Former Vitasoy marketing manager jailed over HK$1.9m ad fraud

A former marketing manager of Vitasoy International has been sentenced to 33 months in prison for deceiving the company into awarding outdoor advertisement purchase orders totalling around HK$1.9 million.

Aged 41, former Vitasoy manager Chan Wing Fung was found guilty after trial on three charges, including two counts of conspiracy to use documents to deceive his principal, and one count of fraud, following an investigation by the Independent Commission Against Corruption (ICAC).  

Co-defendant Keung Tze Ping, 50, former outdoor visibility officer of the marketing department of Vitasoy, pleaded guilty to two counts of conspiracy to use documents to deceive her principal. She was sentenced to nine months in jail, suspended for two years.

At the time, Chan was responsible for approving vendor engagements for Vitasoy's merchandising and outdoor advertising teams, while Keung assisted in obtaining quotations. They were required to secure at least two or three quotes based on the procurement amount. According to Vitasoy's staff handbook, all employees must disclose any potential conflicts of interest and seek written permission before participating in any conflicting business.

The ICAC investigation began after Vitasoy filed a corruption complaint following an internal audit. Enquiries revealed that in January 2016, Chan instructed his girlfriend to establish Why Creative Graphic Design House to handle Vitasoy's orders, without ever disclosing his interest in the company, which he controlled.

Between January 2016 and early October 2019, Chan awarded 39 outdoor advertisement purchase orders worth about HK$1.9 million to Why Creative, with his girlfriend transferring 40% of the profits, totaling over HK$600,000, to him as per their agreement.

The court heard that Chan approved a monthly payment of HK$36,000 to a vendor without his supervisor's authorisation, falsely claiming the fees were for inspections of Vitasoy’s outdoor advertisements. When asked by Vitasoy for quotations from three vendors, including Why Creative, Chan conspired with subordinates, including Keung, to forge 30 sets of quotation documents from four vendors and created 38 inspection reports to mislead the company into believing the procurements complied with policy and that inspections had been completed. 

Meanwhile, ICAC investigation revealed that the four vendors had never issued the quotations concerned and the relevant vendor had not conducted the inspections mentioned in the inspection reports.

In sentencing, the deputy judge reprimanded Chan for premeditated crime and failing to declare his conflict of interest, noting he undermined the company's interests for personal gain of over HK$600,000, justifying a custodial sentence. The judge also granted the prosecution's request to confiscate Chan's crime proceeds of HK$600,000, ordering him to satisfy the confiscation within six months, or face an additional 19 months in prison.

MARKETING-INTERACTIVE has reached out to Vitasoy for a statement.

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