Conducting business operations in different parts of Asia has its complexities. Managing a large employee base across different countries and cultures is no simple task. Often, senior management are able to spend only limited time in their Asia-based offices and may not be aware of certain issues involving their employees.
One common problem can be employees operating competing businesses. This is particularly problematic in smaller branch offices where employees may be relatively unsupervised. It is impractical to monitor employees at all times so the risk of employee fraud is real.
On one occasion, I had to deal with an employee who was operating a competing business, complete with its own website, from the company's own premises.
The employee was in a position to redirect company business to his own business. He used company negotiated supplier rates for his own business and, from what could be ascertained, was at times billing all his customer costs to the company while retaining all income. Clearly, a very profitable endeavour for the employee, much to the detriment of the company.
In order to flush out the fraud, we made a purchase from the competing business and, over several weeks, asked for more information about the business. As part of our evidence gathering, we were able to obtain a copy of the employee/business owner's passport and details of his connection to the business. With that information in hand, we had sufficient to confront the employee. The employee was then removed and the fraudulent activity ceased.
Combating employee fraud is an ongoing process that needs to be tailored to the business being monitored. It is important to investigate claims of employee fraud promptly and to also implement review strategies to identify incidents of fraud and take appropriate action. Any action against an employee needs to be in accordance with local labour laws, criminal and other civil laws and, therefore, local legal counsel input may be required. Often, the appropriate course is to have the employee resign rather than be terminated to avoid possible complications under local labour laws.
PELEN
November 2017
© PELEN 2017
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