Commence Limited (Golden Commence) and the defendant’s wife, who was the sole director of Globalactive and also the sole director cum shareholder of Golden Commence.
Golden Commence also held about 10 per cent of the shares of the holding company of Broadlearning Asia. A close friend of the defendant and the friend’s wife were the directors of Broadlearning Asia.
In October 2017, the defendant declared that he had no conflict of interest with Globalactive when endorsing another application for issuing a purchase order worth over $73,000 for computer products to Globalactive. The procurement was put on hold after ASTRI became aware of the connection of the defendant’s wife with Globalactive.
ICAC enquiries revealed that Globalactive and Golden Commence were actually controlled by the defendant. The quotations submitted by Globalactive and Broadlearning Asia were in fact prepared by the defendant, the court heard.
ASTRI had rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by Senior Public Prosecutor Peggy Leung, assisted by ICAC officer Lily Kam.