Aziz Rahman, of award-winning solicitors Rahman Ravelli, explains how to identify wrongdoing and the options available when it is found.
Failing to prevent business crime can lead to legal, financial and reputational problems; often all at the same time.
It is no longer possible to turn a blind eye to business crime. The risks are too great. In the UK alone, recent years have seen the introduction of the Bribery Act, increased measures to tackle money laundering, a greater onus on financial institutions to report their suspicions and tougher tax legislation, not to mention increased funding being made available to the Serious Fraud Office (SFO) and the creation of the National Crime Agency (NCA) and the Financial Conduct Authority (FCA).
If, therefore, business crime is being perpetrated in your company, it may only be a matter of time before an outside agency starts looking into your affairs.
Some business people believe information about such problems will never “leak out’’. For the reasons we have just mentioned, that would be a costly mistake. Others may want to investigate but don’t believe they have the relevant expertise. But legal expertise is available to anyone that needs assistance when it comes to seeking evidence of wrongdoing.
Such an investigation is the only genuine course of action to establish the facts regarding suspicions of wrongdoing by staff or trading partners. It also provides the person or company that commissioned the investigation with a number of options.
If investigations indicate that wrongdoing has been perpetrated, a company can:
A recent development in UK business law is the introduction of the deferred prosecution agreement (DPA). This involves a company admitting wrongdoing and then agreeing to meet certain conditions in order to avoid being prosecuted. This year, Rolls-Royce has paid £497m under a UK DPA after admitting bribery, while Tesco’s DPA saw it fined £129m for accounting irregularities.
A DPA avoids the cost and reputational damage of a criminal prosecution. But to obtain one, a company must show genuine desire to tackle its problems and know how to negotiate properly with the authorities. Ideally, a company will be able to identify the wrongdoing and self-report it to the authorities in order to boost its chances of a DPA.
The authorities do not grant DPAs to any company that wants one. Being involved in DPA negotiations for clients, I can say that obtaining one requires a shrewd, tactical approach and an awareness and experience of how the investigating authorities function.
Whatever line of business a company is in and whatever the nature of the suspected wrongdoing, the potential damage can only be minimised by taking a considered, methodical approach to assessing the problem and acting in the most appropriate way.
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