March 2014, London
Nearly 30 years since the worst industrial disaster the world has ever seen, the legal case is slowly advancing. Union Carbide Corporation is, once again, wanted in the Indian courts. Initially, Dow Chemical (the owner of the company) was able to block the summons, but the blocking order has now been removed, and Dow is expected to attend the court in July.
There is no doubt that a case like this should end up in a criminal court, and that only criminal justice bears enough depth to indicate that someone or some organisation should assume moral responsibility (or lack thereof ). But the question that I would like to ask here is – to what extent should liability like this be inherited? Again, it is criminal liability that I am referring to – the kind that entails a deep sense of moral fault or responsibility – not civil liability, which can be easily transferable and settled. But if a certain legal person (i.e. a company) committed a criminal offence, can that liability be transferred to or inherited by another legal person, who happens to acquire it? As much as we want to see justice being achieved, I am not sure we have a straight answer to that.
January 2014, Singapore
As I was sipping my coffee in an air-conditioned hotel in Singapore, my thoughts wondered back to the sweltry roads of Bali, where I’d discovered (and come to appreciate) a more natural way of living, despite its mismatch with any of my usual expectations regarding social norms, personal hygiene, road traffic, or health and safety. A way of living that was less comfortable, possibly more risky (for my standards), but definitely more fulfilling. One’s rapports with the land, the sea, the Gods and the departed were all key aspects of that way of living, all intertwined in a genuinely organic way.
Over there, religion and the economy, for instance, are two facets of the same set of beliefs, which is directly translated into norms and action at every level of life. A family would bring offerings to the temple both for their own health and happiness and for their source of income (be that a shop, a rice field, or any other job). They would have a dedicated space in their home temple for the soul of their parents, as well as a special ceremony for any new endeavour. They have special gods for every aspect of life, and distinct ways of talking to each of them – because they are as moody and alive as humans. Mother land is one such god, and the Balinese wouldn’t dream of upsetting her in any way.
Stakeholder engagement in Lovina
Turn of the year 2013/2014, Bali
New Year’s Eve is a time for celebration at our villa in North Bali for more reasons than one. It is when the winners of staff annual awards are announced. They are selected through a rigorous evaluation process, based – as the manager explains – on a range of factors, from skills and attendance to less obvious ones such as attitude and reliability. For example – he tells us – P, who has just won the best employee award, never called himself sick last year; “if he was unwell, he would still come to work, deal with any urgent matters, and then be excused. Very reliable – that’s what we need.” That was true, we knew it from our own experience, as P was the one who’d helped us through our booking process, with great friendliness and efficiency.
What next in Singapore?
June 2013, London
18 years ago, Nick Leeson made history by single-handedly causing the collapse of one of the oldest and most successful British banks. He was an employee of Barings Futures Singapore – an indirect subsidiary of Barings Plc. His speculative investment activities in Nikkei futures contracts led to losses of over £848 million, which exceeded the value of Barings’ shareholders’ funds. The bank was sold to ING for a nominal amount and Leeson was sentenced to six and a half years in prison.
Ten years later, a Singapore-listed Chinese company, China Aviation Oil, caused another stock market scandal by failing to provide information on losses from oil derivatives. Since then, the Singapore exchange has been trying to tighten listing procedures for Chinese companies. As a city state that inherited the English common law system and where nearly a fifth of the listings are Chinese companies, Singapore may have some balance to strike.
The overall investor confidence in the China-related sector may sometimes be affected by difficulties such as the recent debt servicing problems experienced by FerroChina, the steel-coil maker. Add to that the recent UK proposals to introduce new criminal offences for top management of big banks, and the resulting atmosphere may not be very comforting, especially with regards to transparency. Watch this space.
An article about the escalating white-collar crime in Singapore is available here.
Hello Hong Kong
May 2013, Northumbria
It is 30 years since the Carrian Group collapsed, following a sharp drop in property prices in Hong Kong. The police discovered accounting fraud had been committed during the purchase and sale of the company’s largest acquisition – the Gammon House, bought for HK$1 billion and sold for HK$1.6 billion. A Bumiputra Malaysia Finance Limited auditor was murdered during the investigation (BMFL had been the biggest lender to the Carrian Group). The auditor had been commissioned to inspect BMFL books to determine if the bank had improperly approved loans.
This was later confirmed and corruption offences were alleged against several BMFL executives. After more than a decade of international chasing and re-trials, only a handful of bankers received significant sentences – between 3 and 10 years. The former BMFL chairman, however, was only sentenced to one year in prison, after pleading guilty to conspiracy to defraud. In what can only be described as a mind-boggling decision, the High Court Justice Dennis Baker QC declared, in 1987, that the mastermind and founder of Carrian, George Tan, who had been a Singaporean illegal immigrant in Hong Kong, had no case to answer.
What I would be most interested in finding out is, what has taken place in Hong Kong and the whole Asian region over the last 30 years? If another Tan were to get busy at work in the region today, what would their prospects of getting caught be? And what about preventive measures – has any regulation been put in place to make sure that no loopholes exist anymore that can allow white-collar crime to plague institutions at such a scale?
The Hong Kong Independent Commission Against Corruption’s report on Carrian is available here.
An analysis of the Carrian case is available here.