Forensic Services

A crisis can shake a business to the core. It could be a fraud or corruption scandal that makes the news, a data breach or cyber incident that shakes customer confidence, a dispute with a business partner threatening to erode value or a potential regulatory breach. 

Each client faces different challenges within a business landscape that is becoming more complex than ever before. Our Kuala Lumpur based forensic team works with 3,400+ PwC forensic professionals across the globe to help you prepare, respond and emerge stronger from unplanned events.

What sets us apart

Whether it is responding to incidents, putting prevention plans in place or sifting through large amounts of information to identify actionable intelligence, we provide a thorough, professional and independent approach to your issues to help you emerge stronger.

We respond to time sensitive matters with speed and conviction.

We have the experience, training and instincts to manage unplanned events as facts and circumstances emerge - without sacrificing attention to detail.

We tackle the non-standard.

We help you switch from the uninformed to the informed. We delve into the unexpected and the unusual, helping solve problems and averting crises. By establishing and understanding the facts we provide you with the knowledge and insight to make the right decisions to protect you and your business.

We value our independence and integrity.

Integrity is our compass and the laws are our guiding principles. From conducting investigations, reporting about facts, to acting as independent expert witness, we are committed to making integrity as a way of life.

We think differently.

Our people come from a wide range of backgrounds including lawyers, regulators, law enforcement officers, data scientists, technologists, economists, engineers, forensic accountants, certified fraud examiners, as well as computer forensic and corporate intelligence specialists. We have sector experience and deploy diverse teams by applying a skeptical mindset.

Our services include:

Investigations

What is the price of fraud and economic crime?

Fraud and economic crime are threats that can strike any organisation regardless of size or industry. 41% of Malaysian companies report being victim to fraud and economic crime*. And all too often, it is discovered too late. In some cases, its damage is irreversible. That’s because fraud does more than impact the bottom line. The damage to your reputation, shareholder trust and employee morale—not to mention the costs of enforcement and litigation—can be significant and lasting.

Compliance programmes, internal controls and traditional risk management are essential, but they can be circumvented, and can’t always be relied on to prevent fraud. What’s needed is a sophisticated, flexible approach that reflects your culture, needs and issues.

Our Forensic professionals can assist you in overt and covert fraud investigations, combining deep investigative experience with local insight, knowledge of relevant regulations and the latest forensic technology.

Our experience covers a wide range of financial crime, which includes:

  • bribery/corruption, undisclosed conflicts of interest and improper business relationships
  • corporate irregularities and regulatory violations
  • asset misappropriation
  • financial reporting fraud
  • patent and copyright infringements, including piracy and counterfeiting, product diversion,
  • disruption of distribution systems, and 'grey market' activity

* PwC’s Global Economic Crime and Fraud Survey: Malaysia Report, 2018

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Regulatory Compliance

The complexity of the business and regulatory landscape is growing intensely.

Companies are navigating a proliferation of new regulatory requirements and stakeholder expectations, and are challenged to do so in a way that supports performance objectives, sustains value and safeguards the brand.

We assist our clients in complying with various regulations including their efforts to combat money laundering/terrorism financing (AML/CFT) and support our clients who are subject to foreign regulations such as the Foreign Corrupt Practices Act 1977 (FCPA) and the United Kingdom Bribery Act 2010 (UKBA).

The anti-corruption landscape has also changed in Malaysia itself. The recent change in government is credited in large part on the new government’s anti-corruption stance, and there has even been a recent announcement of 223 recommended changes by the Institutional Reform Committee about governance, integrity and corruption prevention. In fact, the Prime Minister has announced that certain key agencies, government bodies and government-linked companies will be required to obtain ISO 37001 Anti-Bribery Management System certification. However, we believe that Malaysian society’s expectations will not stop at Parliament’s doors, but that the private sector will be impacted by these developments as well.

In 2017 Malaysia itself amended its Malaysian Anti-Corruption Commission Act 2009 (MACCA) to introduce a Section 17A that makes corporations potentially liable for the offence of failing to prevent bribery. This is very similar to the UKBA. Also following the UK’s example, the only defence against that charge is the implementation of Adequate Procedures to combat bribery. The implementation date is set for June 1, 2020. Considering, though, that anti-corruption compliance potentially cuts across every function in a business, smart companies are taking action NOW to address this change.
 

What should Malaysian companies do to implement Adequate Procedures?

By June 1, 2020, Malaysian companies are required to have implemented “adequate procedures” to prevent bribery. If they fail to do so and a person associated with the company offers or pays a bribe and is caught, the company’s directors or senior managers are liable for fines starting at RM 1 million or up to 20 years in prison, or both.

