Accuracy helps defend against bribery charges in an international case

Business case

Accuracy helps defend against bribery charges in an international case

Context

Our client constructs and sells helicopters and outsources the engineering of some components to three suppliers (two in India, one in Tunisia). The CEO of our client’s parent company was arrested by the Italian authorities under suspicion of bribery. Subsequently, the Indian Central Bureau of Investigation confirmed corruption allegations. Our client was accused of bribing Indian politicians via its suppliers for the purposes of obtaining a supply contract for 12 helicopters to be used by Indian politicians. Our client’s criminal defence lawyer engaged us to re-perform and strengthen the work previously performed by another advisory firm, and we were asked to verify all the transactions between our client and their suppliers completed in the contested period. After this first phase, we were asked to perform a stress test on the new anti-bribery model designed by the company and assisted by another advisory firm to confirm its adequateness.

Key Takeaway

We encountered two major difficulties in performing our work. First, it was challenging to manage such a large volume of both engineering and accounting documentation to produce presentations that could clearly summarise our findings. It was also challenging to explain complex engineering concepts to lawyers because it required additional research on top of accounting expertise to understand the context properly. It was nonetheless well worth the hard work and that much more interesting to participate in large meetings where we and the engineering team simplified technical aspects of a helicopter’s design and accounting implications to the lawyers. The results of the hearings based on our work were that (i) our client was charged with a non-significant fine that was actually unrelated to bribery and (ii) former directors were acquitted of bribery. Thus, we were able to advise our client to achieve a fair outcome in the case and walk home with a state-of-the-art anti-bribery model to support the integrity of their business moving forward.

Accuracy Role

The first phase of our work was an analysis of the activities performed by the suppliers and an investigation of the related financial damages. It was structured as follows: (i) verification of services rendered by the suppliers through investigation of supporting documentation; (ii) verification of the use of supplier services by reviewing how the outputs of the suppliers were used by our client (e.g. internally for production activities, R&D, customer service, or externally for commercial purposes); (iii) verification of the appropriateness of pricing and execution through (a) validating the fairness of the rate applied by the suppliers and (b) analysing the ability of our client to perform the services outsourced itself. In the second phase, our client reviewed and improved its anti-bribery model and the related procedures. We performed stress tests on the model as well as on the protocols related to the procurement of goods, work and services. We also simulated a supplier contract comparable to those in the hearing and performed specific tests on our client’s internal controls.