Hong Kong’s customs department has arrested a couple on suspicion of providing false information in relation to a water supply contract with the government, the latest development in a scandal over the authorities’ procurement processes.
On Wednesday, the Customs and Excise Department said businessman Lui Tsz-chung and his wife Chan Pik-lam had been arrested for allegedly breaching the Trade Descriptions Ordinance. They were already apprehended by police on Sunday for suspected fraud.
Tommy Kwok, head of the Trade Descriptions Investigation Bureau, told reporters that the couple allegedly attached false manufacturer information to the water – bottled in mainland China – supplied to the Government Logistics Department. The investigation is ongoing and more arrests may be made, he said.
The second arrest is the latest development in a scandal relating to a now-suspended government contract, worth HK$52.9 million, with bottled water supplier Xin Ding Xin Trading Co. Lui is the company’s director and his wife is a shareholder.
The supplier had been selected to provide mainland Chinese bottled water to Hong Kong government offices.
But authorities later found that the company had no relationship with the Guangzhou supplier it claimed to be sourcing water from. Instead, the product was obtained from a different supplier in Dongguan. The couple is suspected of winning the contract through fraudulent means.
Lui was formally charged with fraud on Tuesday and denied bail, while his wife was released on police bail pending further investigation.
The scandal has raised concerns about the government’s procurement and vendor vetting processes.
Secretary for Financial Services and the Treasury Christopher Hui called an urgent meeting on Sunday to review the incident and has promised a probe into the blunder.
On Tuesday, he admitted the scandal reflected “inadequacies” in the processes but did not answer directly when asked if any officials would resign or be held accountable.
