GFS LinkedIn
GFS Facebook
GFS Twitter
GFS RSS feed

What corruption really costs

Monday 30 January 2012 – by Heidi Lawson


Second, the target’s systems and controls should be evaluated in the following areas:
1. Use of agents and outside consultants
2. Expense claims, payments and petty cash disbursements
3. Contracting/contact points with government bodies
4. Fraud response procedures/mechanisms
5. Entertainment and gift practices
6. Record keeping practices and accuracy of book’s and records
7. Relationships with state-owned enterprises



If the due diligence reveals FCPA or UK Bribery Act issues, a buyer has several options available, including (1) negotiating specific indemnification provisions; (2) self-reporting to the relevant regulator; (3) adjusting the deal price or walking away from the transaction; and (4) allocating potential fees and fines in the merger agreement.

If there is not time to conduct adequate anti-corruption due diligence prior to closing, then the acquirer could consider requesting an advisory opinion from the DOJ or other relevant regulator.

The bottom line is that corruption is expensive, it damages the reputation and it can seriously impair – if not kill – a deal. At a minimum, the price being paid in an acquisition may simply be too much.

In a world of successor corporate liability and regulators with the powers of demigods, it is wise for a corporation to be preemptive and load its arsenal against future threat.


Article pages: |  1  |  2  |   3  |



WHAT DO YOU THINK?
 
Name:
   
Email:
   
Comment:
   
Post as Anonymous
  Display name
   
Please, enter security code
   
 

No comments yet.

STRAW POLL

Will markets in 2012 have a tougher time than 2011?

Yes

No

Don’t know

View results

FIND A REGION world regions