The convictions of former Chief Secretary of Hong Kong, Rafael Hui, former Sun Hung Kai chairman, Thomas Kwok, and two others have been upheld by Hong Kong's Court of Final Appeal. The appellants have resumed serving their sentences for conspiracy to commit misconduct in public office.
In a case that has occupied the legal, political and business community, the judgment provides important clarification on the scope of the common law offence, in particular what is required for conspiracy to commit misconduct in public office. The judgment confirms the well-established principle that benefits offered to develop or retain goodwill may fall foul of Hong Kong’s bribery laws.
The Court of Final Appeal has handed down an important judgment regarding bribery charges against former TVB general manager and TV presenter, Stephen Chan and his assistant, Tseng Pei-kun. In a case spanning seven years, Chan and Tseng were twice acquitted at first instance but found guilty of bribery by the Court of Appeal in November 2015. Tseng was found by the Court of Appeal to have offered, and Chan to have accepted, an unlawful advantage under section 9 of the Prevention of Bribery Ordinance (POBO), which governs bribery between private sector actors in Hong Kong.
In a detailed judgment dated 14 March 2017, the Court of Final Appeal unanimously reversed the Court of Appeal's decision, with the majority ruling that Chan was not acting “in relation to his principal (TVB)'s affairs or business" when accepting the advantage. As such, his conduct fell outside the purview of section 9 of the POBO. The judgment provides important clarification on the scope of Hong Kong's private sector bribery offence, in particular, what it means to act "in relation to a principal's affairs or business". With the Court of Final Appeal in January addressing the meaning of "acting for another" under section 9 of the POBO, the scope of the private sector offence has seen important clarifications in recent months.
In the recent case of HKSAR v Luk Kin Peter Joseph & Yu Oi Kee (FACC 8/2016), the Hong Kong Court of Final Appeal (CFA) clarified the scope of agency in the context of group companies for private sector offences under the Prevention of Bribery Ordinance (POBO).
The case involved the disposal of a subsidiary by China Mining Resources Group Limited (China Mining). Joseph Luk (Luk) and Yu Oi Kee (Yu), directors of the subsidiary, were alleged to have made false declarations of interests on the board minutes authorising the disposal. The CFA examined whether an agency relationship existed between directors of a subsidiary as agent and the parent company as principal, and held that for the purpose of section 9 of POBO, an agency relationship can arise without any pre-existing duty (legal, contractual or fiduciary). The mere acceptance of a request to act in relation to the principal’s affairs or business may itself create an agency relationship. The CFA unanimously dismissed the appeals and upheld Luk's and Yu's convictions.
This is an interesting decision for directors, particularly in the context of group companies in Hong Kong. It is common for companies to adopt a group structure whereby the various businesses of the parent company are conducted through its directly-owned and/or indirectly-owned subsidiaries, with different people holding directorships in the parent company and the subsidiaries. The CFA's broad interpretation of "agent" under section 9 of POBO means that directors should be more cautious of whether a duty to act with good faith has been imposed on them with respect to their conduct of affairs related to companies in which they do not hold directorships.
The case also highlights a further POBO private sector offence: corrupt transactions with agents under section 9(3), for which no monetary or other benefit need be transferred. If an agent, with intent to deceive his/her principal, uses a receipt, account or document in which the principal is interested, which contains false or incorrect statements intended to mislead, an offence is committed. Here, the board minutes were the document in question and contained false statements that Luk had no interest in the acquiring company. He was in fact its beneficial owner. This offence is of practical relevance but may be overlooked in the purview of bribery offences, as no transfer of advantage is involved.
In an e-bulletin published in March 2015, we reported that the South Korean National Assembly passed the “Act on the Prohibition of Illegal Solicitations and the Prevention of Conflicts of Interest of Public Officials”. The Act is also known as the “Kim Young-ran Law”.
The Kim Young-ran Law comes into force today, 28 September 2016, and introduces far-reaching changes to South Korea’s anti-bribery landscape. We summarise the key changes below.
