The property manager was a British high school graduate, very intelligent and full of himself. He was described as leading a classy lifestyle and to have been particularly attracted to such luxuries as antiques, fashionable clothes, and expensive “own brand” cigars.
On 1 May 1962, after leaving the then Royal Hong Kong Police where he had served for over ten years, he joined the Telephone Company as an assistant administration officer at a monthly salary of $2,800. His major responsibility was supervising Telephone Company cleaning contracts. He was promoted to property manager on 1 July 1965 at a monthly salary of $3,775, and immediately prior to his sudden departure his monthly salary was $12,500.
He was fully responsible for Telephone Company property tenancies as well as repair, maintenance, and cleaning jobs for offices, telephone exchange buildings and staff quarters owned by the company. He had absolute power to influence the award of all relevant contracts.
He proactively solicited commissions in the very first year he joined the Telephone Company. From then on, his commission was collected on his behalf by the chief clerk of the property department, even when he was out of Hong Kong.
Nobody ever knew how much property this corrupt official really possessed. According to documents produced in court, he had set up an investment company in Panama. He was known to prefer cash deals, buying a car for HK$15,000 in ready money. Even during his trial, he contrived to purchase a plot of land in Spain valued at HK$300,000.
Now that substantial evidence had been gathered and witnesses had been obtained, the problem remained of how to bring this mastermind back to Hong Kong to face justice and a trial.
Extraditing the mastermind to Hong Kong was no easy task. In the first place, the authorities in the United Kingdom, to whom application was being made for his extradition, asked the ICAC in November 1978 to prepare a very large amount of documentation within two weeks-three steel boxes were eventually needed to hold it all.
In November 1978, the ICAC assembled 61 of its staff colleagues, dividing them into teams of two to collect and prepare all the documents required for extradition. There were over 5,000 copies of contracts, invoices and receipts concerning Telephone Company cleaning services. ICAC officers photocopied the relevant documents day in and day out. At ICAC headquarters, large groups of officers toiled side by side night and day. Word processing and computing generally were not then commonplace and a huge army of typists had to be put in place.
Mr Tso recalls that the Investigation Group hired six photocopiers to copy documents round the clock. He himself did not go home for a whole week.
Not a single minute could be wasted in the drive to complete all the documents needed for the extradition hearing. The massive task was finally completed on Christmas Eve. 140kg of documents in their three steel boxes were delivered to Hong Kong International Airport only 20 minutes before the flight on which they were to travel to London took off.
Meanwhile, the ICAC requested their Scotland Yard colleagues in the United Kingdom to monitor the mastermind’s every move in Britain. On 5 January 1979, Scotland Yard received an arrest warrant telexed from Hong Kong. The mastermind was arrested on a farm in Chesham in Buckinghamshire at 8:00 pm the same day.
He was immediately taken to London’s Bow Street police station and detained there. He refused to be extradited to Hong Kong, but he argued that this was not because he was afraid of punishment. He had returned to Britain from Hong Kong, he said, just to get a break from investigation and surveillance by the ICAC.
He was allowed bail in the sum of £75,000, pending the fixing of a date for the extradition hearing. He was required to report to the local police station every day and surrender his travel documents. He was also prohibited from contacting any Telephone Company staff.
After several months’ wait, the hearing was set down for 6 November 1979 at London’s Bow Street Magistrates’ Court. On 8 November, ten months after his arrest, the magistrate ruled that he should be extradited to Hong Kong to stand trial.
Ever shrewd, the property manager chose not to appeal. Here, Ms Wan’s view is that he might well have thought the ICAC would not have sufficient evidence to put him behind bars.
On 10 December 1979, accompanied by two ICAC officers, he flew back to Hong Kong. This was the second time the ICAC had applied for a British citizen to be extradited from the United Kingdom to Hong Kong for trial. The first time was when the corrupt former Police Chief Superintendent Peter Godber was sent back in 1975.
After 30 months of essentially unremitting investigation, the property manager was at last facing trial.
The proceedings commenced in Kowloon District Court on 1 April 1980. Presiding Judge O’Dea classified all 18 charges concerning the cleaning contracts, decoration and maintenance projects and electricity installation projects into three categories. The defendant denied all charges.
