Episode 6 - Steve Vickers

This time around, our Senior Partner Colin Cohen meets Steve Vickers, the man known as Hong Kong’s “Mr Risk”. After serving as a senior officer in the Royal Hong Kong Police Force, where he led anti-triad operations and resolved numerous kidnapping incidents, Steve transitioned to the world of business. He is founder and CEO of Steve Vickers and Associates, a risk mitigation, corporate intelligence and security consulting company.

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Host: Colin Cohen
Director: Niall Donnelly
Producer and VO: Thomas Latter

Established in 1985, Boase Cohen & Collins is an independent law firm equipped with Hong Kong knowledge and global reach. Please visit our website. 

Transcript

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[00:00:40] Collin: Steve, it's a great pleasure to welcome you to Law & More. It's always good to see you. How's life been treating you recently.

[00:00:48] Steve Vickers: It's been a little difficult, like everybody else. I run a regional business and have five regional platforms. I haven't been able to visit any of them for the last 14 months. We've learned to telecommunicate and auto-rotate and many other things, but yes, it's been difficult. Businesses isn't bad, but it's just the peculiar difficulties we find ourselves under in Hong Kong at the moment.

[00:01:08] Collin: I want to have a little chat with you about your long and distinguished career here in Hong Kong. And you arrived in Hong Kong in 1975 and you joined the Royal Hong Kong Police Force. As it was then known at that time. I'm very interested in to what really brought you here. What made you join the police force?

[00:01:29] Steve Vickers: It was a good idea at the time. I'd been mountain climbing in North Wales, in January where it was really very, very cold. And somebody suggested to me it's less cold in Hong Kong, which I actually thought was somewhere near Japan. So I signed up on the bottom line and I ended up here in Hong Kong, February 75, where things were a little different, we just got the cross Harbor tunnel, which had just been opened. It was a completely different world, a completely different town.

[00:01:54] Collin: When you first came here as a police officer, what were you doing? Were you in investigating or you're just on the beat?

[00:02:00] Steve Vickers: I spent traditional few months doing that, but I quite quickly moved into investigative stuff. I spent a lot of time in regional crime squad, late seventies or the seventies up to the eighties was a time the ICAC had taken over and done a good job, things were cleaned up.

I was fortunate to join at a time when you were allowed to get out there and do things. So at a younger age, perhaps than normal, we had a go at some rather embedded targets like triads and the rest. And it was quite a colourful time. Obviously, the end of the Vietnam war was 73-74, lots of guns and things drifted down from there.

And then from the abolition of the Chinese Axillary Army, which also released a lot of other weapons. So seventies, eighties, nineties where actually Hong Kong was a lot more, I would describe as sporty than it is now. When the corruption went completely as it did it left a bit of a gap.

So one of the very good things that ICAC did was to leave a bit of a gap. The triads moved into the gap and we found ourselves engaged in some fairly ugly battles against Triad organizations who stepped in to fill the void in various places.

So it was quite a colourful time, an interesting time. There's a lot going on.

[00:03:37] Collin: Yes, because I remember when I first came out to Hong Kong, I was in criminal work. Some of my good clients were acting for people from the Triads. And I was educated through the other side. But anyway, after 18 years, you became head of the criminal intelligence bureau. Which is right up there at the top. Tell us a little bit about your experience at the time especially dealing with Triads. I'm interested in that.

[00:03:58] Steve Vickers: Well, I guess I spent the last six years running the intelligence bureau and we had sort of three pieces. One piece was agent handling so that we'll be running undercover agents inside Triad societies trying to determine what they were up to, who they were dealing with and to knock things on their head a little earlier than letting them happen.

So that was the primary division. I had a separate major division, which was the analytical teams that would look at strategic problems such as, boring though it may sound, fish markets and meat markets and other places where organized crime bump up the cost the Hong Kong punter by control and by exercising control over permits.

And then looking at things like public light buses, the green ones are okay. The ones with the green roofs, because they go from MTR root to MTR root. The red ones were formed during the 67 riots, or the idea for them was formed during the 1967 riots. The idea being that a lot of people had gone on strike from the left-wing unions and the government decided we better put some more buses on the street.