This sobering prospect may not yet be on your radar or not an immediate priority, but it’s important that directors and senior managers recognise that tackling bribery is no longer a “nice to have,” but a must-have for which they could be personally liable.

But what are these “adequate procedures?” In December 2018 the Malaysian government published guidelines defining these adequate procedures. However, the guidelines are not particularly prescriptive – remember, they are intended to apply to every commercial organisation in Malaysia, and are thus restricted to high-level principles that each organisation has to interpret and implement according to its own size, complexity, and risk profile. In fact, the introduction to the guidelines discusses this principle of “proportionality,” thus: “These guidelines are not intended to be prescriptive and it should not be assumed that 'one-size-fits-all.’ They should be applied practically, in proportion to the scale, nature, industry, risk and complexity of the organisation.”1

The Malaysian government’s guidelines use the acronym TRUST as a mnemonic device to help summarise the guidelines, where:

T: Top level commitment

R: Risk assessment

U: Undertake control measures

S: Systematic review, monitoring and enforcement

T: Training and communication

Each of these headings, however, can be a significant undertaking in its own right. Depending on the risk profile of your organisation, these may require not only long-term commitment, but also long term devotion of time, management effort, and other resources. In our experience, the most economical way to approach the implementation of “adequate procedures” is to perform a corruption risk assessment and a gap analysis of your existing anti-corruption procedures and controls - some organisations with prior exposure to anti-corruption principles along the lines of the US Foreign Corrupt Practices Act, the UK Bribery Act or with World Bank guidelines, will already have done some of the hard work.

As part of PwC’s purpose, “to build trust in society and solve important problems”, we have been helping organisations perform anti-corruption risk assessments around the world for more than a decade. Our Malaysian-based experts are well-placed to help you understand what good practices in this area are, and what regulators typically expect from a robust compliance programme. After all, the US, UK and others have had similar extraterritorial legislation, and commercial requirements, on the books for years.

More importantly, from our deep understanding of control failures and weaknesses gained from many of the world’s most important anti-corruption investigations, we know how to help Malaysian companies design and implement controls that can withstand real world tests.

For more detailed discussion of these topics, please see the following blog posts we’ve published on this topic:

Please reach out to Alex Tan or Michael Sprake to have a conversation about your own compliance programme today. Contact details at the bottom of this page. 

 

 

Please reach out to Alex Tan or Michael Sprake to have a conversation about your own compliance programme today. Contact details are as follows:

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Fraud Risk Management

All business entities face a variety of fraud risks - asset misappropriation, bribery, financial misrepresentation - to name a few. Business entities should take steps to ensure that effective policies, procedures and infrastructure are in place to address and reduce their exposure to fraud risk.

Fraud risk assessment helps management to understand the risks that are unique to their businesses, and assist in identifying and evaluating internal controls to alleviate those risks.

Our team of experienced professionals can help your company to:

  • undertake a comprehensive fraud risk assessment
  • implement or evaluate existing anti-fraud programmes and controls
  • design fraud responses and remediation plans
  • develop fraud monitoring programmes that are tailored to your needs
  • conduct training to increase awareness of fraud risks
  • understand what constitutes leading practice in this area

Our services bring a fresh perspective and structure to help companies avoid fraud and emerge stronger, if it does occur.

 

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Forensic Accounting

Forensic accounting is the application of the skills and training of a qualified accountant in investigations, disputes, reviews and other procedures.

The results of the findings and observations could end up in a court of law.

Our professionals have experience in:

  • unravelling complex accounting records to ascertain the true nature of the transactions recorded
  • detecting any false or creative accounting entries
  • performing any type of procedures pursuant to shareholder disputes or other civil matters. We also have the experience of working hand in hand with legal professionals involved in such procedures
  • quantifying the value of the loss experienced by an organisation or individual,
    acting as an expert witness pursuant to our work

Ultimately, the value of the forensic accountant is in communicating complex financial transactions or information in a succinct manner using pictures, graphs and language readily understandable by non-accountants.

 

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Litigation Support

Business disputes and regulatory probes have become increasingly more disruptive, cumbersome and complicated.

Whatever the nature of your dispute, success is often predicated on the depth and credibility of your data, the power of your analytical work, and the ways both can inform a winning legal strategy.

Complex litigation matters require the insight and experience of individuals who understand how to interpret financial records and documents.

