The ICAC has arrested 39 people, including an Urban Renewal Authority assistant manager, for alleged bribery and fraud involving compensation totalling about $10 million over several redevelopment projects.

Also arrested in the operation, which started Friday, were a company director, an estate agency proprietor, six flat owners and 30 suspected bogus tenants. During the operation, $76,000 in cash, believed to be bribe money, was seized.

The investigation arose from a corruption complaint, alleging a company director might have offered advantages to an Urban Renewal Authority employee for classified information on redevelopment projects.

Inquiries found the arrested company director allegedly offered $270,000 in bribes to the authority's assistant manager. In return, the letter allegedly provided the company director with classified information on six redevelopment projects between July 2002 and last October.

Defrauding compensation

It was suspected that with the classified information, the arrested company director and the estate agency proprietor had acquired or rented properties subject to the authority's resumption, with a view to defrauding compensation. The arrested company director and the estate agency proprietor were also suspected to have recruited a number of people to acquire or rent some of these properties.

It was alleged that upon receiving the authority's compensation, the flat owners or suspected bogus tenants would keep part of the money as rewards, and surrender the remaining amount to the company director and the estate agency proprietor.

As a result of the fraudulent scheme, the syndicate allegedly defrauded the authority of compensation totalling $10 million.

The authority has rendered full assistance to the ICAC investigation. The arrestees have been released on bail, and inquiries are continuing.