And that will solve the problem. Well, it didn't, it created lots and lots of buses that wanted to drive. Everybody wanted to go from Central to Western, but nobody particularly wanted to go to the other side of the island. Nature abhors a vacuum, so the triad stepped in and started to control the PLB routes.

So if you wanted to drive between Central and Western, for example, you had to have a sticker in your window indicating that you've made an appropriate donation. And if you didn't, you'd very soon have a problem. That's the sort of lower level. At the bigger level, we made a big effort to try and get Government to recognize that Triads are a real threat.

Today that's not happening. But we had a thing called a fight crime committee.

[00:05:08] Collin: Yes, Yes, I remember that.

[00:05:10] Steve Vickers: And there was a Triad renunciation scheme, which was a way so that you couldn't be black for life. There was a way where you could go in front of a judicial process and actually say, look, I did join. I want out. I'd like it registered that I want out. And that would be a way of avoiding this for the rest of your life. That was very effective. We had a working group on gangs and we used to run undercover operations, electronic operations, penetration. And not just to prosecute them because prosecuting is helpful, but destabilization is better.

When you make their lives miserable, I used to wander around Tuen Mun. Handing out letters and descriptions of what the Sun Yee On did in collaborating with the Japanese during world war two. Which again, at the time, didn't do their image much good when they were controlling the movie industry and Hong Kong.

[00:05:55] Collin: And of course you do speak Cantonese. So I think it would be difficult to go to Tuen Mun without being able to talk to people.

[00:06:01] Steve Vickers: It is helpful. Yes, it is helpful.

[00:06:03] Collin: Nowadays, the Triads were a big issue and they were an issue when I came out here in 81. Certainly were of great influence today. I know you haven't been in the Police Force for some time, but are they under control today. Obviously, we hear recently there was that incident where they had a private boxing fight with their own fight club and somebody, unfortunately, got killed. Are they still there?

[00:06:23] Steve Vickers: Oh, the Triads are very, very powerful. What happened of course, in the last 10 years that gave them the impetus and the oomph was Macau. Of course, the huge growth in Macau gaming junkets largely run between Macau and Hong Kong facilitated their massive organized crime, Bonanza with some of the well-known Hong Kong Triad societies running Junkets. moving billions of dollars across the border. Bearing in mind that it's actually illegal for a Chinese citizen to move more than a very modest amount of money from the mainland to Macau. Yet the official government statistics will show you that at its height. Five years ago, 43 billion US dollars equivalent, moved across the border.

That's quite a lot of money. It was facilitated through classic methods, false transactions, bag loads of goodies all sorts of colourful methods. So this was a period of time where Triads made a vast amount of money. And ironically, the crime went down a bit. You can always tell a classic organized crime. When everyone's doing well, it's bad for business to have crime in the street. As you described just now the punch up between that particular society that's to me, normally, a sign of things not being too good, the government used to be annoyed with me, but I was always quite happy when they would fall out with each other because at least we could see nobody was in absolute control.

[00:07:42] Collin: When I first came here, in the early eighties. Sundays used to be always illustrated by the Heists in the jewellery shops. One of the well-known famous jewellery shops in Queens Road Central is subject to guns, hold-up and substantial amounts of jewellery and watches taken away.

Were you involved in that? And dealing with that area?

[00:08:00] Steve Vickers: That was one of my primary occupations if that's the right description. But again, economic factors, things weren't so good on the mainland. Heavy, easy availability of firearms. As I say again, the disbandment of the militia plus the surplus from the Vietnam war. All sloshing around Blackstar pistols, 7.62 calibre pistols were available for a few thousand dollars.

You could buy 10, you get a bonus one. So it took us a while to work out how to take these people on. And what we did, in the end, was again, infiltration, electronic operations. And then we hit them quite hard quite regularly until they stop coming. But it was a tough period of time.

They didn't just bring firearms. They also brought hand grenades. We've had people loosing off AK-47s in the streets of Kwun Tong. So it was a somewhat sporty period of time, but we did manage to sort it out and clear that up. And we go through a whole series of methods.

