(A) Introduction
Bid‑rigging in building maintenance
has been a long‑standing and deeply entrenched problem in Hong Kong. Studies
estimate that such collusive conduct costs Hong Kong society between HK$4
billion and HK$25 billion every year. These
costs are ultimately borne by property owners, Incorporated Owners (the “IOs”) and
residents, who suffer from inflated contract sums, substandard renovation works
and a lack of genuine choice among contractors.
Tackling bid‑rigging requires a
multi‑agency effort, as these cases often involve not only anti‑competitive
conduct but also corruption, criminal intimidation and even triad elements. The
key players include the Competition Commission (the “Commission”), the Independent
Commission Against Corruption (the “ICAC”), the Hong Kong Police Force (the “HKPF”), other
relevant law enforcement agencies and their respective policy bureaux. At the
heart of this enforcement landscape is the Commission, which is the principal
authority responsible for investigating and prosecuting bid‑rigging under the
Competition Ordinance (Cap. 619) (the “Ordinance”).
Over the past several years, the
Commission has steadily intensified its efforts. From early joint operations
with the HKPF and the ICAC to a series of large‑scale standalone search
operations, the Commission has systematically uncovered and dismantled multiple
bid‑rigging syndicates. It has also identified new tactics, including “homework”
pricing instructions, cover bids (also known as “pig quotes”) and the use of
false representations in the “Non‑collusive Tendering Certificates” (“NCTCs”) published
by the Commission for procurers to use.
The road to the first‑ever building
maintenance cartel case brought to the Competition Tribunal (the “Tribunal”), which
commenced on 25 March 2026, has been paved by these progressively larger and
more sophisticated actions. That landmark proceeding marks the first time a
building maintenance bid‑rigging syndicate has been taken to the Tribunal for pecuniary
penalties and director disqualification orders, while also exposing individuals
to criminal prosecution for obstructing investigations and signing false
non‑collusive tendering certificates.
This article traces the Commission’s enforcement journey in the building maintenance sector, explains how the key operations differed from one another, highlights the novel features of this unprecedented cartel case, and offers practical guidance for both industry players and victims of bid‑rigging.
(B) Key Investigations undertaken
by the Competition Commission in the Building Maintenance Sector
The Commission has evolved from
reactive and small‑scale joint actions into proactive and large‑scale
standalone investigations. This transformation ultimately led to the first‑ever
building maintenance cartel case before the Tribunal. The following table summarizes
the major investigative actions undertaken by the Commission in the building
maintenance sector from 2022 to early 2026:
|
No.
|
Date of Operation
|
Partners
|
Scope
|
Projects Involved
|
Contract Value
|
Special Findings
|
|
1
|
|
Organized
Crime and Triad Bureau of the HKPF
|
2 office premises searched
|
A building maintenance
project of an industrial building in Tuen Mun
|
Not disclosed
|
Suspected triad
involvement; property management company manipulated tender; criminal
intimidation and damage
|
|
2
|
|
ICAC
|
Around 40 premises
searched
|
Renovation projects of
2 residential estates and residential-commercial composite buildings on Hong
Kong Island as well as 4 residential estates and industrial buildings in the
New Territories
|
Around HK$180 million
|
Bribery and bid‑rigging;
obstruction of Commission’s investigation powers
|
|
3
|
|
ICAC
|
Around 20 premises
searched
|
38 residential estates
/ buildings and industrial buildings in Hong Kong Island, Kowloon and the New
Territories
|
Over HK$1 billion
(individual contract up to $260M)
|
Cover bids; some
renovation contracts yet to be awarded or overturned.
|
|
4
|
|
Commission alone
|
4 premises
|
Private housing estate
in Kowloon City
|
Around HK$40 million
|
Violent means used to
coerce a bidder to refrain from bidding
|
|
5
|
|
Commission alone
|
19 premises
|
25 building
maintenance projects across multiple districts
|
Over HK$600 million
|
Two bid‑rigging
syndicates uncovered; structured organizations
|
|
6
|
|
Commission alone
|
27 premises
|
17 housing estates and
buildings across 9 districts
|
Around HK$700 million
|
Mastermind
(contractor) obtained confidential cost estimates from a consultancy;
coordinated “pig quotes” and turn‑taking as cover bidders
|
Differences across all six operations
(January 2022 – January 2026)
(1) Trigger
and investigative origin
The Commission has
shifted from reactive to proactive enforcement. From January 2022 to August
2025, operations were triggered by external intelligence, complaints or
referrals. In September 2025, the Commission initiated an operation based on
its own detailed analysis of evidence collected from earlier cases. By January
2026, the Commission was proactively uncovering new syndicates through in‑depth
examination of its own investigation files.
