Former Vitasoy Marketing Manager Sentenced for Fraud
A former marketing manager at Vitasoy International has been sentenced to 33 months in prison for orchestrating a fraudulent scheme that resulted in the company awarding advertisement purchase orders worth approximately HK$1.9 million. The case was brought to light following an investigation by the Independent Commission Against Corruption (ICAC).
Details of the Fraudulent Scheme
Chan Wing Fung, 41, was found guilty on three charges: two counts of conspiracy to use documents to deceive his principal and one count of fraud. His co-defendant, Keung Tze Ping, 50, a former outdoor visibility officer in Vitasoy’s marketing department, pleaded guilty to two counts of conspiracy to use documents to deceive her principal. She received a nine-month jail sentence, suspended for two years.
Chan’s role at Vitasoy involved approving vendor engagements for merchandising and outdoor advertising operations. Keung’s responsibilities included obtaining vendor quotations. Company policy required them to secure at least two or three quotations depending on the procurement amount. Vitasoy’s staff handbook also mandated full disclosure of any potential conflicts of interest and required written approval before engaging in any conflicting business activities.
Undisclosed Interests and Fabricated Documents
The ICAC began its investigation after Vitasoy lodged a corruption complaint following an internal audit. It was discovered that Chan had instructed his girlfriend in January 2016 to set up a company named Why Creative Graphic Design House to handle advertising orders from Vitasoy. Chan failed to disclose his interest in the company, which he effectively controlled.
Between January 2016 and October 2019, Chan approved 39 outdoor advertisement purchase orders worth HK$1.9 million to Why Creative. As part of their arrangement, his girlfriend transferred 40% of the profits—over HK$600,000—to him. The court found that Chan had also authorized a monthly payment of HK$36,000 to a vendor without his supervisor’s approval, falsely claiming it was for inspection services related to Vitasoy’s outdoor advertisements.
Elaborate Cover-Up to Mislead Company
When Vitasoy requested quotations from three vendors, including Why Creative, Chan conspired with subordinates, including Keung, to fabricate 30 sets of quotation documents from four vendors. They also produced 38 fake inspection reports to falsely demonstrate compliance with company procurement policies and to suggest that inspections had been carried out as claimed.
The ICAC’s investigation revealed that none of the four vendors had issued the quotations in question, nor had any inspections been conducted as described in the reports. This deception enabled Chan to funnel significant business to a company in which he had a hidden interest, thereby defrauding Vitasoy of both funds and trust.
Sentencing and Confiscation Order
During sentencing, the deputy judge condemned Chan’s actions as premeditated and deceptive, emphasizing that he had failed to declare his conflict of interest and had prioritized personal financial gain over the company’s well-being. The judge noted that Chan’s deliberate misconduct warranted a custodial sentence.
In addition to the prison term, the court approved the prosecution’s request to confiscate Chan’s illegal proceeds amounting to HK$600,000. He has been ordered to pay the amount within six months. Failure to do so will result in an additional 19 months of imprisonment.
Corporate Responsibility and Future Implications
The case underscores the importance of corporate governance and ethical conduct, particularly in procurement and vendor management. Vitasoy has not yet released a public statement regarding the incident, but the company’s prompt action in initiating an internal audit and reporting the matter to the ICAC reflects a commitment to upholding integrity within the organization.
While the incident may temporarily cast a shadow over Vitasoy’s operations, it also serves as a cautionary tale for other corporations to reinforce internal checks and transparency in vendor dealings. The outcome of this case may prompt companies operating in similar sectors to revisit and strengthen their own compliance frameworks.
This article is inspired by content from Adgully. It has been rephrased for originality. Images are credited to the original source.