Pouring over the facts: what is behind Hong Kong’s water procurement scandal?

Hong Kong police have arrested a married couple suspected of being at the centre of a rapidly unfolding controversy surrounding a HK$52.9 million (US$6.8 million) contract to supply drinking water to some government offices.

The pair allegedly defrauded the government and are suspected of breaching the Trade Descriptions Ordinance by providing false information about the product manufacturer.

The unprecedented fiasco over the contract, which was among the first of its kind awarded to a mainland Chinese company in June, has raised questions about the government’s tendering process and how due diligence is conducted.

With a criminal investigation and official probe under way, the Post breaks down the nature of the scandal and the questions that remain unanswered.

What is the company behind the winning bid?

The company at the centre of the controversy is Xin Ding Xin Trade Co Ltd. Founded in 2007 in Hong Kong, Xin Ding Xin is led by director Lui Tsz-chung, who lives in Sai Wan Ho, with shareholder Chan Pik-lam sharing the same residential address.

A search in the Companies Registry shows the firm was originally incorporated as Wellco Investment (Group) Limited before adopting its current name in 2009.