As a former police officer he possessed some background in the law. He did not retain a lawyer and conducted his own defence, submitting that his case came within the scope of the 1977 amnesty
In court, the property manager and the prosecuting counsel were in hot contention. The property manager vigorously denied his involvement in the scams and challenged the accuracy of the evidence given by the tainted witnesses. He also maintained that his acts had benefited the Telephone Company and that he had no intention of defrauding his employers.
On the other hand, the prosecuting counsel, who had also appeared for the ICAC at the extradition hearing, presented substantial evidence that the property manager had indeed played a leading role in the scheme. The tainted witnesses also claimed that they had acted on behalf of the property manager.
The assistant property manager claimed that he had been in the habit of giving the commissions to the property manager in the form of cash. The amount and time of each and every payment of commission was noted in a diary. Extracts from this diary reveal that the property manager continued to receive commissions even when he was being investigated by the ICAC. The flow of corrupt money stopped only when he fled back to the United Kingdom.
| Date | Amount received |
| 13-2-1978 | $46,000 |
| 18-4-1978 | $10,000 |
| 20-7-1978 | $25,000 |
| 4-9-1978 | $25,000 |
| 11-10-1978 | $22,000 |
| Total: | $128,000 |
| Telephone Company records showed that the property manager’s total salary over the same period was $117,260. | |
Prosecuting counsel also presented evidence to show that the property manager was in possession of unidentified income (actually higher than his income from the Telephone Company), including for example the following:
| Year | Salary from Telephone Company | Unidentified Income |
| 1971 | $71,000 | $85,000 |
| 1972 | $73,000 | $109,000 |
The property manager failed to submit evidence to the court relating to income other than that from the Telephone Company. The judge was of the opinion that the property manager’s lawful income from the Telephone Company was only enough to pay for his accustomed life of luxury and that the money for land purchase, car purchase and investment in overseas investment companies had been unlawfully obtained.
The major evidence in the trial was given by three tainted witnesses, namely the assistant property manager, the chief clerk and a cleaning contractor, but the judge was of the view that the evidence of these three witnesses was honest and reliable, and that it had accurately stated the role played by the defendant and the extent of his involvement.
The judge ruled that the property manager be convicted of 17 counts of corruption and conspiracy to defraud and that he should spend four years in jail-a deterrent sentence.
The property manager never appealed against his conviction and sentence.
The assistant property manager and chief clerk had earlier been charged respectively with accepting advantages in their capacity as public officers, contrary to Section 4(2)(a) of the Prevention of Bribery Ordinance. They were also charged with conspiring with the property manager and others to deceive the Telephone Company. They were convicted and sentenced to 21 months’ and 18 months’ imprisonment.
The government announced in November 1977 a partial amnesty for alleged corruption offences committed before 1 January 1977. But according to the supplementary directive from the Government, the amnesty was not applicable if the person was interviewed by the ICAC before 5 November 1977 and was told the offences alleged to have been committed.
Though the alleged offences took place between 1962 and 1978, the ICAC records showed that the property manager went to the ICAC for an interview on 18 March 1977 and was told the allegations of corruption. The amnesty did not therefore apply in his case.
Back in the 70s, the Telephone Company case was the talk of the town, not least because a senior British staff member of a public body in a British colony had been investigated by the ICAC, fled to England during the course of investigation, and had finally been extradited for trial.
The entire incident also helped dispel public worries about the ICAC’s ability to investigate, proving that the ICAC was of a mind to deal not just with cases of corruption within the Government, but also with corruption and malpractice in both public and private sectors, and was adequately prepared to do so. Statistics show that the number of reports against public bodies and private sectors increased in the years following the case.
No. of corruption reports concerning public & private sectors
Because it successfully dispelled so many misconceptions on the part of the public, the Telephone Company case would soon help to reshape Hong Kong’s overall thinking about corruption. Before this important ICAC crackdown, many people had assumed that the Telephone Company could operate as if were a private organisation-where bribes were, however mistakenly, considered a useful lubricant for business. It was now realised what a severe threat corruption was for public bodies and private organisations alike. It could not only tarnish their reputations but also result in huge losses.
At the same time, a number of other public bodies became predictably alarmed. The slack control of internal systems at the Telephone Company was clearly at the very heart of this much reported case and it was now much better appreciated that mismanagement could bring unforeseeable loss in its train. Many public bodies, regardless of scale, started tightening up their monitoring systems and sought to introduce better corporate governance.
