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Kidnap expert turns heat on corporate criminals

Kidnappings occupied a big part of Steve Vickers' time during his 18 years with the Royal Hong Kong Police.

Of the 28 kidnapping cases he handled, the former head of the Criminal Intelligence Bureau brought back 26 alive. The exceptions are a boy he would not identify and his most interesting case, the abduction of property tycoon Teddy Wang Teh-huei, which, because of its ramifications, still holds interest today.

The owner of the Chinachem property empire was kidnapped in 1990. His wife, Nina Wang Kung Yu-sum, paid the US$60 million ransom - the largest ever paid.

The case was Vickers' last abduction case before he left the police force. He managed to catch the culprits, who were sent to prison for more than a decade, and recover most of the money. But he could not rescue Teddy Wang or recover his body.

Wang was later declared dead and his wife died in 2007. However, the billions of dollars in assets of Chinachem are still at stake in a spectacular legal battle involving disputed wills.

Although Vickers joined the private sector in 1992, he is still negotiating with and chasing kidnappers as part of his current job as president and chief executive of FTI-International Risk.

The firm helps companies that offer kidnapping insurance to bargain with hostage takers and rescue victims on the mainland and in Southeast Asia. 'It is very hard handling kidnappings but you feel good when you see the victims safely rescued,' Vickers said.

Kidnapping is not the only area he specialises in.

His firm also investigates companies and the backgrounds of their executives for investment banks that are deciding whether to sponsor companies going public. It also does due diligence on mergers and acquisitions, background checks on potential business partners and investigates suspected fraud inside companies.

Vickers, 55, was born in Wirral, in northern England. His father was a businessman and he was trained in a military school from the age of 13. But training in the winter time in mountainous areas led him to decide to go south.

'It was so cold,' said Vickers. 'I thought it would be good if I could work in Asia where the weather is much warmer and better.'

Hong Kong fitted the bill perfectly and Vickers applied to join the Royal Hong Kong Police Force in 1975.

Like many expatriates, he fell in love with the city immediately and a two-and-a-half-year contract became a 34-year career in the city.

He married and his daughter, Michelle, has just graduated from the University of Oxford.

When Vickers left the police force he joined Kroll, the risk consulting firm, in Hong Kong and then moved to PricewaterhouseCoopers to head its investigative unit.

After the Enron scandal, when the accounting firm had to split its auditing and other business, Vickers engineered a management buyout of the investigative unit, renaming it International Risk in early 2003.

However, only three months after he had spent his entire savings and mortgaged his house for the buyout, the Sars epidemic broke out.

'I had no choice but to set up an office in Tokyo, which was the country least affected by Sars,' he said.

In 2005, he sold the business to Nasdaq-listed FTI Consulting and renamed the firm FTI-International Risk. Vickers stayed on as president and chief executive.

FTI Consulting has an annual turnover of US$1.3 billion with operations all over the world.

Most recently, it was involved in the investigation of Bernard Madoff's Ponzi scheme in the United States. Madoff's scam cheated celebrities, charities and scores of small investors out of some US$21.2 billion.

Vickers said he made the right choice in selling the firm because, as part of a larger organisation with an international network, it can serve clients who want to invest in China and help mainland companies invest overseas.

How do you compare the Hong Kong of today with 30 years ago?

I came to Hong Kong in February 1975. Before I arrived, I learned some Putonghua and I knew the city was a British territory on the coast of China. On the mainland it was the period of the Cultural Revolution and the city was fundamentally different from now. It was more Chinese then and there were only two English pubs. All women wore cheongsam - the traditional Chinese dress. I earned HK$2,285 a month when I first arrived and we all lived at the police station. The physical training was tougher than nowadays but that was fun. My first contract was for only two-and-a-half years, and I never imagined I would be here for more than 33 years now. Hong Kong has become a more international city but it was still exciting then.

Which of your kidnapping cases was the most interesting?

