Energy and Telecom Cable Manufacturer

Brief

The US parent company appointed an HKA forensic accountant and Certified Fraud Examiner to lead an independent investigation in full cooperation with the Department of Justice (DoJ), Securities and Exchange Commission (SEC), and Federal Bureau of Investigation (FBI).

What we did

Working closely with the counsel of the US group, HKA examined the Thai company’s books and records to identify suspicious and high-risk transactions. This analysis involved millions of lines of ledger entries and transactions amounting to hundreds of millions of dollars across six countries. Drawing on our experience detecting accounting anomalies and our expertise in data analytics, the team flagged potentially dubious payments and examined the supporting documentation. Meanwhile, an extensive review of email and other correspondence shed further light on suspect dealings.

Our investigation confirmed several lapses in FCPA compliance involving payments to state-owned entities in three of the countries. These included transactions masked in the general ledger as commissions to third-party agents and freight forwarding charges. We also identified and documented the attempts of lower-level managers to cover up the violations.

The team advised on information requests, developed questions and conducted interviews of accounting personnel, issued a detailed report, and provided testimony before the DoJ, SEC and FBI.

Outcomes

HKA’s expertise in forensic accounting, data analytics, interviewing staff, and expert testimony – along with the capacity to distill complex accounting procedures in a clear, conclusive report – all play a part in successful investigations.

The US authorities looked favorably on our client’s cooperation and the transparency and thoroughness of our investigation. Damages, including punitive penalties, in these cases can be a multiple of the unlawful transactions’ value. The fines and penalties applied to the cable group were set at 50% of the typical floor mandated for FCPA matters.