Hong Kong’s anti-trust watchdog has launched proceedings against a “building maintenance cartel” that allegedly secured multi-apartment contracts worth around HK$700 million through bid-rigging and other illegal practices.
Competition Commission said on Wednesday that it had filed charges against eight construction firms and 12 individuals in the Competition Tribunal for “serious anti-competitive behaviour”, including bid-rigging, price-fixing, market sharing and sharing of sensitive information.
The syndicate allegedly won contracts at 11 properties, including the fire-hit Wang Fuk Court in Tai Po, through illegal means between April 2022 and September 2023.
The anti-trust watchdog said its investigation followed a referral by the Independent Commission Against Corruption (ICAC) in January 2024 and that the two authorities carried out two joint operations later that year.
“Internal union communications obtained during our investigative operations reveal their ambition to close out a quarter of the building maintenance market in Hong Kong through illegal means,” Rasul Butt, CEO of the Competition Commission, said in a statement.
“The submission of the case today means that the Commission’s enforcement work in the building maintenance sector has entered the stage of the judicial process – and I must emphasize that this is only the beginning.”
‘Homework’
The anti-trust watchdog said the cartel consisted of a search engine for building maintenance projects, several contractors and brokers.
Once a project was selected, one contractor would be designated as the “lead character”—the intended tender winner—while the rest served as “helpers” by providing “covering bids.” according to in the Competition Commission.
The organizer would then make price instructions, which the union reportedly called “homework,” and deliver them either personally or through intermediaries, he said.
The contracts won by the syndicate were spread across eight districts in Hong Kong, with five projects completed and two currently in progress.
The Commission is asking the Competition Court to impose fines and disqualify six individuals from serving as company directors.
The 12 individuals charged include Cheung Kwing-kuen, the alleged mastermind of the syndicate, five suspected brokers and six contractors.
The firms mentioned are: Smart Goal Construction Engineering, Lermond Development Group, Dream Building Construction Engineering, Cheung Lee Construction, Ngai Lam Building Construction, Wang Yat Construction, Wai Yip Development Construction and Chun Hung Construction & Engineering.
Prosecutors of the ICRC
Meanwhile, the anti-bribery watchdog ICAC said on Wednesday that it had filed corruption charges against five people, aged 42 to 70, over renovation projects totaling HK$90 million in three flats.
The defendants included Cheung and his former employee Chow Shuk-ha, both of whom were also named in the Competition Commission’s indictments on Wednesday.
ICAC alleged that the defendants offered bribes to a member of the property management committee or to apartment owners in exchange for helping a contractor win projects, or to persuade other residents not to cancel tenders. In these cases, bribes are refused.
The bid rigging strike
The Competition Commission and ICAC prosecutions mark an intense crackdown on bid-rigging in the city’s building maintenance market, which was thrust into the spotlight after November’s fatal fire at Wang Fuk Court.
A public inquiry into the fire is ongoing. During a hearing on Tuesday, Lester Lee, executive director of legal services at the Competition Commission, described bid-rigging as a long-term blight.
Explainer: How deadly Tai Po fire exposes bid-rigging epidemic in Hong Kong’s renovation industry
“The commission has observed persistent, systematic and widespread anti-competitive conduct,” Lee said in Cantonese.
“We are of the view that the issue is across Hong Kong, Kowloon and the New Territories… It involves a large number of contractors as well as a fair amount of consultants,” he added.
