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Thursday, Jun 01, 2023

Four IT companies taken to court for cheating HK$13m of govt subsidy through cover bidding

Four IT companies taken to court for cheating HK$13m of govt subsidy through cover bidding

Four IT companies were charged by the Competition Commission for making cover biddings worth HK$13 million when providing quotations for IT solutions in applications for a government subsidy under the Distance Business Programme (D-Biz).
The four companies are Multisoft Ltd and its parent company, MTT Group Holdings Ltd (Multisoft); BP Enterprise Co Ltd and Noble Nursing Home Co Ltd (BP/Noble); KWEK Studio Ltd (KWEK); and Yat Ying Hong.

The watchdog said it has reasonable cause to believe that the four companies engaged in serious anti-competitive conduct – in the form of price-fixing, market-sharing, bid-rigging, and/or sharing competitively sensitive information between May 2020 and September 2021.

The case filed to the Competition Tribunal today (Wed) was also against three people. The three are Au Yeung Kit-yee, trading as Yat Ying in her personal capacity; Fan Sing-chi, a representative of Yat Ying and BP/Noble; and Tang Wai-chun, a director and shareholder of KWEK.

One respondent company, BP/Noble, has agreed to admit liability and entered into a cooperation agreement with the commission.

The Hong Kong Productivity Council first referred various complaints regarding D-Biz to the commission in June 2020 after suspecting its procurement process may have been targeted by anti-competitive conduct.

The council then provided the data of some 14,000 applications to the commission for a screening exercise, from which the commission identified a range of unusual bidding features that warranted the initiation of a formal investigation.

During the investigation, the commission uncovered evidence that supports its case that the respondents have contravened the Competition Ordinance.

The watchdog also found evidence suggesting that certain individuals may have committed criminal offenses, including forgery and providing false or misleading documents. The commission has then referred these matters to the police for criminal investigations.

The commission noted that there are altogether 189 D-Biz applications affected and the approved government funding totals around HK$13 million.

“In many sectors, government funding and sponsorship provide much-needed support and, in some cases, actual lifelines to businesses operating under difficult operating environments.

“Any attempt to exploit such important efforts through anti-competitive means needs to be confronted head-on, and this is one of the commission’s top priorities,” said Rasul Butt, Chief Executive Officer of the commission.

It marks the city’s first competition case involving the abuse of a government-sponsored Covid-19 subsidy program.
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