When faced with this challenge, companies and their counsel can call on our litigation support team. We can help with the gathering of financial data, quantification of exposure, and reconstruction of financial information.

We can also provide expert witness evidence in legal proceedings and are experienced in presenting facts to withstand cross-examination. 

Our professionals have experience in:

  • both fact and expert witness testimony
  • performing many types of financial procedure
  • quantification of damages
  • serving as arbitrators, mediators, or special masters
  • business analytics (quantitative analysis and optimisation of operating metrics)

Our Partner, Alex Tan has given evidence on behalf of clients at Kuala Lumpur and Shah Alam High Courts into our investigation findings on several occasions. Alex has also given evidence in the Magistrate, District and High Courts in Hong Kong and New Zealand and acted as a Police prosecutor in the Magistrate and District Courts in Hong Kong. Other team members have also testified as fact witness in arbitration, in the local tribunal court, as well as before Shah Alam High Courts.

 

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Digital Forensics & eDiscovery

We have computer forensic laboratories strategically located in over 30 territories (including in Malaysia) to facilitate efficient and rapid response to fraud investigations, disputes, regulatory matters, cyber breaches, litigation, whistleblower allegations, and other crises. We are here to help you plan for uncertainty, garner insight from your data - and make informed decisions under pressure. Our Digital Forensics and eDiscovery professionals employ the most sophisticated tools in the industry to forensically process, store and review electronic evidence.

We have the knowledge, experience and are well certified to handle evidence that meets local and international  regulatory requirements.

We can assist you by:

  • forensically preserving electronic data from various electronic sources, including desktop computers, laptops, servers and mobile devices
  • reviewing and analysing both unstructured and structured data as part of an investigation
  • making electronic documents available for your legal counsel or management to review on a secure online platform
  • providing expert witness testimony in court in the event that our findings are used in litigation
  • providing incident response expertise if you are the target of a cyber attack

 

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Data Analytics

You’re using your data to drive business innovation, so there’s no room for error. Data quality begins with solid data governance. It has to be well-organized, relevant, accurate, and understandable. We’ll help create your data framework, build the strategy, optimize your infrastructure, processes and systems and create the culture to become a data-driven organization.

We can also help you with suspicious transactions analysis by interrogating ERP, financial and transactional systems to uncover red flag breaches and unusual patterns of behaviour that may indicate fraud, malpractice, or process weaknesses. Anti-money laundering and economic sanctions is also part of our expertise where we perform suspicious transactions look-back analysis and filters testing in support of compliance and remediation activities.

 

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Licensing Management

Companies often need to make strategic partnerships with other organisations in order to get competitive advantages in innovation, growth, pricing, profitability, speed to market, quality and to establish a global reach.

Licensing, franchising, supplier or distributor agreements are often very complex and non-compliance with the provisions of these agreements can have a direct impact on the bottom line. Over the life of any kind of licensing agreement, the ‘revenue leakage’ may result in hundreds of thousands, and in some cases, millions in lost income.

That’s why we help clients with contract compliance – looking at whether their business partners are keeping to their contracts, and finding out whether there are opportunities to recover revenue or cut costs. Often, our clients invoke the audit clauses in their contracts to bring us in to investigate their business partners’ data and records.

Our work helps companies to get the best value from their agreements. For licensing and revenue-sharing agreements, our work can lead to revenue recovery. For other important contracts, such as sales and distribution, supply, outsourcing and joint ventures, it can lead to cost recovery.

We bring together local knowledge, language and culture to help companies optimise their revenues, capitalise on and protect intellectual property, and manage risk.

 

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Global Intelligence

As business leaders you rely on information and intelligence for almost all your critical decision-making. Whether it's evaluating suppliers, identifying new markets, reshaping strategy, making acquisitions, hiring key personnel, pursuing new business or using forensic intelligence to respond to crises.

And when leaders are informed by relevant, up-to-date, reliable intelligence, they are empowered to make better decisions.

Our Global Intelligence Operations Centre (GIOC) is the 'engine' that helps to integrate vast streams of complex data and information, analyses the results, and produces the finely tuned intelligence upon which companies from all around the world depend to achieve the best possible outcomes. Malaysia's GIOC has helped many global clients vet their third parties, evaluate business deals, identify parties with conflicts of interests, and provided forensics support where required.

PwC's GIOC comprises more than 400 dedicated professionals that speak more than 40 languages across the globe. Our GIOC professionals come from diverse professional backgrounds ranging from finance to engineering, military to law enforcement, as well as governmental organisations, journalism and international relations.

