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Forensics Matters

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Forensics Matters forensics matters Bribery and corruption in Asia-Pacifi c A guide to recent cases and regulators Publication No. 12-01 www.kordamentha.com\forensic forensics matters 1Introduction The emerging markets of the Asia-Pacific region are of Gift giving is considered normal and acceptable, and great interest to the rest of the world, and currently are may be accompanied with religious or cultural being viewed as the engine room for world economic significance recovery. It is because of such interest that perhaps more Hospitality culture, which can be extreme in some areas than ever we are seeing the increase of cross border Cash culture business and transactions. Business heavily dependent on relationships; Corporate entities and individuals are taking advantage nepotism is alive and well in the region of buoyant economies and favourable tax conditions in Boss and male superior working environment with the region to expand their own enterprises, unfortunately little contribution or opposition from subordinates many times without undergoing sufficient due diligence of local market conditions and regulations. Emerging and Government is closely involved, or embedded, in developing countries create vast opportunities, however many businesses these locations present new challenges and require In some areas face or personal credibility is dealing with unfamiliar geographic territories, new fundamental, and therefore can restrain open cultures and governments where lines between official communication and non-official status are not always apparent. Minimal employee rights The challenge Language difficulties Resistance or fear to cooperate with regulators and Multinational companies (‘MNCs’) experiencing rapid authorities. growth in multiple jurisdictions often encounter a wide variety of cultural, legal, regulatory and financial The way forward complexities and nuances. Attached to these complexities are evolving obligations and responsibilities to international A MNC may have a one size fits all strategy to anti- and local laws associated with anti-corruption. The corruption, however when undertaking such functions exposure to unforeseen corruption risks is high. outside familiar geographies and jurisdictions it becomes increasingly important that they become familiar with It is also paramount that individuals prepare themselves local legal, cultural and financial obligations. to navigate through the different landscapes that may personally expose them to corruption. Increasingly, an Most countries of the Asia-Pacific region have in place individual representing a MNC may be tasked with anti-graft and corruption legislation but the region is multi-country responsibilities, and must be aware of their constantly evolving and not always at an equal rate. In own obligations when working in different locations. some countries the relevant laws and regulations are Common sense should prevail when exposed to such ignored, not used to their full potential or clogged down issues, however having a working understanding of the in bureaucracy. Conversely in other regions, laws are cultural, legal, regulatory and financial framework is used swiftly with frightening effect, and in some instances critical. They should also have the ability to access the punishment far outweighs the alleged infringement. information, or assistance when necessary and, most Ignoring the region’s various anti-corruption legislation will importantly, know their own legal rights. In some locations be at your peril, making it crucial to implement a robust corruption is an unfortunate way of daily life. For the anti-corruption risk management and compliance framework. uninitiated or ill-prepared, confronting a corrupt situation To help you understand corruption complexities in the may be life-changing or career destroying, or even a risk Asia-Pacific region, we have prepared a guide to recent to their own life or liberty. corruption cases and regulators in the region, and also The Asia-Pacific region is as vast as it is eclectic, with provided as comparison, relevant cases and regulators influences from all sections of the globe mixed with from Australia, the U.S. and U.K. cultures, traditions, religions and behaviours that have We have also prepared a longer version of the guide been observed for centuries. With rapid economic growth which includes relevant anti-corruption legislation for and global exposure, some countries are at odds with each country, which is available on our website . robust compliance, or the notion of reporting here malfeasance. Some prevailing cultural issues or norms in the region (which vary from country to country) affecting corruption risks are: Page 2 forensics matters 2China RECENT CASES Siemens bribery case Shi Wan Zhong, the former human resources director of China Mobile, took USD 5.06 million in bribes from Tian Qu, who served as a middle man between Mr Zhong and Siemens. Mr Zhong was a repeat offender where the fi rst offence occurred in the year 2008. Mr Zhong had also accepted USD 0.3 million from a private