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The Hong Kong government will begin a disciplinary investigation into a multimillion-dollar bottled water procurement scandal involving a dozen civil servants, including senior officials from the logistics department. Christopher Hui, the secretary for financial services and the treasury, said on Monday that the internal probe would also involve senior officials from his bureau, which oversees the Government Logistics Department (GLD). Alice Lau, the permanent secretary for labour and welfare, will lead the investigation, Hui told reporters at a press conference. “From the first look, the probe will involve about a dozen colleagues from the GLD and the Treasury,” Hui added in Cantonese. Speaking at the same press conference, Lau said the probe would focus on the roles and responsibilities of those involved in the procurement scandal. Any misconduct and breaches of government rules will result in disciplinary actions, while those whose performance in the incident fell short of expectations will face administrative measures, she added. “We will begin our investigation immediately,” Lau said in Cantonese. “In the process, we will review relevant documents to identify the individuals involved and request them to make a submission.” The probe is expected to be completed within this year, she added. The scandal surfaced on August 16, when the GLD said it had “partially terminated” a HK$52.9 million three-year contract with bottled water supplier Xin Ding Xin, which it awarded in June. Xin Ding Xin director Lui Tsz-chung and his wife were arrested in the following days over suspected fraud and providing false information to the government. On August 20, the government terminated all contracts with Xin Ding Xin and other firms linked to the company, including a chemical supply contract with the Drainage Services Department and a data entry contract with the Fire Services Department. Carlson Chan, then director of the GLD, publicly apologised over the scandal on August 21 and attributed the blunder to inadequacies in his department’s procurement procedures. Chan was placed on pre-retirement leave last month. Asked on Monday if Chan would be subject to the probe on Monday, Hui said the investigation would be wide-ranging. “The people involved included those on the frontline, in the middle, and at the top. I believe our probe will cover all of them regardless of whether they have retired,” he said. On Monday, the government also published an audit report, which was conducted by a task force Hui set up in August in the wake of the scandal to review public procurement procedures. The report “revealed that the perceptiveness and alertness of the relevant officers in conducting due diligence checks and addressing potential fraudulent acts… were obviously below reasonable expectations,” Hui said. Based on the audit report’s suggestions, the GLD has implemented six measures to improve the procurement process, including specifying requirements on due diligence checks and revising terms and conditions of government contracts to enhance the department’s power. The department will also build a “culture of ownership” to ensure that GLD staff fully execute the procurement requirements.
