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I came across this news report in Australia, about a finance division manager of a big public listed construction company, who was able to dupe his employer  over a period of 12 years by creating his personal  supplier bank account  into which he funnelled company’s fund for doing phantom consultancy work! The amount stolen was $20.7m.

I cannot even begin to imagine how he could get away with it for such a long time. Where was the flaw in the customary annual audit report which such a company is subjected to?  What about the check and balance mechanism and where did it go wrong? Where are the loopholes that he capitalised on? It was claimed that he was the only one  authorised to sign off on the transactions of such work.  This looks like a fish and cat’s story. Explicitly, human greed, lack of integrity, an inwardly low self-esteem and poor self-regulation are contributory factors in this fraud.

The pressure of being finally discovered must have been tremendous for him to bear as he pleaded guilty at the District Court to all charges and was scheduled  for sentencing  in April 2013 and in the meantime he remains in custody. The company, in turn, will be hard pressed trying to get their money back since much of it is already in offshore  bank accounts.

A TRUSTED finance manager was able to steal $20 million from the country's largest construction firm (photo Adelaidenow.com)

Damien Victor O’Carrigan, 58 , a TRUSTED finance manager was able to steal $20 million from the country’s largest construction firm (photo Adelaidenow.com)

Whither  the company’s monitoring through internal audit and the independent external audit? It is interesting to study this  case and see how this man could get away with the deception for so long.  The fraud was reportedly discovered during a cost-cutting audit during this economically lean time.

I cannot wait to get a close friend, a member of the Queensland judiciary to narrate and help explain to me the  anatomy of the fraud that had gone undetected for more than 10 years. Earlier on at the Brisbane Magistrate court, the fraudster had been refused bail as  he was considered to be a flight risk  on account of  the massive amount of money he has accumulated that could be easily electronically transferred offshore.

Suffice to opine that  if it could happen in that so-called advanced country, it can also happen here in Malaysia.

The auditing of companies in Malaysia is apparently not as stringent as that in the UK and thus could lead to substandard reports which would fail to give  the true picture of a company’s financial health. Creative accounting can certainly stand side by side with creative auditing. Corporate governance, in this instance, plays an important role to protect stakeholders and shore up investors’ confidence.

Just to digress, had this man, O’Carrigan, died and put all his ill-gotten money into offshore accounts, his beneficiaries would certainly  be filthy rich. It reminds me of an ex  Timbalan Ketua Polis Negara ( Deputy Inspector General of Police of Malaysia),and who once held the post of the  Director of Narcotics  here . Following his death,  his relatives were reported to be fighting over his estate worth RM47.3m in properties and savings. Now, where and how the heck was he able to accumulate that massive amount of wealth on his policeman’s salary? Even after 30 years of service and all those  post-retirement board of directors’  jobs? Go figure!

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