In addition, we constantly invest in cutting edge information collection technology and databases that include consumer sentiment analysis, market intelligence, sanction lists and financial crime related information.

By partnering with us, business leaders benefit from the access to a global network of resources as well as global industry leading intelligence that will help you sharpen your competitive edge.

 

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Case Studies

#1. Fictitious training claims by a vendor to a Government agency

We were engaged by a Government agency to investigate approximately 100 training claims from one particular training vendor.  The Government agency provides training grants to eligible local entrepreneurs who develop mobile applications in Malaysia. These grants can be used to obtain technology training and certification from the Government agency’s approved training vendors.  

During our investigation, we found irregularities in 80% of the claims. These included (i) nonexistent training sessions, (ii) use of past/present employees of the vendor in place of actual entrepreneurs, (iii) dissimilar signatures between documents, etc.  As a result of our work, the contract with the vendor was terminated.

 

#2. Conflict of interest and ill management of a Government training grant  

We were instructed to conduct investigations into a training grant offered by a Government agency.  The Government agency organised training programmes offering professional certifications that were supposed to be accredited by the agency’s technology partners and run by a network of over 68 training vendors.  

We performed extensive corporate intelligence searches to identify possible relationships between grant applicants, training vendors and the agency’s employees.  We also examined various physical documentation such as grant application forms, grant evaluations evaluation forms, claims forms and/or invoices from the training vendors, payment vouchers, contracts, HR records, accounting records, etc.  We forensically copied computers and email archives of relevant employees of the agency and analysed approximately 5,000 electronic documents based on a set of agreed keywords. We interviewed personnel in relation to the allegations and, after being instructed to do so by our client, contacted various third parties such as grant recipients, former employees of the agency/training vendors as well as selected technology partners.

As a result of our work, contracts with questionable training vendors were terminated and disciplinary actions were taken on employees involved in the allegations.

Fraud involving senior management

We were engaged to assist in a highly confidential and sensitive investigation into suspected impropriety by a member of senior management.  The allegations ranged from physical altercation to self-dealing in awarding contracts to related vendors.

After numerous interviews, forensic imaging of computers and handphones, and detailed financial analysis, the organisation had sufficient evidence to suspend the subject's employment and issue a show cause letter, ultimately terminating his employment based on our findings.  We worked hand in hand with Internal Audit, Human Resources, and the company's external counsel to bring the matter to closure, despite the initial warnings that the subject was "untouchable."

 

Contract related fraud

We were appointed by the shareholders of a property developer following a dispute.  We identified all inflows and outflows of the company funds including the sources of the funds and the relevant payees. We also performed a review of contracts entered into by the developer and identified overpayments on contracts. Our independent report was adduced in court and was integral in solving the shareholders' dispute. Shortly after, we also assisted The Royal Malaysian Police with a related investigation.

 

Conflict of interest

We investigated allegations of collusion and conflicts of interest surrounding the procurement process at a Malaysian GLC. We identified undisclosed relationships between individuals and multiple bidders that had participated in the same tenders. Our work included recommendations for the company to improve certain areas of its procurement processes.

 

Post-acquisition net receivables balances review

We were engaged by a global conglomerate to conduct an investigation into an acquired local subsidiary.  We were tasked with analysing potentially fictitious related-party transactions that took place prior to the acquisition, and to identify the net receivables balances that had led to significant losses following the acquisition.  Upon conclusion of the investigation, we provided litigation assistance during the arbitration process. Pete Viksnins was further engaged as a witness for the claimants at the Asian International Arbitration Centre.

 

Large scale procurement/supply chain fraud

We were asked to investigate into kickbacks, conflict of interest, price manipulation and large scale procurement/supply chain fraud.  We conducted physical document review, computer review and assisted in interviews and meetings with an assortment of employees, suppliers and third parties.  This extensive investigation, of over 20 members of staff, uncovered a widespread culture of staff demanding and receiving kickbacks in the form of cash and other benefits (flights and house renovations) from suppliers.  As a result of our investigation, 12 members of staff have either had their employment terminated or resigned including one director. We also assisted in the preparation of a referral into the conduct of 14 members of staff to the MACC with the case being adopted based on the evidence obtained in the course of the investigation.

 


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Contact us

Alex Tan

Partner and Forensic Services & Risk Consulting Leader, PwC Malaysia

Tel: +60 (3) 2173 1338

Rohit Kumar

Director, PwC Malaysia

Tel: +60 (3) 2173 1786

Michael Sprake

Director, PwC Malaysia

Tel: +60 (3) 2173 0277

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