company during his tenure in Anhui province. In May 2011, the Intermediate Court sentenced Mr Zhong to death and Tian Qu to 15 years in prison. Shanghai Pharmaceutical bribery case In November 2011, the former president of the state-owned Shanghai Pharmaceutical Group was sentenced to death, with a two-year reprieve, for taking more than USD 1.8 million in bribes and embezzling USD 5 million. Although these types of sentences are often commuted to life in prison, they are reminders of how seriously China takes the question of corruption in what is now the world’s second-largest economy. Regulators Central Committee for Discipline Inspection (CCDI) y Responsible for combating corruption and ensuring integrity among Communist Party of China (CCP) cadres. National Bureau of Corruption Prevention (NBCP) y Analyses the roots of corruption in order to develop measures to prevent it. y Ensures effi cient corruption prevention by assessing new policies. y Guides anti-corruption work in both the public and private sector. National Audit Offi ce (NAO) y Inspects accounts of state-owned enterprises and government entities. Page 3 forensics matters 3Singapore RECENT CASES Former Table Tennis offi cial charged with corruption A former employee of the Singapore Table Tennis Association (STTA), Choo Wee Khiang, has been charged with three counts of corruptly accepting gratifi cation and one count of criminal breach of trust. In 2005, Choo received SGD 1,500 (USD 1,160) from Luo Jie, on behalf of Liu Zhong Ze, in exchange for giving Liu more opportunities to represent STTA in table tennis tournaments. He also received SGD 768 (USD 595) as a reward for approving the use of training facilities in China. Choo had also authorised a payment of SGD 8,400 (USD 6,500) to Luo Jie, who was meant to provide training services but failed to do so. The maximum punishment for corruption is a SGD 100,000 (USD 77,400) fi ne and fi ve years’ jail on each charge. Civil servant fraud Liew Chee Meng, a civil servant in Singapore, is accused of 455 fraud charges and cheating the government of more than SGD 600,000 (USD 464,000). He was charged in court for forgery, cheating, criminal breach of trust and conversion of proceeds of crime, and was accused of forging offi cial documents to purchase gift vouchers for himself. Mr Liew’s actions came to light in January after an internal audit. Regulators Singapore Exchange (SGX) y Manages day-to-day regulation of listed companies. Commercial Affairs Department (CAD) y Investigates white collar crime. Monetary Authority of Singapore (MAS) y Regulates and supervises fi nancial market. Corrupt Practices Investigation Bureau (CPIB) y Investigates corruption in private and public sectors. Attorney-General’s Chambers (AGC) y Deputy Public Prosecutors conduct prosecutions and guide investigations. Page 4 forensics matters 4Thailand RECENT CASES Anti-corruption unit against former tourism chief Thailand’s National Counter Corruption Commission (NCCC) found suffi cient grounds to believe that former Tourism Authority of Thailand (TAT)’s chief, Juthamas Siriwan, took a bribe from a Los Angeles fi lm-producing couple, of USD 1.8 million in the years 2002–2007 to help secure their Bangkok International Film Festival contract and other TAT deals. The couple was sentenced to six months in prison, six months of home confi nement and a fi ne of USD 250,000. Juthamas was charged with a criminal offence by violating Thai law as a state offi cial who acted against fair bidding in exchange for favours. Corruption in the Thailand Strengthening Plan scam Under the plan which was introduced in 2009, the Ministry of Public Health obtained THB 86,685 million to dedicate for medical equipment and capital acquisitions for public hospitals in remote areas. It was alleged that the fund allocation and procurement process was unusual and not transparent. In addition, specifi cations of medical equipment as well as their marked prices were excessively high and did not correspond with the demands of many hospitals, which indicated corruption. The media publicised the scandal and in response, the cabinet established an independent investigation taskforce to uncover the incident. The taskforce noted that government offi cials in general were neither attentive nor proactive in addressing the corruption, perceiving it to be a common phenomenon. In response to the scandal the public health minister, Withaya Kaoparadai, resigned in late December 2009. Corruption scandals under the Thailand Strengthening Plan were reportedly pervasive in other ministries too, including in the Ministry of Transportation, Ministry of Agriculture and Co-operatives, Ministry of Education, and Ministry of Interior, but none of them were formally investigated, as no watchdogs stirred up these cases. It is possible that the legislature will bring up these cases for investigation. Regulators National Counter Corruption Commission (NCCC) y NCCC has the power to investigate any corruption allegations and to recommend prima facie cases to the Prosecutor-General or to the Special Supreme Court for Political Offi ce Holders for prosecution.
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