CHANGING FACE OF CORRUPTION & BRIBERY

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According to a report by the McKinsey Global Institute, the drastic increase in the flow of data and connectivity in the third world has made it possible for more companies to reach international markets with less capital-intensive business models. Keeran Madhav, Director of Forensics at Mazars adds that this phenomenon has also increased the risk of companies being implicated in cases of corruption and bribery.

“Previously, bribes were paid by people walking around with suitcases filled with cash, but today corrupt transactions can be made instantly from anywhere in the world using a desktop, laptop, tablet or mobile phone. This has also made it more likely that bribery and corruption can take place without the knowledge of a company’s CEO,” he says.

Implicated in corruption

According to Madhav, organisations like the US Securities Exchange Commission and the US Department of Justice have taken a hard line against international companies that engage in bribery. ”The number of monetary sanctions against international companies for acts of corruption have decreased in recent years. At the same time, this past year has seen some massive fines laid against companies that did break the law. One of the most notable cases of 2016 was UK construction and professional services company, Sweett Group, which was fined £2.25 million (R38.2 million) for securing contracts through bribery in the United Arab Emirates.”

He says more mid-level employees are also being implicated in corruption. “When companies globalise, top management have to start delegating their functions to other managers and regional offices become more autonomous, as opposed to centralised, which increases the opportunity for corrupt dealings to take place.”

Zero tolerance attitude

CEOs set the tone for their companies’ attitude towards acts of corruption and bribery, he says. “Businesses need to adopt a zero tolerance attitude towards corruption and bribery. It is also very important to make their stance visible to employees and partners by putting effective and clear anti-corruption and anti-bribery measures in place.”

Mazars conducts both internal and external investigations concerning allegations of bribery and corruption within a company. Mazars assists in finding the facts, rooting out the perpetrators and conducting reports for legal cases.

“Being proactive and closing the gaps for possible corruption and bribery within one’s company is becoming increasingly important. Corrupt businesses will come up against much harsher penalties in the coming years,” concludes Madhav.


Keeran Madhav
Director of Forensics, Mazars
http://www.mazars.co.za/
keeran.madhav@mazars.co.za


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