Companies operating or investing in South Korea should ensure they undertake a comprehensive review of their compliance policies to address the requirements of the new law.
Clients operating across Asia Pacific face strict anti-bribery laws often coupled with a cultural tradition of gift giving and relationship building. Our new improved and expanded edition on “Gifts, Entertainment, Travel and Training” is aimed at helping clients navigate the local and international anti-bribery rules relating to the giving of gifts and entertainment. These rules often differ across jurisdictions and our Guide provides helpful guidance on what may or may not be prohibited and what steps can be taken to minimise the risk of falling foul of anti-bribery laws.
The Guide covers 15 jurisdictions across the region and provides practical guidance on parameters for the provision of gifts, and business hospitality, the status of charitable donations and benefits provided to third parties, and whether authorisation may mitigate liability. In this new expanded version of the Guide we have also included chapters summarising the key long-arm statutes, the US Foreign Corrupt Practices Act and the UK Bribery Act, and have included handy ‘at a glance’ checklists at the end of each country chapter. For more information, and to request a copy, please click here.
Former Chief Secretary, Rafael Hui, former Sun Hung Kai chairman, Thomas Kwok, and two others have today been given permission to appeal to Hong Kong's Court of Final Appeal. The Court of Appeal granted permission for the further appeal in light of public interest and the legal issues involved.
In February, the Court of Appeal dismissed the defendants' appeals against conviction. The court's ruling today means the Court of Final Appeal will review whether the offence of conspiracy to commit misconduct in public office is made out on proof that the defendant conspirators intended and agreed that, in return for a payment, Hui would be favourably disposed to them.
For more information on the Court of Appeal's judgment rejecting the Defendants' appeal in February, see here.
Hong Kong property tycoon Thomas Kwok and ex-deputy leader Rafael Hui saw their appeals against conviction and sentence dismissed before the Hong Kong Court of Appeal. In a detailed judgment, the Court of Appeal unanimously rejected the appeals brought by Kwok, Hui and two others. The judgment confirms the well-established principle that benefits offered to develop or retain goodwill may also fall foul of Hong Kong’s bribery laws.
Hui is the highest-ranking official in Hong Kong’s history to be found guilty of taking bribes. He was convicted in late 2014 of misconduct in public office and conspiracy and jailed for seven and a half years. Kwok was found guilty of conspiracy to commit misconduct in public office (ie, bribing an official) and sentenced to five years. Francis Kwan and Thomas Chan were sentenced to five and six years respectively for acting as middlemen for the payments. For further details on the trial court’s conviction and sentencing in December 2014, see our earlier ebulletin here.
International anti-corruption NGO, Transparency International, released on 27 January its latest Corruption Perceptions Index (CPI), reviewing public sector corruption risk in 168 countries. Our 2015 report highlights the same offending countries and points to similar issues, particularly systemic government corruption, failed electoral mandates and public revolts against alleged grand-scale corruption.
The latest CPI scores confirm corruption’s status as a social, political and commercial issue to be reckoned with. Boards, governments, companies and individuals from all walks of life encounter it; with technological advances only serving to aid rather than quell its increasingly covert forms.
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We have launched the first global edition of our Anti-corruption Report, reviewing a year in which corruption investigations have never been far from the headlines.
On 26 October, the Court of Appeal handed down its long-awaited judgment regarding bribery charges against former TVB general manager and TV presenter, Stephen Chan and his assistant, Tseng Pei-kun. The men had twice been acquitted but now face jail terms when sentenced next month.
The judgment confirms the limited practical application of the "reasonable excuse" defence in the context of bribery offences. It also highlights the grave consequences that may flow from relatively small benefits when they are legally construed as unlawful advantages.
The case is relevant both to employers and employees, especially employees who have frequent dealings with third parties. Employees should ensure that they seek consent from employers when receiving payment or other benefits, and comply with their employer's reporting policies. Employers should in turn take care to provide clear disclosure guidelines and training to employees as to when reporting is required.