When I was the head of the Criminal Intelligence Bureau, I was involved in many major criminal cases, including kidnapping. I handled 28 cases and recovered 26 victims. Only a young boy and Teddy Wang were missed. The Teddy Wang case was an interesting one. While most other abductors would try to negotiate and bargain for more ransom, Wang's kidnappers kept the dialogue very short giving an order on how to pay the ransom. Later, we found the kidnappers were on a package tour on the mainland and called each day from different cities. There were no signs that Wang was alive so I advised his wife Nina not to pay the ransom. However, Nina insisted on paying as it was her money. I suggested she at least needed to do something to leave a clue to catch the abductors. We split the US$60 million ransom into 13 different currencies, which made it more difficult for the kidnappers to draw the money. I then sent surveillance agents to check all the ATM machines and chased a guy who drew the money out. We followed him and successfully pursued him to Taiwan, catching the principal organiser who was running the kidnapping network. We recovered 95 per cent of the money and we caught the main kidnappers but I was never happy about this case. There were so many unknowns behind the scenes.

What is the key to success in kidnapping cases?

We work for insurance companies to rescue victims when some executives who have been covered by insurance are abducted. There have also been some child kidnappings. I like my work. It is very tough and very high pressure but you feel so good when you see the victims safely rescued. Some of the children I rescued still are in contact with me. The key to handling kidnappings successfully is to never make any decision that would risk the victim's life. Their life always comes first; we can always catch the bad guys and get back the money later.

Why did you quit the police force and join the private sector?

I had a fantastic time as head of the Criminal Intelligence Bureau, where I had 250 staff working for me on exciting cases. Then they wanted to promote me, but I did not want to go back into uniform work again. I thought I could do something else, so I quit.

Do you use your police investigation skills in your current job?

Yes, very much so. I earn a living working for banks and legal firms doing background checks, or investigating fraud cases and chasing missing money. This is the skill I learned when I was in the CIB - to analyse and to interpret data. I never accept anything at face value, and I do not rely purely on anything from the internet. The internet is a wonderful tool but I could not rely on it exclusively. I always cross-check information from other sources and get the information behind the scenes.

Can you make good money from commercial investigations?

It is a highly profitable business. Due diligence is fairly cheap, as little as US$1,000 per case. But for a huge fraud case involving a lot of technology and manpower, it may cost millions of dollars. I charge on either an hourly basis or a project basis. Usually clients do not like the hourly basis charges because they think this encourages people to type slowly. Some prefer charging on an hourly basis with a cap, as that encourages the team to work more efficiency. The worry today is some companies have cut their budgets for due diligence work because of the financial crisis. This is worrying if companies go ahead with a deal without properly checking what they are investing in.

If the company was profitable, why did you sell it to FTI?

I always had a vision of growing my business and then selling it. It was good to be the boss at my own firm, but if you hang on as boss for too long, you may start to run your company as a privately owned firm. I always insisted on running my company as if it were a public company. Also, I had a good opportunity to sell it to a US listed company, which had a much bigger network. And the offer price by FTI, which I cannot disclose, was very substantial. Under the agreement, I would also continue to stay on to run the firm for five years, which was recently extended.

Who are your target clients?

Most investment banks are our clients, as they want us to help check companies before sponsoring them for listing. We also do due diligence for mergers and acquisitions. There is some kidnapping work, mainly to help insurance companies recover victims covered by kidnapping insurance in Southeast Asia. Most of our work involves civil cases but there are also criminal ones. On criminal matters, I only help the victims of the fraud chase their money. I won't help the defendant.

Why do companies come to you rather than the police to investigate an alleged scam or fraud?

The police will not handle a case simply because a company claims there is fraud. The firm has to collect at least some evidence first and it is our job to help them.

FTI is involved in investigating the Madoff scam in the US. Are there similar cases in Hong Kong?

Not many, but there are always scams around in the city and there are increasing cross-border rip-offs and corruption since the handover because there is increasing trade between Hong Kong and the mainland.

How are prospects in China market?

The growing demand of international investors to invest on the mainland has given us huge business opportunities.

There is also the increasing trend of outbound investment from China, so many mainland firms want us to check their buying targets in overseas markets.

Do you rely on technology?

We have to go through e-mails and Blackberry records. Recently, the judge accepted evidence from Blackberry records in the Du Jun insider dealing case.

Since you are so busy, how do you find time for your family?

I would love to spend more time with my daughter and to walk my dog. I also want to polish my Putonghua and read the many books I want to read. There is just not enough time.

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