We encourage our members to uphold high ethical values in business. Ethics help in the sustainability of your business. Try and cut corners, try and engage in corruption and your business will only survive in the short run.
Below we showcase some of the high profile cases of Fraud and Corruption and what happened.
Case 1.
In the UK in 2014, a small limited company
specialising in printing security documents,
together with its chairman and its sales and
marketing manager, were convicted of corruptly
agreeing to make payments totalling nearly half
a million pounds. These payments were used to
influence the award of business contracts in
Kenya and Mauritania. This was the first Serious
Fraud Office (SFO) trial resulting in conviction
of a corporate for foreign bribery.
Case 2
In 2011, Japanese giant Olympus became engulfed
in a $1.7 billion accounting scandal after its former
Chief Executive was dismissed for questioning
company accounts and brought the issue to global
attention. As a result of the scandal, the Board
resigned and the company together with three
former executives pleaded guilty in Japan to
charges related to a cover-up. The scandal had a
devastating impact on the value of the company at
the time and the company was fined ¥700 million
(£3.8 million).
Case 3
In South Africa in 2016, a businessman was
sentenced for 20 years for using a multimillion
South African rand fishing business as a front
for false VAT returns, using the proceeds to fund
an excessive luxury lifestyle and losing the
country’s revenue service over R250 million.
Case 4
Satyam Computer Services, an Indian global IT
company, was brought down and joined the ranks
of Enron and WorldCom on the scale of fraudulent
financial activity, after the CEO in 2009 admitted
the company had misrepresented its accounts
to its board, the stock exchanges, the regulators,
its investors and all other stakeholders. The
company’s revenues and profits were overstated,
and it also reported a cash holding of
approximately $1.04 billion that simply did not
exist. The CEO, together with others involved in
the fraud, were convicted in 2015.
Case 5
Volkswagen (VW) Diesel Fraud:Running on empty
In 2015, the United States’ Environmental Protection
Agency (EPA) found that many VW cars being sold in
America had a “defeat device” – or software – in diesel
engines that could detect when they were being tested,
changing the performance accordingly to improve
results. At the time, VW was positioning its diesel cars in
the markets, backed by a huge marketing campaign,
highlighting its cars low emissions. The resultant scandal
impacted on VW globally at every level of the company.
In early 2017, several VW executives were charged over
their alleged roles in the emissions scandal.
The US Attorney General stated that “These individuals all held
positions of significant responsibility at VW, including
overseeing the company’s engine development division
and serving on the company’s management board.
Over the course of a conspiracy that lasted for nearly
a decade, they seriously abused those positions,
and today, they are being charged with a range of
crimes, including conspiracy to defraud the United
States, violations of the Clean Air Act, and wire fraud.”
Investigations into their conduct are ongoing and followed
a requirement concluded in 2016 for VW to pay $4.3
billion in criminal and civil penalties and to take specific
measures to prevent future violations. These sanctions
are in addition to more than $15 billion in settlements with
VW that have previously announced and do not take
into account other worldwide actions, including civil class
actions, against the company.
