A Hong Kong cleaning company has been fined nearly HK$11 million (US$1.4 million) for colluding with a rival to fix prices on bids for Housing Authority contracts worth HK$180 million, the city’s competition watchdog has disclosed.
Hong Kong Commercial Cleaning Services and Man Shun Hong Kong and Kln Cleaning Company, along with their three directors, Chan Ming-chu, Cheng Yip-chiu and Cheng Hok-kuen, were taken to the Competition Tribunal in December 2021 following an investigation, a spokesman for the watchdog said on Monday.
The Competition Commission launched the investigation upon a complaint from a group of individuals, including several cleaners of a public housing estate, who alleged that contractors, including the two firms, were colluding with each other when bidding for cleaning service contracts from the authority.
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Hong Kong Commercial Cleaning Services, together with directors Chan and Cheng Yip-chiu, signed a statement of agreed facts on Friday to settle the case.
The firm admitted breaching the First Conduct Rule of the Competition Ordinance by exchanging commercially sensitive information, which constituted price fixing, when bidding for 17 contracts with the Housing Authority from at least May 2016 to August 2018, the commission said.
The tenders, involving a total amount of about HK$180 million, were submitted to provide cleaning services for public housing estates and other buildings under the authority’s management.
Chan and Cheng Yip-chiu also agreed to admit liability for their involvement in the contravention.
The commission said it sought an order from the tribunal that Hong Kong Commercial Cleaning Services must pay a pecuniary penalty of HK$10.96 million, and an order that Chan and Cheng Yip-chiu must each pay a pecuniary penalty of HK$10,000.
Additionally, the commission recommended that the two individuals receive a director disqualification order for a period of 24 months.
The tribunal declared that Man Shun Hong Kong & Kln Cleaning Company and its director, Cheng Hok-kuen, had contravened the First Conduct Rule after admitting liability on January 30.
Other sanctions sought by the commission, such as pecuniary penalties and a director disqualification order, would be determined by the tribunal at a separate hearing if no settlement was reached.
Commission CEO Rasul Butt said the admission of liability by all respondents in the case represented a significant milestone in the watchdog’s investigation into the cleaning services cartel that aimed to undermine competition in public procurement.
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