A European manufacturer of thermal cutting machines for applications in the metal plate processing industry launched an internal investigation after receiving a tip that its chief financial officer (CFO) had been using a logistics company established and run by relatives to provide logistics for the majority of the manufacturer’s China-based business. Our firm conducted the investigation on behalf of the manufacturer, which confirmed the allegations about the CFO and implicated other senior management and administrative staff in the arrangement.
The investigation also uncovered additional instances of misconduct, including employees who embezzled company funds for several years by pocketing the proceeds from unreported sales of scrap material and eight employees who falsified termination documents to fraudulently claim insurance premiums.
Our firm handled the terminations of the errant employees in addition to a criminal investigation by the Public Security Bureau and litigation associated with various actions taken by and against the affected employees. Following this incident, our firm was asked to review the manufacturer’s Global Code of Conduct in Germany, the United States, Brazil, India and China. The firm ultimately handled the review in the U.S. and China, and coordinated the review by local counsel in Germany and Brazil.