Secretary for Justice Teresa Cheng’s husband, Otto Poon Lok-to’s company has recently been charged by the Competition Commission Hong Kong. Poon’s company: ATAL Building Services Engineering Limited has been accused of colluding with Shun Hing Engineering Contracting Company Limited for price-fixing, market-sharing and/or bid rigging while bidding for air-conditioning projects in Hong Kong.
The case has been submitted to the Competition Tribunal for legal proceedings. The tribunal proceedings commenced on June 16, 2022 and the Tribunal has brought charges against the involved companies and individuals.
At the time of this report, Analogue Holdings stock price had fallen to 7.2 percent, to HK$1.67 (US$0.21). At the time of publishing the share price had dropped further to HK$1.48 (US$0.19).
According to the Competition Tribunal, ATAL Engineering and Shun Hing are two competing air conditioning engineering suppliers. From December 2015 to Dec. 4, 2019, the said companies had allegedly colluded in price-fixing, market-sharing and/or bid-rigging for air conditioning engineering projects in Hong Kong.
The Commission considered the engagement in questions violated The First Conduct Rule under the Competition Ordinance.
Additionally, three other individuals have been prosecuted by the Commission, including Shei Kai-wai and Cheng Kit-shun, senior engineers at ATAL Engineering, and Shun Hing’s senior manager, Kwan Siu-kin.
According to the Commission, between Dec. 14, 2015, and Dec. 4, 2019, the three said persons communicated frequently via various channels of email and text messages in response to quotations or invitations for bidding for air-conditioning projects in Hong Kong.
They requested and agreed to provide “cover bidding,” commonly known as “Pig Quotes,” and to share information on their intention to bid, as well as to disclose sensitive commercial information such as the intended bid prices, and project required dates of completion.
The Commission believed that ATAL and Shun Hing had been engaging in illegal conduct for over four years, which potentially impacted all types of air-conditioning engineering services they had provided, such as installation of central air-conditioning systems, replacement of plumbing pipes, and refrigeration systems. The total sales of the involved projects total approximately HK$2 billion (US$254.7 million).
The Commission also pointed out that they were also made aware of other potential anti-competitive acts involving air-conditioning works and that further legal proceedings might be initiated n the future.
The Commission applied for a court order from the Competition Tribunal. The Commission announced that the two said companies as well as the three persons involved had breached The First Conduct Rule of the Competitive Commission. The Commission seeks to impose fines on the accused, recover Commission costs and to require ATAL and Shun Hing to implement valid compliance schemes.
ATAL Building Services Engineering Limited and Shun Hing Engineering Contracting Company Limited are subsidiaries of Analogue Holdings Limited and Shun Hing Holdings Co. Limited, respectively.
ATAL Building Services Engineering and Shun Hing Engineering Contracting Company are considered to be the primary violators of the First Conduct Rule and are liable for legal consequences. The Commission warned that parent companies must ensure that their subsidiaries comply with the Ordinance and should implement appropriate compliance schemes or measures accordingly.
“Any business entity that contravenes the Competition Ordinance is liable to fines of up to 10% of its annual turnover in Hong Kong for each offense and up to 3 years,” The Commission stated. The Competition Tribunal also has the right to issue an executive order, sentencing individuals to pay a fine or disqualify him or her from acting as a director of a company for a period of up to 5 years.
In addition, the Commission emphasized that nearly 1 million documents were reviewed in this case, these contained one of the largest numbers of data in any collusion case in the Commission’s history.
Mr Rasul Butt Chung-ming, Chief Executive Director of the Commission (corporate services and public affairs), said air conditioning supplies are necessity in the modern world; the conspired behaviors affected residents’ households and the general public working in commercial buildings.
Combating collusion that affect people’s livelihoods continues to be one of their enforcement priorities, especially when the companies involved are large-scaled and active players in the market.
Looking through data information, the founder of ATAL Engineering is Otto Poon lok-to, husband of the Secretary of Justice Teresa Cheng Yeuk-wah.
Case Number： CTEA2/2022
