Latest news with #corporatefraud
Zawya
11 hours ago
- Business
- Zawya
New KPMG study emphasizes need for robust internal controls and monitoring systems to combat rise in corporate fraud in MENA
Riyadh – Financial fraud is becoming a mounting concern across the Middle East. In Saudi Arabia, incidents are increasing by 15% annually, driven by economic transformation, digital integration, and the rapid pace of Vision 2030. Across the wider region, more than 223,000 digital assets remain vulnerable to cyberattacks, pushing information security spending in the Middle East and North Africa to an expected US$ 3.3 billion by 2025. As regional organizations grow in complexity and connectivity, so do the risks — and many of them are coming from within. This is the core message of Global Profiles of the Fraudster 2025, a new international study released by KPMG that sheds light on the individuals behind corporate fraud worldwide. While the report covers global cases, its findings resonate deeply in the Middle East. In Saudi Arabia, where public-private partnerships and mega infrastructure investments are surging, the complexity of supply chains and procurement processes has created blind spots that sophisticated insiders exploit. KPMG notes a marked increase in procurement fraud, unauthorized fund transfers, and conflict-of-interest schemes within large organizations — especially in sectors like construction, healthcare, and public services. Drawing from 256 real-world investigations involving more than 660 perpetrators across multiple countries, the report reveals that the vast majority of corporate fraud is not committed by outsiders or cybercriminals — but by long-serving, respected employees who operate quietly from inside the organization. According to the global study, the typical fraudster is a man between the ages of 36 and 55, often holding an executive or managerial role, and having been with the company for over six years. These individuals are rarely suspected — they're often seen as trustworthy and reliable — which is precisely what allows them to exploit internal weaknesses undetected. The most common type of fraud globally is misappropriation of assets, often in the form of embezzlement or procurement fraud. In over half of the cases, perpetrators worked in groups of two to five people. Most frauds involved losses under US$ 200,000 — but the impact extended far beyond finances, causing reputational damage and internal disruption. Alarmingly, the report found that in 76% of cases, weak internal controls were the key enabling factor. More than half of the companies affected had no formal anti-fraud systems in place. And in most cases, fraud was uncovered not through internal audits or technology, but through whistleblowers and informal tip-offs — a reminder that culture and communication are just as vital as compliance. Nicholas Cameron, Partner and Head of Forensic at KPMG Middle East, said: 'The MENA region remains a prime target for corporate fraud, drawn by the rapid economic growth, personal wealth, and fast tech adoption. Organizations must proactively strengthen their defenses with advanced analytics, real-time fraud detection, and regular strategy reviews, while fostering transparency and cross-department collaboration to reduce opportunities for collusion.' While the KPMG report offers global insights, its relevance to Saudi Arabia and the broader Gulf region is clear. As businesses embrace innovation and scale, the need for robust internal safeguards, cross-departmental accountability, and ethical leadership has never been greater. To read the full report, visit
Times
19-05-2025
- Business
- Times
Stalemate in Mike Lynch estate's HP damages case resolved
A legal stalemate over how much money Mike Lynch's estate may have to pay Hewlett-Packard, in one of the UK's biggest corporate fraud cases, has been resolved. Lynch, founder of the software company Autonomy, was killed in a yacht accident in August, along with his daughter and five others while celebrating his acquittal in a US criminal trial. At the time of Lynch's death, $4 billion in potential damages was looming over him from a 2022 British ruling, when Mr Justice Hildyard found that he and his finance chief, Sushovan Hussain, had manipulated Autonomy's finances to make the company seem more valuable before selling it to HP for $11 billion in 2011. The conclusion of these legal proceedings has been in limbo since the maritime tragedy. Hildyard has been unable to issue a final ruling on how much Lynch's estate will have to pay because his executors would not take up their roles while the case was live and there remains the possibility it would be bankrupted by the proceedings. HP's lawyers, Travers Smith, described it as a 'circularity problem': no one could represent the estate until solvency is known, but solvency could not be judged until the court rules on damages. Hildyard has now approved the appointment of a neutral third party to temporarily represent the estate in the litigation. Jeremy Sandelson is a retired lawyer and former partner at Clifford Chance, a firm which acted for Lynch. The appointment ensures the case can move forward while the estate's future is still uncertain and clears the way for the long-awaited judgment on financial penalties. The judge ruled that Sandelson can begin his duties immediately without waiting for a formal probate grant, which typically takes months. He will be able to hire lawyers and pay reasonable legal costs using estate funds, but cannot settle debts from before Lynch's death unless the court gives further permission. While HP wants $4 billion, this is far from a given. Hildyard said in his original findings that the US tech giant was unlikely to get the sum it was after, because HP may well have bought Autonomy, regardless of the fraud. • How the Bayesian yacht tragedy unfolded, slowly then suddenly In a further twist, Hussain settled with HP in this case for an undisclosed sum at the end of last week. Details have not been made public but it is understood there was no admission of liability. In the latest Sunday Times Rich List the Lynch family's assets were valued at £473 million. Many assets are in his widow's name, such as Loudham Hall, their Suffolk estate, and most of a 7 per cent stake in Darktrace. The cybersecurity business that Lynch backed in 2013 was sold for $5.3 billion to Thoma Bravo, a US private equity business last year, providing the family with more than $300 million and Hussain $100 million. Lynch personally made $500 million from the sale of Autonomy to HP. The sale of Autonomy to HP sparked more than a decade of painful, costly litigation and investigations. In 2018 Hussain was convicted of fraud in the US and sentenced to five years in prison. He was released in January 2024. In 2021, the Financial Reporting Council, the UK's accounting watchdog, fined Deloitte £15 million for 'serious failures' over its audit of Autonomy's accounts. After a long extradition battle, Lynch was sent to the US in 2023 to face a Californian jury but was acquitted along with Stephen Chamberlain, Autonomy's vice-president of finance, last June, shortly before the yacht accident in August. This latest judgment from Hildyard also gives a glimpse of the eye-watering sums of the lawsuits. Lynch still owes £367,578 to Clifford Chance UK and $599,235 to its US office, a hangover from the US legal proceedings.
