The risk of applying for a prestigious club membership via an intermediary or broker - Membership consultancy firm operator jailed for bribery over Jockey Club’s membership application
In Hong Kong, there are membership consultancy firms that assist applicants to subscribe for memberships of renowned clubs and associations. In the case HKSAR v Wai Jun-feng Vincent (香港特別行政區 訴 韋駿鋒)  HKDC 1715, the Defendant who operated a membership consultancy firm was convicted of one count of conspiracy for an agent to accept an advantage, contrary to Section 9(1)(a) of the Prevention of Bribery Ordinance and Section 159A of the Crimes Ordinance, indicating that providing assistance in the subscription of such memberships may attract criminal liabilities in certain circumstances. There is a risk that customers who apply for such memberships via broker or intermediary companies might also incur criminal liabilities.
The Defendant was an operator and the Deputy General Manager of Potential Membership Centre Limited (“Potential”). The business of Potential mainly consists of helping its clients to apply for memberships of renowned clubs and associations.
From May to July 2016, the ICAC sent two undercover agents, A & B, to contact the Defendant, expressing their interests in the membership of the Hong Kong Jockey Club (the “HKJC”). Agent A made a phone call to Potential, which was subsequently picked up by the Defendant. Agent A expressed that her boss (who was pretended by Agent B) was interested in the membership of the HKJC and asked for information e.g. fee schedule for subscribing for memberships of a number of clubs and associations, including the HKJC. Agent B then called the Defendant, expressing that his business partner, Ming Gor (“Ming”) was interested in joining the HKJC membership. The Defendant told Agent B that he could obtain the membership application form from the voting members of the HKJC at the price of HK$680,000 and would arrange Ming to meet with the people who were able to sign the membership application form. The application must be separately proposed and seconded by one voting member and supported by three other individual full or racing members.
The Defendant was charged with one count of conspiracy for an agent to accept an advantage, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance and section 159A of the Crimes Ordinance.
According to section 9(1)(a) of the Prevention of Bribery Ordinance, any agent is guilty of an offence if he or she, without lawful authority or reasonable excuse, solicits or accepts any advantage as an inducement to or reward for on account of his doing or forbearing to do, or having done or forborne to do, any act in relation to his principal’s affairs or business.
The HKJC prohibits its members (including voting members) from soliciting or accepting any advantage for proposing, seconding and supporting a membership application.
The Defendant’s case was that he did not conspire with anyone to arrange for the membership subscription of the HKJC for Ming, nor did he know any of the HKJC’s members who could assist Ming in joining the HKJC. The Defendant alleged that he made up everything about the HKJC membership in order to gain trust from Agent A and Agent B so that he would be able to promote memberships of other clubs and associations more easily.
The Court examined the evidence from both sides and decided that even though no deal was completed between the Defendant and Ming, the Defendant had sufficient knowledge of the details of the HKJC membership and it was his intention to arrange for the subscription of the HKJC membership by Ming with the help of unknown members of the HKJC in return for a substantial amount to money to be paid to the members of the HKJC. The Defendant was therefore convicted of one charge of conspiracy for an agent to accept an advantage, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance and section 159A of the Crimes Ordinance.
The Court considered the recording of the face-to-face interview between the Defendant and Agent B and examined the content of the recording, in which the Defendant explained about the transferability of the membership, the classification of membership and the procedures of the application etc., which were all accurate. The Court considered the Defendant to be extremely familiar with the HKJC membership in contrast to what was alleged by the Defendant.
The Court therefore had no doubt about the Defendant’s ability to assist Ming in obtaining the membership application form from the HKJC and arranged for meetings among Ming and the members of the HKJC who could sign the application form to refer Ming to join the HKJC. The Defendant also told Ming that he might need to pay the members of the HKJC for them to sign the application form. The Court therefore convicted the Defendant of conspiracy with the current members of the HKJC to accept advantage as an inducement to or reward for signing the membership form and sentenced the Defendant to 16 months’ imprisonment.
This case clearly illustrates that while conducting the business of membership referral and consultancy, one should always bear in mind not to receive any advantage or inducement to assist any third party in receiving the same from doing any act in relation to his principal’s affairs or business, which may eventually amount to bribery. One particular example of bribery here is assisting the existing members of a club or an association in receiving monetary reward from referring new applicants to the club or association. For those who engage membership referral and consultancy services and pay for the service, there is a risk that they might also infringe the law in conspiring to pay an advantage to an agent as an inducement to or reward for obtaining the HKJC membership.
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Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
Published by ONC Lawyers © 2020