The Competition Commission on Wednesday announced that it's taking action against four companies and three people it believes rigged bids for government-funded IT contracts worth around HK$13 million.

The case centres on 189 contracts issued under the Distance Business Programme, a scheme to help small and medium-sized enterprises during the Covid pandemic, in 2020 and 2021.

The contracts went to two companies, BP/Noble and Yat Ying. The commission alleges that two other companies, Multisoft and KWEK, had submitted cover bids – higher bids for a specific contract which can only be awarded if there is more than one bid – to allow them to win. The commission says these actions represent serious anti-competitive conduct.

"When Yat Ying put in a bid together with Multisoft or KWEK, Yat Ying would always come out to be the winner, and the same applies to BP/Noble... and this sort of [result] we can see it through the 189 applications which we have looked at," said Rasul Butt, the commission's CEO.

The commission added that it found that the people managing the four businesses knew each other, with those at Yat Ying and BP/Noble being a married couple.

"The person who was responsible at Multisoft, he is friends with someone in the other companies, whereas in the case of KWEK, the person concerned – according to our investigation – has received some financial rewards in providing cover bids."

The commission said it had commenced proceedings in the Competition Tribunal against the companies, as well as represenatives of three of the businesses, for allegedly contravening the Competition Ordinance. It said the director of Multisoft had since died.

It's seeking penalties including financial punishments, disqualification for one of the directors, as well as undertakings for the businesses to adopt effective compliance policies.

The watchdog says it's also referred the case to police to investigate possible criminal conduct in the form of forgery and submitting false or misleading documents.