Distribution scam in mechanical equipment firm
We were engaged by a multinational mechanical equipment maker in conjunction with an audit firm to investigate the ownership of a number of distributors in eastern China to see whether the PRC general manager had a beneficiary interest in these firms. Our inquiries made significant discoveries proving that four of the GM's close relatives including his father, his mother, brother and sister, owned the distributors – posing an undeniable conflict of interest and risk to the multinational. The company used our findings as grounds to take action against the GM.

Fraudulent JV deals at appliance manufacturer
A multinational consumer hardware maker commissioned inquiries into a string of JV deals and manufacturing relationships established by a former general manager who had saddled the firm with problematic deals. Through systematic investigation of each JV and manufacturing entity it was found that the ex-GM had colluded with a third party to create structures that enabled him to bilk money into offshore entities that the conspirators owned. The client then was able to purge itself of associates of the GM, restructured its operations and exited from various onerous deals.

Investigation into loan fraudster
We were engaged by an international law firm representing a committee of creditor banks to investigate and map out the personal background, business interests and political connections of a Chinese tycoon who had defrauded international lenders of tens of millions of dollars when he defaulted on loans relating to road building projects. The detailed intelligence report that we provided enabled the client to develop effective litigation strategies for a complex court case.

Investigation of IP / Distribution / Purchasing fraud at consumer goods maker
A leading maker of consumer goods commissioned an investigation into a suspected counterfeit syndicate. It uncovered a complex shadow business involving the brand owner's own employees across many departments colluding with external parties including the former personnel director. This investigation mapped the supply chain of the counterfeit syndicate, its connections to the client's supply base and infiltration of the client's distribution channels. The findings resulted in a thorough purge and restructuring of the organization, the termination of collusive suppliers, and the consolidation of the distributor network.

Irregularities at biosciences company
A multinational biosciences company with China operations commissioned an investigation into its national sales director to determine why he was urging the company to place all distribution in the hands of just one of the firm's distributors. Inquiries revealed that the manager was the principal of the distributor and had been running it as a side business, that the distributor actually occupied adjacent premises and secretly shared the multinational's switchboard and staff. The manager had set up other competing businesses and acquired personal assets beyond his legal means. As a result, the firm dismissed the manager and unwound its onerous partnerships.

Purchasing scams at multinational megastore chain
A global retail chain's Shanghai-based China operation commissioned an investigation into its purchasing operations after a series of anonymous letters alleged impropriety by its buyers. We interviewed whistle blowers, suspects and suppliers and analyzed operational process, supplier records and anonymous letters. We established activity links between involved parties to assess the extent of fraud by key personalities. Inquiries uncovered phantom vendors owned by staff inflating procurement transactions by 30% and resulted in many dismissals including a senior expatriate. We helped introduce measures to strengthen supplier and employee controls through screening, ethics policies, vendor pre-qualification procedures and enhanced security.

Distribution fraud at biscuit company
A multinational biscuit maker in China commissioned an investigation into its sales and logistics processes and discovered significant control weaknesses in the ordering and delivery procedures that had enabled a sales manager to falsify records and fraudulently divert goods to a third party. Through forensic accounting, infiltration of the workforce and external field inquiries we mapped the fraud and produced proof incriminating those involved. We helped establish evidence through extensive interviews with purchasing, sales, logistics, warehouse and accounting staff. We showed legal counsel how ex-staff and accomplices diverted goods from warehouse and cheated the company. The firm successfully filed a criminal report to the Chinese police, the culprits were arrested, and loopholes were closed in accounting and logistics procedures.

Sting operation catches fraudulent accountant red-handed
We organized a sting operation to prove the guilt of a fraudster working for a multinational professional services firm. The fraudster, a tax accountant, was found to have set up a competing firm with a boyfriend, diverted client accounts from her employer and was moonlighting for her own business during absences from the office.

Auto parts firm nurtured their own competitor
A multinational auto parts maker hired a handsome and bright young man to lead its China sales. ChinaWhys later uncovered how he had immediately set up a company with is brother, transferred product and management know-how to his family firm. After 7 years he persuaded his employer to form a JV with his family firm without revealing the connection. He set up subsidiaries and inserted them into the chain as suppliers of his employer. He copied their products and targeted their clients for OEM work. After 10 years his firm grew into a serious rival and he quit the multinational. His own firm achieved vertical integration of coating, components and finished goods. It formed a holding company and prepared for an IPO. His products now compete head-on with his former employer. For 10 years, they didn't know.

Merchandiser bilked millions from China sourcing
ChinaWhys investigated and exposed how merchandisers at a multinational textile sourcing office in China bilked millions in bribes and kickbacks. Over the years, merchandisers at the multinational's buying office formed close, unethical ties with suppliers giving rise to informal command structures and communication channels that amounted to a shadow business model. The senior merchandiser made all the purchasing decisions locally and took huge kickbacks throughout his 10-year career, but he was not responsible legally. The sourcing contract was signed between the Chinese trading company and the sourcing dept of the multinational's headquarters.