(2) Partners
The early operations
(January 2022, April 2024 and August 2024) relied on the HKPF or the ICAC as
joint enforcement partners. Starting from August 2025, all subsequent
operations were conducted solely by the Commission, using the compulsory powers
and intelligence accumulated from those earlier joint actions.
(3) Scale
of enforcement actions
The scale of operations
has escalated significantly over the years. The January 2022 operation searched
only two premises, while the April 2024 operation covered around 40 premises
and led to 20 arrests. The January 2026 operation, the largest to date, involved
27 premises and 14 companies.
(4) Scope
of projects and contract value
The scope expanded
dramatically. The August 2024 operation marked a massive leap, covering 38
projects with a total contract value exceeding HK$1 billion. Subsequent
operations remained large in scale, with the September 2025 operation covering
25 projects (over HK$600 million) and the January 2026 operation covering 17
projects (around HK$700 million).
(5) Tactics
and nature of violations
The syndicates’ methods
have grown increasingly sophisticated. Early cases involved simple bid‑rigging
or collusion. Later operations uncovered violence and intimidation (August
2025), bribery and obstruction of Commission powers (April 2024), structured
syndicates with cover bids (September 2025), and finally, a mastermind
contractor using a consultancy to leak confidential cost estimates with
systematic turn‑taking as cover bidders (January 2026).
(C) The First Building
Maintenance Cartel Case Before the Competition Tribunal
On 25 March 2026, the Commission
commenced proceedings in the Tribunal against a bid‑rigging syndicate in the
building maintenance sector. [9]
Why this case is special
(1) First
case of its kind to reach litigation
This is the first time a
major building maintenance cartel has progressed from investigation to formal
Tribunal proceedings.
(2) Unprecedented
scale and ambition
The syndicate
participated in tenders for at least 11 housing estates and buildings across
eight districts, with total contract values approaching HK$700 million.
Internal communications revealed the syndicate’s goal to corner 25% of Hong
Kong’s building maintenance market through illicit means. This is a clear
reflection of their “high degree of scheming and greed”.
(3) New
modus operandi
The syndicate used a
sophisticated system of internal coded language: (1) “Main character” (the syndicate’s
designated winner); (2) “Helpers” (contractors submitting cover bids); (3) “Homework”
(pricing instructions specified to the exact number). This level of
coordination went beyond simple bid suppression and involved detailed price‑fixing
and market allocation.
(4) False
Non‑Collusive Tendering Certificates (“NCTCs”)
Some contractors signed
NCTCs when submitting rigged bids. By making false representations in the NCTCs,
the relevant individuals may be liable for conspiracy to defraud. The Commission
will refer this matter to relevant law enforcement agencies for criminal
investigation. This is the first potential criminal investigation involving the
NCTCs.
(5) Individual
accountability extended to facilitators and middlemen
The Commission has named
12 individuals in the proceedings, including not only the mastermind and
directors of the involved companies, but also five middlemen who acted as
facilitators. This demonstrates that anyone who knowingly assists in
bid‑rigging, even without being a contractor or company director, may face
legal consequences.
Facts
The Commission’s case is as
follows:
(1) The
structure of the bid-rigging syndicate
The bid-rigging syndicate was controlled
by a mastermind, Mr. Cheung Kwing Kuen, who controlled Smart Goal Construction
Engineering Limited, Lermond Development Group Limited and Dream Building
Construction Engineering Limited (collectively “Dream Building”). The syndicate
also comprised: (1) 5 contractors: Cheung Lee Construction, Ngai Lam Building
Construction, Wang Yat Construction, Wai Yip Development Construction, and Chun
Hung Construction & Engineering; and (2) 5 middlemen (former employees of
the mastermind). In total, the proceedings involve six undertakings and twelve
individuals.
(2) The
bid‑rigging scheme (April 2022 – September 2023)
The mastermind scouted target
building maintenance projects across Hong Kong. For each tender, he:
(a)
Selected
bidders from the syndicate.
(b)
Assigned
roles: one “main character” (designated winner) and several “helpers” (cover
bidders).
(c)
Distributed
“homework” (pricing instructions), either personally or through middlemen.
(d)
Helpers
submitted bids referencing the homework to ensure the main character won.
(3) Contravention
The Commission has
reasonable cause to believe that the above conduct amounts to serious
anticompetitive conduct in the form of bid-rigging, price-fixing,
market-sharing, and/ or exchanging competitively sensitive information, in
contravention of the First Conduct Rule of the Ordinance.