One was good intelligence work. Two was being quite tough with them. And three was good cross-border liaison, which also helps. So if you get intelligence that they're coming and that there's a problem, you can do something about it. You can't do much 10 minutes after it's happened.

[00:09:03] Collin: Another area which is interesting is the kidnapping. I mean, that also used to be quite a common occurrence in Hong Kong, Eighties into the early Nineties, and it seems to be very well organized. And of course, you are involved in one of the very, very, very well-known cases.

Having been kidnapped twice, the Teddy Wang matter. Can tell a little bit about that?

[00:09:21] Steve Vickers: A lot of people came down from the mainland in the Sixties and Seventies and made money in quick-hit ways, not all of them, but many. And some of them had unscrupulous friends or friends that hadn't done well or that they hadn't shared the wealth.

And as these people became more prominent and more visible and more ostentatious in the media, they became targets. I'm not going to name them, but four or five of Hong Kong's better-known magnates all suffered from their children being kidnapped. Typically the goal would be to take a child.

I did 28 kidnappings over the years with 26 back alive. In All of them, they were males. I don't think I ever did a single case involving a female kidnapped victim. Now you say that's a very chauvinistic situation, but I don't know whether people will pay for their wives that doesn't appear to be the case in Hong Kong.

In most of the cases, they will be children. Most cases they would always be boys. And in most cases, they will be taken either outside of school or on their way home from school. In most cases, somebody in the household establishment, whether it's a former driver or somebody with whom they'd have business dealings was involved in the matter. In the cases moved from smaller single jurisdiction cases, which were not easy, more actionable to many cases which were cross-jurisdiction involving international money transfers. So that the victim would be taken here, moved out of Hong Kong and moved across the border demands might come from a third location. And the payments may be.

Another. So I'm not clever, but I did have an opportunity to work on quite a lot of these. So after a while, you developed a methodology which is appropriate to dealing with them. And the primary goal is to get the victim back alive first and then deliver vengeance to those involved later.

[00:11:05] Collin: The Teddy Wang one was of interest because I had an involvement in that because I met the individual concerned who he was in prison in Pentonville with another client of mine, and he got Extradited back. And the interesting thing about that, he was just the small potato of a lookout, and he honestly knew nothing about anything else than what it was involved in.

He was just told to do A, B, C, and D. He never knew who was even given his instructions to. And just to delivery. And to follow before they were able to take him out.

[00:11:35] Steve Vickers: Well of course that case was very well designed. The brain behind it was a serving Taiwanese intelligence officer, a guy called Chan. He belonged to the Taiwanese MJIB, which is the political side of the Taiwanese equivalent of the FBI. So he sat at the centre of it. And then the people who snatched the victim were one team, they were unconnected to the people that kept him, who or another team, who were in turn unconnected to the team that were making the ransom demands, that was another team. The idea was from the bad guy's point of view at least, to set it up as a cell structure. To make it difficult for us to intervene with. It took a while, we got them through means that I'm not prepared to go into even now largely were electronic at least to get our first flavour

Once we got a first flavour, we were able to keep an eye on them and then work out who's who. But had we intervened earlier, we wouldn't have got anything, because it was a team in a complete cell structure. So that was highly difficult. In the end, we recovered, I think 95% of the ransom money. But not Teddy, who had been dumped over the side.

[00:12:39] Collin: If you had today's technology and today's abilities with how investigations, much more sophisticated, would you have been able to achieve more at the early times? What do you think?

[00:12:51] Steve Vickers: We did pretty well, our clean up rate was very good. We got nearly everybody back alive. The Teddy Wang second case, to my mind, was highly suspicious. And to this day, I believe the Taiwanese gentlemen concerned had more than one agenda. And I don't think the intention ever was for Teddy to come back.

I recently was asked to give the modest lecture at the police detective training school here in Hong Kong on the subject of kidnap and ransom. So some things have changed completely. I mean everybody walks around with a mobile phone and therefore you're bleeding information, as you go. But the clever operators will not be walking around with a mobile phone, leading information. And there'll be very cautious about the world of CC TV, is omnipresent. But again, people who know how to operate, well-trained ones can avoid it.

[00:13:33] Collin: Well, after a very distinguished career and after 18 years, you decided to move into private practice. Why.

