Mask supplier hit with $100m suit over alleged conTop News | Wallis Wang 26 Jan 2021
A mask supplier and its director have been sued by the Government Logistics Department for nearly HK$100 million in compensation over a suspected scam.
In March last year, the department ordered 32 million masks - claimed to be produced in Japan - from Global Party, spending almost HK$100 million.
But the government later found that not all of the masks were produced in Japan.
It was reported that many of them were nonmedical masks from the mainland.
The department filed a writ to the High Court on Friday, demanding the Hong Kong-based company return around HK$97.75 million that it has paid.
It sued the company and its director Lau Kwan-ming, demanding compensation for "fraudulent misrepresentation" in the contract.
The government demanded the court declare four contracts with the company rescinded as per a letter sent by the director of government logistics, Mary Chow Shuk-ching, on August 31 last year.
The department said last September that all the masks were still in its stock and had not been distributed to any department.
Before the department signed the contracts with Global Party, the company provided testing reports of the masks, production information and letters from the mask manufacturers as quality proof.
The department did not find any quality problems when conducting random inspections of the masks.
But when media reports emerged last August claiming the masks were nonmedical ones from the mainland, the department reported the case to customs.
Customs subsequently confirmed that most of the masks were not produced in Japan, as the company had claimed.
Customs officers searched the mask supplier's offices in Cheung Sha Wan and Kwai Chung and arrested a 39-year-old male director of the company.
A 47-year-old female director of a logistics company who was involved in the case was also arrested.
Both have been released on bail pending further investigation.