(4)
Projects
involved
|
No.
|
Involved housing
estate/building
|
District
|
Project status (as of
20 March 2026)
|
|
1
|
Tsui Lam Estate
(Tsueng Kwan O) Sai Kung Tender cancelled and
|
Tsui Lam Estate
(Tsueng Kwan O) Sai Kung Tender cancelled and
|
Tsui Lam Estate
(Tsueng Kwan O) Sai Kung Tender cancelled and
|
|
2
|
Tak Shun Industrial
Building (Kwun Tong) Kwun Tong Completed
|
Tak Shun Industrial
Building (Kwun Tong) Kwun Tong Completed
|
Tak Shun Industrial
Building (Kwun Tong) Kwun Tong Completed
|
|
3
|
Neptune Terrace (Chai
Wan) Eastern Awarded contract overturned and project retendered, contract yet
to be awarded
|
Neptune Terrace (Chai
Wan) Eastern Awarded contract overturned and project retendered, contract yet
to be awarded
|
Neptune Terrace (Chai
Wan) Eastern Awarded contract overturned and project retendered, contract yet
to be awarded
|
|
4
|
Yen Che Building (To
Kwa Wan) Kowloon City Completed
|
Yen Che Building (To
Kwa Wan) Kowloon City Completed
|
Yen Che Building (To
Kwa Wan) Kowloon City Completed
|
|
5
|
Kwai Fung House* (Kwai
Chung) Kwai Tsing Completed
|
Kwai Fung House* (Kwai
Chung) Kwai Tsing Completed
|
Kwai Fung House* (Kwai
Chung) Kwai Tsing Completed
|
|
6
|
Victory Garden* (Kwai
Chung) Kwai Tsing Suspended
|
Victory Garden* (Kwai
Chung) Kwai Tsing Suspended
|
Victory Garden* (Kwai
Chung) Kwai Tsing Suspended
|
|
7
|
Chung Sing Building
(Tai Kok Tsui) Yau Tsim Mong Completed
|
Chung Sing Building
(Tai Kok Tsui) Yau Tsim Mong Completed
|
Chung Sing Building
(Tai Kok Tsui) Yau Tsim Mong Completed
|
|
8
|
31 Yiu Wa Street
(Causeway Bay) Wan Chai Ongoing
|
31 Yiu Wa Street
(Causeway Bay) Wan Chai Ongoing
|
31 Yiu Wa Street
(Causeway Bay) Wan Chai Ongoing
|
|
9
|
Tai Ping Industrial
Centre, Block 1* (Tai Po) Tai Po Completed
|
Tai Ping Industrial
Centre, Block 1* (Tai Po) Tai Po Completed
|
Tai Ping Industrial
Centre, Block 1* (Tai Po) Tai Po Completed
|
|
10
|
Wang Fuk Court (Tai
Po) Tai Po N/A
|
Wang Fuk Court (Tai
Po) Tai Po N/A
|
Wang Fuk Court (Tai
Po) Tai Po N/A
|
|
11
|
Alhambra Building (Yau
Ma Tei) Yau Tsim Mong Ongoing
|
Alhambra Building (Yau
Ma Tei) Yau Tsim Mong Ongoing
|
Alhambra Building (Yau
Ma Tei) Yau Tsim Mong Ongoing
|
* Tender awarded to
syndicate member Smart Goal Construction Engineering Limited
(5) Relief
sought by the Commission
Before the Tribunal, the Commission
seeks:
(a) Declarations
that the 6 undertakings and 11 individuals contravened the First Conduct Rule
and pecuniary penalties (up to 10% of each undertaking’s annual Hong Kong
turnover for each contravention, for a maximum of 3 years) to be imposed on
them (Section 93(3) of the Ordinance).
(b) Director
disqualification orders against 6 individuals for up to 5 years (Sections 101‑102 of the Ordinance).
(D)
Key
Takeaways
(1) “This
is Just the Beginning”
The Commission has made
it clear that this landmark case is only the starting point. It is the first in
what is expected to be a series of Tribunal proceedings arising from the many
investigations the Commission has conducted since 2022. Bid‑rigging in the
building maintenance sector is now the Commission’s top enforcement priority.
The Tribunal’s eventual decisions will set binding precedents, and more cases
will undoubtedly follow.
(2)
For
Companies and Individuals in the Building Maintenance Sector
What this case means for companies and individuals in
the building maintenance sector?
This case signals a key shift in
enforcement, with direct personal consequences for directors, employees and
facilitators.
(a)
Director
and individual liability
Directors and senior
management face personal risk. Under Section 101-102 of the Ordinance, the
Tribunal may disqualify a director from being involved in company management
for up to five years. Further, under Section 103 of the Ordinance, disqualification
can apply even if the director did not actively participate, but ought to have
known about the contravention and took no steps to prevent it.
(b)
Criminal
offences
Two categories of
criminal conduct have been exposed:
(1) Offences
in relation to investigations: Refusing to provide information to the Commission,
destroying documents, or obstructing a search are criminal offences under
sections 52 to 54 of the Ordinance.