[00:13:40] Steve Vickers: Well, I'd done 18 years. It was already halfway through 1992, I could see things were going to change. And I thought, perhaps it's a good idea to get ahead of the curve. Through some of the international work I'd done, I met various people. I ended up being recruited by a large American outfit to run their Asian business.

So I said, okay, I'll give it a go. And I set up offices, I set up Japan, Singapore, the rest of Southeast Asia, Beijing, and Shanghai, and down as far as Australia. And I did that for seven years, it was quite interesting. Mostly doing commercial work, I've never done a criminal defence case in my life.

But I do work, but clearly, civil stuff is fair game. And I've done quite a few private sector kidnappings since then.

[00:14:21] Collin: So now after working for this well-known established investigating company. You established Steve Vickers and Associates. Tell us what you do and what you're up to at the moment, the main characteristics and the main objectives of your company.

[00:14:34] Steve Vickers: There was something in between, I did actually.

I joined PricewaterhouseCoopers. So I became the only non-accountant, you could say I was the only madman in the asylum or the only sane man in this island. And I built PWC a risk business in Asia and China. And I run that for, I think, two and a half years, largely focused on fraud and assets searching over big civil cases or criminal cases, it was very interesting. And then a little case happened in America called Enron.

[00:15:00] Collin: Yes.

[00:15:01] Steve Vickers: And they've passed a law called a Sarbanes-Oxley, which meant that big accounting firms could not do auditing and consulting.

You either had to be a Fox or what have you, the other thing? So I was fortunate, I did a Management buy out and I bought out that business because PWC were not going to get out of the audit business. On a very friendly basis. And I set up an outfit called international risk, which I ran for.

For some picky reason, I couldn't call it PWC anymore And I ran it as international risk for seven years. We were quite big, I think we had 11 platforms around Asia, as far as Australia. And that went very well. Eventually, I sold that to another large international organization listed on the New York stock exchange.

I then worked for four years, three months and 92 nanoseconds with them I honoured all my no competes, no solicits, and I retired. I went down to Penang, I retired for two days. I went to the gym, rearranged my stamp collection and came to the conclusion, perhaps this wasn't for me.

So I decided I would set up SVA as a very small organization, I promised myself that I wouldn't hire lots of people. Then by osmosis, I proceeded to hire lots of people and that's the history of where I am today.

[00:16:12] Collin: I read with great interest your analysis on political risks and other matters. And one of your main areas is advising people as to the risks for difficulties, and to sort of give the heads up to advise companies as to what steps they should be taking.

And Hong Kong has gone through some very interesting times. One of the areas, which I found very interesting what you were doing, is when you gave advice to the private sector. In particular with what we call our 2019 troubles or protests, whatever way you like to call it, I'd like to get your call as to exactly what you were doing.

How you perceived that unique characteristic, which has never, ever happened in Hong Kong before.

[00:16:50] Steve Vickers: Spot on, good question. Just to answer your question about what we do. I have three divisions. One does business intelligence, which is political risk, as you describe it. Good old fashioned due diligence into IPO's working for the sponsors, for example. deals where someone is doing something with someone unfamiliar. And would like to know hard reality behind the balance sheet.

[00:17:10] Collin: Well in short to help our listeners here, you would find out whether there were real skeletons in that cupboard.

[00:17:16] Steve Vickers: Indeed, and as it relates to IPOs, Hong Kong has a great opportunity to deal with mainland IPO's. But we also have huge risk because not all that glitters is gold. I'm afraid there has been a dilution of the quality of due diligence by sponsors into IPOs. So yes, we'd have a good look, we'd start with the prospectus, good old fashioned stuff. We look and see how real that looks. We'd look at the backgrounds and the reputation, whether the business actually functions the way it says it does, whether the predictions are feasible and likely. And then come back to the sponsors and say, if I were you, I would run before you take this. Or more generally we'd find a grey area, the two that needs to be fixed or declared or disclosed and then move on from there. So that's one division. My second division assists people who have problems with white-collar crime, in particular international assets.

