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Construction Practice

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asked on Aug 8, 2016 at 15:03
by   the_confused
edited on Aug 8, 2016 at 15:06
by   the_confused
A developer called Company A enters into contract with a contractor called Company B. Company A previously appointed Project Exec to handle coordination works with the subcon, architect, engineer and other consultants. 

Company B (Contractor) offers monthly allowance to the Exec which was told as coordination fee or runner fee by Company B. Company B mentioned that the monthly allowance will be issued using Company C cheque which is not entering into contract with Company A. According to Company B, the transaction will be placed as Site Management Fee under Company C.

The Exec job scope does not involve the scope of a Site Supervisor as he does not have any engineering background. The Exec has continuously rejected the offer but the subcon insisted. The Exec decides to resign as he is not feeling comfortable. 

Will the Exec be turned into a scapegoat if there is any dispute? 
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7 Answers

answered on Aug 8, 2016 at 16:00
by   BusyBee
This issue has already been answered before although not professionally but practical approach.

In the construction industry, there are a thousand ways of making ppl scrape-goat-ees. (minus the jangkut)

well, under company C, you can also pay me here as sub legal consultant on a monthly retainer fee till end of the project.

Whether the Income Tax department accepts such an accounting entry is at their prerogative.
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answered on Aug 8, 2016 at 17:21
by   the_confused
edited Aug 8, 2016 at 17:23
by   the_confused
BusyBee, thanks for the answer
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answered on Aug 8, 2016 at 17:57
by   jeff005
edited Aug 8, 2016 at 18:05
by   jeff005
@ the_confused

Personal views

Will the Exec be turned into a scapegoat if there is any dispute?
What sort of dispute is at stake?
Is the exec working for Co. A?
Anyone can be a site supervisor with appropriate working experiences.
Site Management Fee can refer to management of human resources and project schedules coordination
None of the above requires paper qualification unlike like designers who have strong responsibilies and required to sign.
Company A can be the main con, even be subcon or subsubcon.
Company B can be even lower down the line.

a contract have been entered between A & B.
C is just a dummy to window dress accounts by B.

For contracting purposes, what ever is paid(extra), just absorb into Com A and issue a VO out to cover their back_side. Get the accounting ppl to work their brains out to resolve this entry.

These are common issues in construction industries and ways of window dressing their accounts.
The Exec should be a good worker (work with dedication and responsibility and with fairness) and can "control" the people in Com A. As such, such "offer" is on a prudent approach so as to get him/her more committed in the course of work.

And this is just personal views (non legal)
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answered on Aug 8, 2016 at 18:04
by   the_confused
edited Aug 8, 2016 at 18:05
by   the_confused
I think if the subcon issues the payment as Site Management Fee, the subcon is actually protecting itself from being sued as offering 'corruption', is it correct under this perspective?

But in fact, there might be no corruption involved when the job scope was not related as there is no motive.. Am I correct to say that?
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answered on Aug 8, 2016 at 18:13
by   jeff005
There is no corruption if com A is aware and protect the interests of his own executives.

Personally I feel that it is just window dressing of accounts and for the project to carry on smoothly.

Look at the possibility of other workers of Com A, who maybe/are of sub standard at their work and the need of the Exec to exert his authority without fear.
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answered on Aug 8, 2016 at 18:19
by   jeff005
edited Aug 8, 2016 at 19:14
by   jeff005
Monetary or hampers or holidays offers to the accounts dept to speed up payments is corruption. And they are not related in the project.

Corruption is very subjective and have vast definitions.
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answered on Aug 8, 2016 at 18:24
by   the_confused
Thanks, Jeff..

The executive have informed his director (Company A) on the issue..

It was his first time involved in such a matter.. Despite many rejections of the offer, the subcon insisted.. So the executive informs the director on the issue..

Thanks for all the advise.. 
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