Bungs, bribes and business

Jim Morgan in Hong Kong explains when graft can be a judicious move - and when it can land you in gaol

Jim Morgan in Hong Kong explains when graft can be a judicious move - and when it can land you in gaol

The subject of corruption is a touchy one, not least because if you get something wrong in print, you might be discovered floating face-down in the harbour the following week. Corruption exists wherever money is to be found - think Mafia, think governments, think professional sport - but Asia has a very special flavour of corruption, as spicy as a Thai curry and as fascinating as stinky tofu.

It starts small. In some countries, even the police are openly on the take. An ex-colleague who now lives in Thailand owns a car. He keeps a stash of 500-baht notes in his car for 'speeding ticket avoidance'. Sometimes he gets stopped even when he isn't speeding, but it's far easier to cough up a tenner and be on your way than to stay there arguing for a couple of hours. Paying bribes is probably a dumb thing to do from a Pavlovian point of view - stop car needlessly, get money, stop more cars needlessly - but there you go. This sort of thing also occurs in the Philippines and, I imagine, in Indonesia, but not in Hong Kong or Singapore, where they'll probably lock you up for trying. Plus, they don't take baht.

Raising the bar a little, consider the great art of the business kickback. If you believe all you read, this is done in the West by payments to Swiss bank accounts. In Asia, you can be much more creative. I've heard tales of companies exchanging goods or services in what appears to be a legitimate way until you realise that the two people who arranged the deal are both raking off a substantial commission. Welcome to kickbacks Asia-style. It's legal as well.

All over the world, the links between government and business are strong; in Asia, it's just a lot more open. Tung Chee-wah was a shipping magnate before he took over as Chief Executive of Hong Kong. Sure, he stepped down from his shipping business, but who replaced him? His brother.

And take the recent Cyberworks project, a government initiative to turn Hong Kong into Asia's most wired city, which was awarded without going through the usual tendering process, ostensibly because it would take too long. So who did it go to? Richard Li, son of Li Ka-Shing, one of the richest men in Asia.

All this isn't so unusual - after all, business is business, the world over - but Asia has another trick up its sleeve in the shape of Triads, who, among other activities, run extortion rackets. In Hong Kong, their spiritual home, an estimated 10% of the cost of any construction work goes to the Triads, as they control the workforce. Putting up a building costs billions of dollars, so this isn't chickenfeed. There are also protection rackets along the lines of "pay up or risk an 'accident'", normally aimed at local businesses, especially in the entertainment industry.

Now the Triads are becoming aware there's big money to be made by migrating the extortion business to the online arena, and there is talk of them getting into hacking. It's really not that great a leap from telling a cornershop it may not get deliveries to telling an e-commerce site it might have a denial-of-service attack.

So what advice can I possibly give to those of you coming from a more straightforward business background and wishing to make headway in the business battlefield of Asia? First, learn the rules. Second, play within them. And third, don't get caught.

Jim Morgan is CTO of Nav Ltd

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