Overview

A major European industrial gas manufacturer engaged H&A to investigate allegations of conflict of interest involving a business development manager at its China entity. The allegations suggested that the manager (the Subject) was secretly running a private company with a similar business line, creating significant risks to the Client’s business operations in China.

Challenges

The Client faced several key risks:

• Potential financial loss from diverted business opportunities.
• Erosion of trust with existing clients and suppliers.
• Exposure to insider threats and potential legal liabilities.
  The situation required a swift and discreet investigation to uncover the truth and mitigate further damage.

Our Approach

H&A conducted a multi-phased investigation to gather evidence and uncover the extent of the misconduct. The process included:

1. Public Records and Media Research

We began with open-source research to verify the allegations. This revealed that:

• The Subject was the legal representative and major shareholder of a suspicious private company.
• The company operated in a similar business line to the Client, posing a direct conflict of interest.

2. IT Forensics and Data Analysis

H&A then conducted an in-depth IT forensic review, which revealed significant misconduct:

• At least six employees of the Client’s China entity were working for the Subject’s affiliated companies.
• Three employees were found to be surreptitiously employed by these companies while on the Client’s payroll.
• The Subject and his associates leveraged their internal positions to:
  • Approach the Client’s existing customers.
  • Divert business opportunities.
  • Steal confidential client information to benefit their private ventures.
• Two suppliers collaborated with the Subject to manipulate bidding processes, securing contracts at the Client’s expense.

Outcome

Armed with detailed forensic evidence from H&A, the Client took decisive action:

• They initiated legal proceedings against the Subject and his associates.
• The Client successfully won labour arbitration cases and civil claims against the implicated employees.
• This strong response sent a clear message within the organisation, reinforcing their commitment to ethical business practices.

Impact

• The Client regained control over compromised business channels.
• The internal investigation process strengthened governance measures to detect future conflicts of interest.
• Relationships with suppliers and clients were repaired after the removal of bad actors.

This case demonstrates the importance of corporate intelligence in uncovering internal risks and protecting businesses from insider threats in high-risk markets like China. Through H&A’s comprehensive investigation, the Client was able to mitigate reputational and financial risks while enforcing stronger internal controls.