Criminal
judgment regarding alleged violation of regulations against concerted action
by Yen He-yung
Chinese
Taipei
Case:
Criminal judgment regarding alleged
violation of regulations against concerted action by Yen He-yung
Key Words:
to borrow others' licenses; collusive
tendering; construction project
Reference:
Kaohsiung District Court , Decision
(88) Yi Tzu No. 1868
Industry:
Housing Construction Industry (4601)
Relevant
Laws:
Articles 14,
and 35
of the Fair Trade Law
Summary:
- Summary of the public indictment:
The defendants Yen He-yung and Chuang Sung-huan are the responsible persons,
respectively, of Shih Shang Construction Ltd. (hereinafter, "Shih Shang
Ltd.") and T'ien Hsia Construction Ltd. (hereinafter, "T'ien Hsia
Ltd."). Despite being aware that enterprises may not engage in concerted
action, i.e., may not discuss the amounts of their respective tenders prior
to tendering so as to affect the results of the tender or deliberately allow
one party to win, the two parties nevertheless colluded in such actions in
May 1995. Both parties agreed that when submitting their tenders for the first
phase of a construction project for a leisure center for the elderly at the
Niaosung Hsiang Village Hall in Kaohsiung County, the defendant Yen He-yung
would participate in the tendering with licenses borrowed from Ti Jung Construction
Ltd. owned by Ch'en Ch'i-pang, Kao Sheng Construction Ltd. owned by Wang Hsien-t'ang,
and Chien Ku Enterprises Ltd. owned by Hsu Li-ying. (A disposition was made
not to prosecute the three aforesaid construction companies, and is on file.)
Meanwhile, Chuang Sung-huan deliberately raised the price of his tender to
enable Shih Shang Ltd. to win the project. The defendant, for his part, loaned
money to Chuang Sung-huan to pay the tender bond. When the tenders were opened
on May 19, 1995, Shih Shang Ltd. won the tendering with its tender price of
NT$24.15 million. Since the defendant allegedly violated Article 14 of the
Fair Trade Law ("the Law"), it was requested that he be punished
pursuant to Article 35 of the Law.
- Article 2(1) of the Criminal
Code clearly states that if the law is changed after the commission of an
act, the law in force at the time of the decision shall apply; provided, that
if the law in force prior to the decision is more favorable to the offender,
the law most favorable to him shall apply. Although both the amended Criminal
Code and its predecessor adopt the principle of leniency, the proviso in Article
2 of the old Criminal Code applies the lesser punishment, whereas the proviso
of Article 2(1) of the Criminal Code applies the law that is most favorable
to the offender. The latter addresses law as a whole, so the scope of comparison
is broader, and all kinds of circumstances affecting the weight of the punishment
should be taken into account: for instance, accomplices, unaccomplished offenses,
continuous offences, implicated offenses, compound offenses, recidivism, and
voluntary surrender should be taken into account so as to make an overall
comparison of which law is most is most beneficial to the offender and should
be applied.
The original Article 35(1) of the Law stated "where an enterprise violates
Articles 10, 14, 20, or 23(1), the person engaging in the conduct shall be
punished by imprisonment of up to three years, detention, or in lieu thereof
or in addition thereto, a fine of up to NT$1 million." The article was
amended upon the third reading at the Legislative Yuan to read as follows:
"Where an enterprise violates Articles 10, 14, or 20(1), and following
an order issued by the central competent authority pursuant to the provisions
of Article 41, fails within the specified period of time to cease or change
conduct, or to adopt necessary corrective measures, or having ceased the conduct
for a period of time, re-engages in the same or similar conduct, the person
engaging in the conduct shall be punished by imprisonment of up to three years,
detention, or in lieu thereof or in addition thereto, a fine of up to NT$100
million." The amended Law was promulgated by the Office of the President
for implementation on February 3, 1999.
Compared with the original Law, the amended Law imposes heavier penalties,
but also provides for corrective measures. It thus gives the offender the
opportunity to avoid criminal punishment by correcting his actions upon the
issuance of a warning by the central competent authority. Weighing the differences
between the old and revised Law, the revised Law is more favorable to a person
who violates Article 14. Furthermore, although violations of the provisions
against concerted action in Article 14 of the Law are detrimental to fair
competition and economic stability and are subject to administrative dispositions
or criminal punishment pursuant to law, such violations may not be so severe
in consequence as to illicit condemnation or loathing by the general public.
There should usually be no need to resort to the ultimate deterrent of criminal
punishment in cases of such violations.
If the concerted action is the first offense of such nature, there is no need
to impose penalties outright unless the person fails to cease or change his
conduct or to adopt necessary corrective measures within a specified period
of time as instructed by the central competent authority, or unless the person
re-engages in the same or similar conduct after initially having ceased the
conduct. The old Law and the amended Law apply different standards to the
same unlawful concerted actions; punishment should not be imposed on actions
that are no longer subject to punishment.
- The allegations made by the public
prosecutor regarding the aforesaid unlawful actions by the accused were all
admitted to by the co-accused in questioning during the investigation. The
co-defendant Chuang Sung-huan, admitted that he had no intention to participate
in the tender. Yet, to help Yen He-yung come up with the minimum required
number of bidders, Chuang borrowed the tender bond amount from Yen He-yung,
and allowed Yen to complete and mail the tender form on his behalf. The price
tendered by Chuang was deliberately increased so that he would not win and
Yen's company would be awarded the tender instead. Chuang's testimony was
clearly documented during the investigation. Shih Shang Ltd. and T'ien Hsia
Ltd. were two separate companies competing for a project. Yet the defendant
loaned money to his competitor Chuang, and Chuang thereupon intentionally
raised the price of his tender to enable Shih Shang Ltd. to win the tender.
It was thus determined that the defendant and Chuang Sung-huan had a meeting
of minds before they decided on the prices of their respective tenders. In
addition, photocopies of the savings account passbook of Shih Shang Ltd.,
a bank remittance notice, and a check issued are on file as evidence of the
offense.
- Although investigation indicated
that the defendant did indeed commit the alleged offenses, no basis was found
for punishing the defendant, upon taking into account the aforementioned provisions
of the Criminal Code, guiding judgments, and explanations. Upon further investigation,
the court likewise found no evidence to show that the competent authority
issued warnings against the alleged misdeed. Thus, commission of the crime
by the accused party remained unproved, and so the defendant was found not
guilty in accordance with the provisions of Article 301(1) of the Code of
Criminal Procedure.
Summarized by Ch'iu Hsu-fen
Suprvised by Hsu Chao-ying
Appendix:
Shih Shang Construction Ltd.'s Uniform Invoice Number: 85762508
T'ien Hsia Construction Ltd.'s Uniform Invoice Number: 23271031
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