Subcontracting arrangements

The other main player in what would turn out to be a major scam was Hui Hon Contractors Ltd ("Hui Hon").

Hui Hon was not on HA's list of approved contractors. Shortly after Zen Pacific received the tender invitation, Hui Hon approached Zen Pacific, indicating its interest in the project. In November 1997, Hui Hon entered into a pre-contract agreement with Zen Pacific to the following effect: Hui Hon would undertake the design and construction of the piling foundation and prepare the bid, while Zen Pacific would be responsible for the procurement of construction materials such as concrete, reinforcement cages, and permanent linings, charging 4 percent of the total contract price and 3 percent of the material costs as administrative fees.

In February 1998, Zen Pacific subcontracted the works to Hui Hon immediately on being awarded the contract by HD. As the entity that had signed the contract with HD, Zen Pacific should clearly have informed HD of the subcontracting arrangements which they had entered into. Yet they never once disclosed this arrangement, even when HD requested them to report the details of any sub-contractors during an initial contract meeting. At this same meeting, Zen Pacific even introduced members of the staff of Hui Hon as their own staff.

Throughout the entire construction period, Hui Hon's role as a subcontractor was concealed. For example, when the site agent appointed by Hui Hon corresponded with HD, he always used the Zen Pacific letterhead.



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