The Zhitong Finance App learned that the Hong Kong Independent Commission against Corruption launched an enforcement operation codenamed “Lightning” at the beginning of this year to smash an illegal group suspected of defrauding government funding under “technology vouchers” by soliciting puppet applicants and setting up shell companies. After thorough investigation, the ICAC formally sued five heads of technology service providers and shell companies on the morning of October 16. The charges were all conspiracy to defraud. The case was arraigned in the Eastern Magistrates' Court in the afternoon of the same day.
According to the announcement, defendant Kan Cheuk-kuang, 36, a technology service provider, was charged with four counts of conspiracy to defraud, in violation of common law; the other four defendants in the same case were each charged with one count of conspiracy to defraud. They were three shell company heads, Lai Hou-hei, Leung Ho-yin, and Cheung Dun-cheung, and intermediary Wu Ruiqi, who were between the ages of 31 and 49.
The charge alleges that between October 2019 and January 2025, Kan Cheuk-hong conspired with the four co-defendants to defraud the Innovation and Technology Commission and the Hong Kong Productivity Council, falsely claiming that several companies were eligible to apply for “technology voucher” funding and appointed three companies under Kan Cheuk Hong to provide services and pay for services, thereby inducing the Innovation and Technology Department and the Productivity Council to approve relevant applications and distribute funding. The applicant company involved in the case was founded by Lai Hou-hei, Leung Ho-yin, Cheung Dun-cheung and their family and friends, or was introduced by Ruiqi Ng. The amount of funding involved was over HK$1.6 million.
According to information, the “Technology Voucher” scheme aims to fund local enterprises to use IT to enhance their competitiveness. The Innovation and Technology Department is responsible for implementing it, and the Productivity Council will act as the secretariat from 2021. The scheme uses a matchmaking model. Government funding is up to three-fourths of the project cost. Each enterprise can approve up to six projects, with a cumulative funding limit of HK$600,000. Applications were discontinued at the end of 2024.
The ICAC revealed that the investigation stemmed from suspicions raised by other cases. The Innovation and Technology Department and the Productivity Council also detected multiple applications from service providers when reviewing applications and took the initiative to report them. After investigation, the ICAC discovered that several technology service providers involved involved involved involved about 470 suspected problematic applications, with funding amounts over HK$100 million. The ICAC carried out the “Lightning” operation and made early close ties with the Innovation and Technology Department and the Productivity Council to successfully block the approval and disbursement of nearly 90% of the funding, or HK$94 million.
The Innovation and Technology Department and the Productivity Council provided full assistance to the ICAC during the investigation. The ICAC said that the relevant corruption investigations are still ongoing, and it is not ruled out that the defendant will be charged with other charges and other persons involved in the case will be prosecuted.
An ICAC spokesman reiterated that in the face of any corruption to defraud government funding, the ICAC must “not be soft” to crack down on criminals and has been cooperating with the innovation and technology industry to enhance its ability to manage integrity and prevent corruption. In addition, the ICAC will launch the “Corruption Prevention Guide for Innovation and Technology Funding Schemes” to assist funded institutions to enhance their ability to prevent corruption when applying for funding and implementing projects.