Case Study
Case Study # 3
THE CLIENT
The founding members of a major Hong Kong financial institution recently acquired by a state-owned enterprise
THE PROBLEM
Over the years the client has built a successful business with a reputation serving the community of Hong Kong. Despite covering chiefly the Hong Kong market, the local firm has attracted interest from quite a few strong global players owing to its long-term presence and sound portfolio risk management.
To further its growth strategy, a state-owned enterprise seeking to increase its exposure in Hong Kong was among the contenders eyeing our client’s promising business. After rounds of negotiation, the government-backed company successfully got the deal and acquired a controlling stake in the local financial institution.
Seemingly the transaction was smooth as reported in the news; in fact, only half of the deal was completed – the SOE claimed to have fully settled the payments to all involved parties, while the client failed to collect quite a large portion of the agreed upon amount. Normally, this would have been easily resolved, but the actual, mutually-accepted deal differs quite a lot from the contracts ‘arranged on paper’, thus drastically increasing the effort of tracing the whereabouts of the missing funds.
THE SOLUTION
The client engaged the VGM forensic accounting experts of the commercial investigation team to evaluate the situation and estimate the flow of funds. Time was the most essential element. After a thorough discussion with the client on the whole transaction arrangement, the team concluded the meeting with prompt measures and a swift operation targeting both the owners and fund movements of all concerning bank accounts .
Employing VGM’s own intelligence, all operations, both large and small, of the bank accounts were under the radar. VGM also quickly mobilised multiple squads to closely monitor all highlighted individuals as the probability of them fleeing from Hong Kong was high given the sum involved.
THE OUTCOME
The clock was ticking; and the stakes were high. After a non-stop hunt and endeavor of over 200 hours, VGM successfully identified and located two suspects – one at a pier in Hong Kong after midnight with the other in a third-tier city in China. With the odds on the client’s side, they were all caught red-handed with a large amount of cash directly related with the transaction.