Global chemicals manufacturer

Brief

The global chemical company’s General Counsel promptly commissioned the investigation after its head of internal audit identified several suspicious transactions. It was thought that the sales manager in Austria had paid bribes – in the form of rebates – to clients in Eastern European and Russia.

What we did

The team led by HKA’s forensic accounting expert examined the general ledger, sales and rebate documents, bank statements and all other relevant records to identify suspicious transactions. Company personnel were also interviewed.

Using exception analysis and data analytics, it was established that the fraudulent rebate scheme went back more than 15 years and involved many more customers than originally suspected.

The investigation traced the rebates – which amounted in total to $5.1 million – to bank accounts that had been created by the sales manager, whose misappropriation funded a lavish lifestyle. Customers duly confirmed that the rebates had never been received.

Our role also involved liaising with the insurance company and providing an independent account of the losses for a claim under the client’s directors and officers insurance policy.

Outcomes

The claim was accepted by the insurer, and the company also recovered the cost of the independent investigation. We also advised the internal audit team on measures to strengthen its controls to prevent similar misappropriation in the future.