So most of my projects whilst they may kick off in Hong Kong will involve two or three other jurisdictions. So it will chase money and key assets in support of a litigation from a firm like yours or a regulator on this. We also do staff defection cases, so these are quite interesting cases.

So let's say this is when the top five or six people may be in an investment bank, decide that they could do better elsewhere. Maybe their bonuses weren't enough this year. Maybe they think their boss is an idiot and they can do better without him. And typically they then decide to take the client base with them very often by illegally copying data that really isn't theirs, on the criminal side. On the civil side, they breached the covenants that they'd been working under. They visit the office on a Saturday morning and help themselves to what is there and then just disappear.

[00:18:47] Collin: And then you try to put the evidence together, so legal action can be taken again

[00:18:52] Steve Vickers: Absolutely both legal and administrative. Often there is a whole series of things you can do. It typically all starts in the banker's club at lunchtime where somebody hands around a term sheet, offering everybody, while he's still a director of the company, a chance to go. That's probably been typed up by one of the secretaries in the office, on a computer.

Actions are then taken that typically they charge it to their expenses, which is just the more senior they are the worst they are.

[00:19:15] Collin: Exactly, it's amazing how naive people are, how this all happens. But anyway, to the political issue, the protest in 2019, and you wrote some really interesting views on that.

[00:19:27] Steve Vickers: Yes, well I managed to upset the yellow camp and the blue camp simultaneously. So I suppose we must've been doing something right. I've left all the things that we wrote on my website. So they're all still there. Yeah, we did monthly coverage as the protests emerged. And we gave predictions as to perhaps how things might play out. I was deeply sad by what was happening and it was a bit like watching a train crash in very slow motion. As the protests escalated, the government didn't interact with them. And the Democrat party refused to criticize the violence. The government got more angry. The Democrat side polarized. The police were largely thrown under a bus in the absence of dialogue between the government and the people, the only people that the people of the street were meeting were police officers. This is not an ideal scenario. So the situation escalated, violence escalated.

Foreign interference, I think did start about then. I don't think it started off like that, but I think people jumped onto the bandwagon. Who was the big winner from this, it wasn't Hong Kong was certainly not the big winner. The big winner was Taiwan. In that, I don't think the incumbent president would have been elected, if the Hong Kong situation, the problems with one country, two systems hadn't developed. So yes, it became a real festering mess. And it was very obvious what was going to happen. The government, had they stepped in quickly enough in the first four weeks. I think things may have played out completely differently, but once that track was in motion, I think it was almost impossible for it to have to have ended up in such an unpleasant way as it has now.

[00:20:56] Collin: It's always after the fact. But was the policing, were their hands tied at the time or from your experience as a police officer and being intelligence, did they have any idea of what was happening?

[00:21:06] Steve Vickers: I think they were very low key at the beginning. A couple of incidents, which define the whole problem. One was the Yuen Long incident, which was not the finest hour. And the bigger one was the storming of Legco. I mean, anywhere in the world, if your legislator is sacked.

As it was, that is a massive issue. And the failure to prevent that was very regrettable. But in the meantime, bear in mind, the police had literally been thrown under the bus. They were the only ones on the streets. And it was a difficult situation. There was a change in leadership halfway through which I think changed the police's situation.

So I was reporting basically on what's likely to happen next, as opposed to what's just happened. Rearview mirror stuff, it's easy to be accurate with. The NSL and the rest, it comes as a big shock. I think it's a shame what has happened in Hong Kong, but I think we just have to live with the reality.

This is where we are now. It could have been prevented. Yes. It wasn't. Who is guilty, everybody from all sides. I just hope that as things calm down a bit, that perhaps we can get to a more semblance of stability. I mean, we have stability now, but clearly, there's a lot of very upset people

[00:22:08] Collin: The underlying roots, what caused all of this, still remains up in the air. But the pandemic came in at, you've ever thought of the water to put out the fire. That certainly happened with the pandemic and then the emergency legislation for gatherings, et cetera. And you wrote about that and how's that impacted upon matters and how effecting regional business more than anything else.

[00:22:31] Steve Vickers: Political risks, practical risk. There are three terrible things that have affected business at the moment. One COVID is currently the most obvious and the impact on international travel on our aviation and on our hotels, et cetera means it's obvious. Just how bad that is.

