The incident is raising public concern about how Hong Kong authorities had missed telltale signs of a scam amounting to nearly US$7 million.
Hong Kong police said on Aug 18 they have arrested two people over a suspected scam involving a water supplier that may have cheated the government in a contract worth nearly US$7 million.
A company named Xin Ding Xin won a deal in June to provide 1.88 million bottles of water which would go into dispensers in some government offices – the first time such a contract went to a Chinese brand, according to local media.
But police said the firm was found to have relied on false documents during the tender process, claiming to source its water from another mainland Chinese supplier when in fact they had no business ties.
Officers arrested a 61-year-old man and a 57-year-old woman for fraud on Aug 17, seizing around 2,600 bottles of water in a warehouse along with documents and electronic devices.
The arrests have prompted water-cooler discussions across the Chinese finance hub on how bureaucrats missed the telltale signs of a scam when awarding a 36-month contract worth HK$52.9 million (US$6.8 million).
Payment for the delivered batches has not yet been settled, according to police.
The Government Logistics Department said on Aug 18 that it terminated its bottled water supply contract with Xin Ding Xin, as well as “three other contracts for supply of chemicals which were affiliated with XDX’s owner”.
Source: https://www.channelnewsasia.com/east-asia/hong-kong-water-scam-fraud-5301786
