15 February 2002
Steering Committee to oversee KPMG investigation
 
The Chairman of the Kowloon-Canton Railway Corporation (KCRC) Michael Tien announced today (Friday) the formation of a Steering Committee to oversee and guide the KPMG investigation into the Corporation’s tender evaluation and contractual performance monitoring systems in connection with the West Rail Telecommunications System contract (DB-1500) and 27 supplemental agreements.
Mr Tien said, "In view of some recent comments suggesting that the KPMG investigation might involve a conflict of interest, KPMG had already pointed out the investigation will be handled by its Forensic Division which is organisationally and physically segregated from its audit team.
"KPMG has indicated that it will follow its normal practice to establish firewalls to safeguard the independence and confidentiality of this investigation.
"The Corporation has accepted that there would not be a conflict of interest. But, in the light of these comments the Corporation has decided to take an extra measure to enhance the independent nature of the investigation by way of forming the Steering Committee, " he said.
 
The Steering Committee will be chaired by Mr Tien with the following independent members:
"KPMG has indicated that it will follow its normal practice to establish firewalls to safeguard the independence and confidentiality of this investigation.

•               Sir John Swaine, Senior Counsel and a former President of the Legislative Council;
•               Professor Lee Chack Fun, Professor (Chair) in Geotechnical Engineering and Pro-Vice Chancellor, University of Hong Kong;
•               Mr Thomas Brian Stevenson, a senior accounting professional and a former President of the Hong Kong Society of Accountants; and
•               Mr Denis George Levett, a senior quantity surveying professional and a former Chairman of the Royal Institution of Chartered Surveyors, Hong Kong Branch.

 
The role of the Steering Committee is:

•               to oversee and guide the KPMG investigation;
•               to ensure that the KPMG investigation covers all aspects of its instructions; and
•               to study KPMG’s reports, and in the light of KPMG’s findings and recommendations to recommend acceptance of the recommendations or alternative actions to the KCRC Managing Board.

Mr Tien said the appointment of these non-KCRC members, who are well-respected senior members of their professions, will ensure the independence and impartiality of the investigation.
Mr Tien added that it remained his hope to see the KPMG investigation completed in eight weeks.