The crackdown has had a reputational impact on Hong Kong. The sanction issues are certainly very hot. I was very pleased to see that the Hong Kong legislature has not passed the blocking law that was due to come out very recently.

I think the implications of that would be quite scary. And if you're working for a large international bank, if you follow the US sanctions, you're going to get clobbered by the Chinese. If you follow the Chinese sanctions, you're going to get clobbered by the Americans. It would be really rather problematic.

If that kicks in. From a simplistic level, I understand the Chinese view, which is we've had all these sanctions levelled against us, so we will push back. Totally understandable, but for a place like Hong Kong, which is a highly sophisticated international market, this could be difficult. So I was pleased that that hasn't happened.

We're monitoring that quite carefully at the moment. Everybody wants to know who was it? Who said don't do it? It doesn't seem to be anybody in Hong Kong.

[00:23:35] Collin: COVID is here to stay. And how do you perceive that for our businesses now at the moment?

[00:23:41] Steve Vickers: I regret to say this, I don't want to depress everybody. But I think we're into another, I'd say 12 to 14 months of quarantine regulations as they are, but for a whole series of reasons. We've got the Chinese winter Olympics appearing.

This is a matter of national interest. There are some big dates coming up and some major political meetings on the mainland, all of which will occur in the next 12 months. So all our information is that there may be minor. Tweaks to this, but I'm afraid that the quarantine regime looks like it's being in and this policy stamping out zero COVID doesn't appear to be likely to shift, at least certainly not in the mainland.

We're part of the mainland. So I'm afraid that is a major factor. Relations between China and the US are at a very poor state. The only thing that the Republicans and the Democrats seem to agree on is that they want to put pressure on the mainland and vice versa. I don't see a change to that.

So things aren't going to get better. We can assume that we're going to be buffeted by further political risk in that respect to go back to sanctions. It would be unfortunate if we have a situation where a law kicks in where work sanctions and counter-sanctions are played out here in Hong Kong.

Also on the mainland, for understandable reasons, you've noticed that there's some pressure on some structures, things called VIE structures. These are without going into technical details are basically ways that clever lawyers managed to get investments into sectors that the Chinese government didn't have in mind that foreign people would be involved in. This has just blown up, the first big victim has been people involved in the education area and field.

Many foreign firms have been hit very, very hard by that. Many foreign language instructors in the mainland will be leaving. There is a very competitive and aggressive race between the technology field, particularly in high-tech segments, which is playing out. Again, this will be problematical over the next six months or so. So again, those problems are not going away. Two of the world's biggest financiers have diametrically opposite views on how things are going to play out. George Soros was very negative in articles very recently just last week whereas the boss of another major fund was piling in with further investments into China at the same time.

So we'll see who's correct. But we are living in, a combination of COVID political risk and dangerous around the Taiwan straits bubbling away. It's always been an interesting time to be in Hong Kong. It's

[00:26:05] Collin: As one would say visa interesting times at the moment. You and I have been here for a very, very long time. But the future for Hong Kong, Hong Kong is your home. What are you going to be doing? I ask this to everyone.

[00:26:16] Steve Vickers: Well, I love Hong Kong. What's not to like about Hong Kong. I think it's changed. Whether we like it or not, whether we like how it changed, whether we're angry with the people that caused it to change or the people that made it change, we are integrating very fast into the Greater Bay Area.

This is a harsh reality, whether one likes it or not, one can cling on and pretend that we're a glorified crown colony. The SAR is part of something much bigger. I think people of our age, we're fine. For people of one generation below, they're going to have to make a decision, whether they buy into the GBA, the Greater Bay Area, expansion and opportunities with that, or they're going to have to leave or at least stay quiet.

I think there are opportunities and there are good opportunities, but I think they're only there for people willing to be flexible and willing to challenge the assumptions of it.

[00:27:01] Collin: And Hong Kong is your home.

[00:27:02] Steve Vickers: Hong Kong remains my home.

[00:26:04] Collin: That's great. Steve has been fascinating to chat with you. Thank you very much for joining us on Law & More.

[00:27:11] Steve Vickers: Thank you.