The global financial crisis has been a windfall for those involved in uncovering corporate skullduggery.
Requests by companies for fraud probes has doubled over the past two years as tough times focus attention on losses from illicit activity, according to Tadashi Kageyama, a senior managing director and head of investigation at Kroll's Asia division.
'The demand for fraud investigation and [investigations involving] commercial disputes is huge,' said Kageyama, noting that when economic conditions were buoyant, company executives were busy expanding and often neglected potential fraud within their company. They argued profits could offset any losses incurred by fraud.
'When business is doing well, companies tend to pay less attention to irregularities as they want to move things forward and not spend time and effort checking areas of possible fraud,' he said.
'But during an economic downturn, executives emphasise costs and operations much more. They check all the details of an operation, which helps identify suspected fraud conducted by staff or business partners.'
Kageyama said that when the market was up, investment bankers and investors focused on securing deals and paid less attention to due diligence. But when the market takes a downturn, bankers and investors were more cost-conscious and demanded background checks on business partners and acquisitions targets.
'All of these factors boost demand for commercial investigative services,' he said. 'This will continue over the next few years because many overseas companies are eyeing expansion in China and other emerging markets.'