Case 2:	Offer of Commission

Offer of Commission

A luxury goods retail company earns its large portion of income from group tourists.  Facing increasingly fierce competition, the Chairman of the company offered commissions to tour guides employed by various travel agencies to induce them to bring the group tourists to patronise his company’s showrooms.  To conceal his act, the Chairman channeled the company’s money to another company set up by himself, and distributed the commissions, amounting to millions over several years, through the latter.  
The travel agencies concerned did not know that their employees had been receiving commissions from the retail company, nor did they permit employees from receiving commissions from merchants.  In defending himself during prosecution, the Chairman of the company claimed that offering commission to secure referral of clients was a norm in the industry.

Offences Committed

The tour guides, as employees of the respective travel agencies, were agents of the latter.  The Chairman of the retail company offered advantages (i.e. commissions) to them as an inducement for arranging group tours to his showrooms, which was an act related to their principal’s affairs.   As the travel agencies did not allow their employees privately accepting commissions, the Chairman contravened Section 9(2) of the POBO.  The tour guides who received the illegal commission also violated Section 9(1) of the POBO.

Case in Perspective

The Chairman was prosecuted and received a jail term of several years.  In sentencing, the Judge said that custodial sentence was imposed because the offences committed were serious and had lasted for a long period of time.  

As stipulated in Section 19 of the POBO, industry norm or practice cannot be used as a defence for accepting/offering bribes.  As long as the recipient’s principal does not give permission for his agent to accept the advantage, both the offeror and recipient will commit the offence.  
With hindsight, if the Chairman wishes to offer commission in return for referral of clients to his shops, he should ascertain whether the recipients have obtained their principal’s permission to accept the commission under the circumstance, or enter into contractual agreements with the travel agencies and offer the commission to the agencies instead of individual tour guides.