Company fraud - police or ICAC?

Posted by colgate123 (44 days ago)

Hi all, sorry for the long email but any advice appreciated...

I've discovered my business partner has registered another company and has been informing clients that our existing business is now trading under a new name ie: his new company.

I have pretty solid evidence from the office computers/emails including letters to clients and quotations with his company's letterheads. From the emails its also clear one of our staff is colluding with him (she's the main contact point for our clients).

We also tendered for a large project worth a few hundred k's which my partner later told me was unsuccessful. But now i've found a letter requesting that our original tender be submitted under his company and i have evidence the project was completed.

Does any of the above constitute fraud and is there any difference making a report to the police or the ICAC?

(I am based in Hong Kong)

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Posted by cookie09 (44 days ago)

i don't know the precise answer and sorry about the situation you are in.

however i would say the answer can only be police and ICAC, not police or ICAC. secondly, again no firm answers but i am not sure this is fraud where the police will investigate. i think it's a contract dispute where he did things that were prohibited based on some contracts (employment contract, partnership agreement, etc).

it's a civil lawsuit not a criminal one, my guess, or at least it's a civil one AND a criminal one. in any case get yourself a lawyer!

(I am based in Hong Kong)

Posted by totty chaise (43 days ago)

I don't think this is fraud. It is dishonest, in a moral way, for sure, but I doubt you will get a conviction for fraud in a court.

As cookie said, there may be a breach of contract of some sort, but that is for you to find out. Consider your options before you are going to spend large sums on lawyers' fees.

(I am based in Hong Kong)

Posted by p.mason (43 days ago)

go see an lawyer - looks like breach of fiduciary duty to me. If u r in partnership, you owe each other a duty of the utmost good faith. Trying to steal the business in this underhand way is likely to be a breach. You might need to get an injunction to stop any further breaches. Maybe also be entileteld to an account of profits he has made from previous breaches.

(I am based in Hong Kong)

Posted by colgate123 (43 days ago)

hi cookie, t.c. + p.m., thanks for your replies, you were all correct in some ways. I saw 2 solicitors today and both were surprisingly candid (i guess because they were referred by friends).

The first said its a clear breach of director's duty as p.m. pointed out but due to the way our company was set up (a 50:50 share split) we're in a deadlock - which means the company can't take action against my partner. I'll need to take civil action myself. The lawyer indicated that this would be a long, expensive road and basically told me to swallow my pride and walk away.

the 2nd lawyer said pretty much the same thing but suggested sending him a formal letter outlining the evidence against him and asking for damages to settle the issue. But if there was no response, he also felt there wasn't much i could do legally and that the police wouldnt be interested.

so, taking civil action is too expensive and going to the authorities may be a waste of time, surely there has to be some other way to get justice? In any case, its a lesson learned...

(I am based in Hong Kong)

Posted by cookie09 (42 days ago)

why not set up your own company and try stealing clients back?

(I am based in Hong Kong)