(2) False
NCTCs: Signing
an NCTC while participating in collusion can lead to prosecution for conspiracy
to defraud. Upon conviction, the maximum penalty is 14 years’ imprisonment under
Section 159C(6) of the Crimes Ordinance, Cap. 200.
(c) Middlemen
and facilitators are also liable
This
case explicitly targets five middlemen (former employees of the mastermind) who
facilitated the bid‑rigging scheme. Even if an individual does not sign a
contract, hold a directorship or work directly for a contractor, knowingly
assisting in price coordination, bid suppression, or cover bidding can lead to
legal consequences.
What
should companies do?
In light of these risks,
companies and individuals in the building maintenance sector should take the
following steps immediately:
(1) Review
and update internal compliance programmes: ensure they specifically address bid‑rigging
risks, including price‑fixing, market sharing, and cover bidding.
(2) Draft
clear bidding guidelines: Prohibit any communication with competitors about
pricing, bid submission, tender strategies, or the decision to bid or withdraw.
(3) Train
staff on NCTCs – Ensure that all employees who sign or handle Non‑Collusive
Tendering Certificates understand their legal implications. A false declaration
is a criminal offence.
(4) Consider
leniency and cooperation – The Commission operates a leniency programme under Section
80 of the Ordinance. The first cartel member to come forward with genuine
cooperation before an investigation begins may avoid pecuniary penalties.
(3) For
Victims of Bid‑Rigging (for example, Property Owners, Incorporated Owners and Residents)
What should victims do?
If you have suffered loss or damage because of a rigged
tender, follow-on actions offer a powerful path to recover your losses.
(a) What
is a follow-on action?
Under Section 110 of the
Ordinance, any person who has suffered loss or damage as a result of a
contravention of a conduct rule can bring a follow-on action against the
infringing party based on (i) a determination by the Tribunal, the Court of
First Instance or the higher courts that a conduct rule has been contravened;
or (ii) an admission of a contravention in a commitment that has been accepted
by the Commission.
In this case, once the
Tribunal issues a final decision that the syndicate contravened the First
Conduct Rule, that decision will serve as the basis for follow‑on actions by
affected property owners, IOs and residents.
(b)
How
does it work in practice?
(1) Trigger:
The Tribunal makes a final decision that the syndicate’s conduct contravened
the First Conduct Rule (e.g., bid‑rigging, price‑fixing).
(2) Statutory
bar: During any appeal period, a follow‑on action cannot be brought (Section
111(1) of the Ordinance).
(3) Binding
effect: The Tribunal’s finding of contravention is binding in the
follow‑on action (Section 119 of the Ordinance). The claimant does not need to re‑prove that
bid-rigging occurred. He only needs to prove that he suffered or loss or damage;
and that the loss or damage was caused by the contravention. Please note that
the Competition Ordinance and the Competition Tribunal Rules are silent on the
calculation of damages.
(4) Time
limit: The action must be brought within three years after the
earliest date on which it could be commenced following the expiry of any appeal
period (Section 111(3) of the Ordinance).
(c) What
orders can the Tribunal make?
Schedule
3 of the Ordinance provides a wide range of remedies, including:
(1)
Damages
(paragraph 1(k)) – compensation for loss suffered.
(2)
Disgorgement
of profits (paragraph 1(p)) – payment of an amount up to the profit gained or
loss avoided.
(3) Order declaring any any agreement (the making or giving effect to which constitutes the contravention of the competition rules) to be void or voidable to the extent specified in the order (paragraph 1(i)).
(d) No class action
Currently, in Hong Kong,
there is no class action procedure (that is, a procedure allowing one
representative claimant to sue on behalf of himself or herself as well as all
other persons who have a claim regarding the same alleged wrong). This means that each victim must
bring its own separate follow‑on action. However, it is possible for multiple
claimants to apply to the Tribunal to have their cases heard together
(consolidation).
https://www.info.gov.hk/gia/general/202602/25/P2026022500568.htm
https://www.mpweekly.com/culture/社會/圍標-廉政公署-icac-262842[3] https://www.compcomm.hk/en/media/press/files/PR_Joint_operation_EN.pdf
[4] https://www.compcomm.hk/en/media/press/files/Joint_operation_PR_EN.pdf
[5] https://www.compcomm.hk/en/media/press/files/PR_Joint_operation_AUG_EN.pdf
[6] https://www.compcomm.hk/en/media/press/files/building_maintenance_search_PR_EN.pdf
[7] https://www.compcomm.hk/en/media/press/files/Janus_PR_EN.pdf
[8] https://www.compcomm.hk/en/media/press/files/Hunter_PR_EN.pdf
[9] https://www.compcomm.hk/en/media/press/files/BM_case_PR_EN.pdf
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