Four of the nine contractors shortlisted for renovation works at Wang Fuk Court that later caught fire have close ties, raising concerns about possible bid-rigging, Pulse HK can reveal.
They include the successful bidder, Prestige Construction & Engineering Co Ltd, whose owner Hou Wah-kin and his wife Cheung Yin-kam are linked to the firms through shared ownership, directorships or registered addresses, according to company and land registry records.
A total of 57 companies submitted bids in July 2023, with the consultancy firm overseeing the HK$330 million renovation, Will Power Architects Co Ltd, shortlisting nine contractors for interviews two months later.
Directors at Prestige and Will Power, including Hou, have been arrested on suspicion of manslaughter and corruption, after the blaze last November engulfed seven of the estate’s eight tower blocks and killed 161 people.
Campaign group Property Owners Anti-Bid Rigging Alliance said contractors are not legally required to declare business or personal ties with rival bidders, creating what it called a significant gap in oversight.
“When several related companies are shortlisted at the same time, it inevitably raises serious questions about whether the process has been improperly influenced,” the spokesperson added.
How the firms are linked
The four shortlisted contractors linked to Hou and Cheung are:
- Prestige Construction & Engineering Co Ltd
- Mega Praise Construction & Engineering Ltd
- Man Sing General Contractors Ltd
- Widely Construction & Engineering Ltd
Hou co-founded Prestige with a business partner in June 2004 and has been its sole shareholder since October 2007. Before that, Cheung served as a director and held a minority stake.
Cheung later set up Best Luck Properties Ltd, which she wholly owns, and assembled a portfolio of multiple units in industrial buildings. Since late 2020, the company has taken out mortgages on at least four properties listing Prestige as the borrower, according to contracts reviewed by Pulse HK.
Mega Praise traded as Prestige Construction & Engineering (International) Co Ltd from August 2013 to January 2015, sharing an otherwise identical name to the successful bidder apart from the word “International”.
Its sole shareholder, who is also a director, has declared two residential addresses in Tai Kok Tsui and San Po Kong since October 2013, which land registry documents show are owned by Cheung and her company Best Luck respectively.
Records also reveal Mega Praise’s registered office address in Tai Kok Tsui between December 2014 and October 2017 was held by Best Luck.
Meanwhile, two Man Sing shareholders, who are directors as well, have separately set up companies with Hou and Cheung. One of them, the majority shareholder, co-founded another company with Hou in September 2018 that shares Man Sing’s registered address. The pair hold the company in equal shares.
The other, a 10 percent Man Sing shareholder, jointly owns a separate company with Cheung. Each holds one-third of the company’s shares.
Elsewhere, a Widely director since May 2010 served as a director at Prestige from April 2005 until June 2014. The person joined Prestige about nine months after it was founded, with the two roles overlapping for about four years.
Such overlaps are commonly treated by competition authorities as risk indicators, though not proof, of bid-rigging. All four contractors have been approached for comment.
Consultants’ role under scrutiny
Consultants at Will Power proposed the criteria for assessing all 57 bidders and drawing up the shortlist, which the estate’s owners’ committee approved in March 2023 without substantive modification.
Chiu Yan-loy of the Property Owners Anti-Bid Rigging Alliance said the shortlisting of interlinked companies naturally raises questions over possible bid-rigging.
“Under the current system, the same consultancy firm sets the rules, selects contractors and oversees the works, leaving homeowners exposed if it fails to act independently,” he said. “Oversight of the city’s construction industry hinges largely on trust while authorities rely on consultants’ judgement.”
He added unscrupulous consultants may undercut rivals to secure consultancy contracts and subsequently collude with contractors to exert control over renovation projects.
After interviewing the nine shortlisted contractors alongside members of the owners’ committee, Will Power told residents in an October 2023 presentation that all nine had unblemished criminal and civil records. It ranked Prestige as the top priority, and listed the others as second for residents to vote on.
However, court records show Prestige has been successfully prosecuted 22 times by the labour watchdog over multiple years, mostly for workplace safety breaches.
Will Power said at the time that the information was compiled based on materials submitted by bidders, and that it bore no responsibility for verifying them.
High bar for bid-rigging prosecutions
The Competition Commission is the statutory body charged with enforcing Hong Kong’s Competition Ordinance, which prohibits bid-rigging.
Prosecutions, however, have proved difficult, as links between companies alone do not constitute an offence.
Between 2018 and 2022, the city’s anti-graft agency received 31 corruption complaints involving bid-rigging but made only one prosecution. No data are publicly available from the police or the commission.
Chiu said bid-rigging syndicates often submit bids or stay out of tenders together, but such behaviour alone does not breach the law. Proving an offence requires evidence of scheming to fix prices or share markets, he added.
“Such agreements are rarely set out in writing or signed,” he said, emphasising that requiring contractors to disclose business or personal interests to rival bidders would help strengthen oversight.
According to the commission’s website, bid-rigging can take various forms, including the submission of artificially high bids or bids containing unacceptable terms. The commission has been approached for comment.
