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The center, which is affiliated with HELP University College, stated that economic crime manifests itself in various forms and has become increasingly more sophisticated and difficult to detect, calling it “a cancer to business and to the economic system.”
Many people are unaware of the implications of economic crime. Today’s corporate culture makes it imperative to promote a greater understanding of the issues involved in the detection, prevention and containment of economic crime, corruption and abuse.
According to the center, economic crime includes fraud, corruption and bribery, identity theft, money laundering, cyber crime, accounting and financial fraud, which affects everyone from the young to the old and from the rich to the poor, as well as corporations, both large and small. This type of crime is committed by unscrupulous and unethical people who rob others of their wealth and livelihoods and affect the economic growth of their respective countries.
The center shared that while many have experienced or heard of such crimes, most do not know how to manage, contain or eliminate them. Therefore it is important to have a strong, ethical workforce and zero tolerance toward such crimes, to ensure that corporate and economic wellbeing is protected.
Akhbar Satar, director of the center and president of the Malaysia chapter of the Association of Certified Fraud Examiners, said, “In the past decade, the number of reported cases of fraud and corruption has grown dramatically. Experience shows that the worst victims of economic crime are those organizations run by professionals who thought it could never happen to them – for example, the Enron scandal (in the United States) that brought about the collapse of one of the largest accounting firms in the world – Arthur Anderson – and the Societe Generale case (in France) earlier this year, which involved a rogue trader.”
Fraud has been defined as the intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right. Besides being a worldwide phenomenon, it remains one of the most distressing issues for businesses, and both the public and private sectors are vulnerable to it.
Malaysia has had its fair share of large cases of fraud, namely the collapse of the Bumiputra Malaysia Finance Company in the 1980s, the financial scandal involving state-owned Perwaja Steel in the 1990s and the accounting fiascos of the Transmile Group. There have also been other cases of fraud committed in procurements and contracts associated with corporations and banks.
And what about the political cases of fraud like those involving the electoral system? Do they not also tarnish the country’s image and name?
As upright citizens, Malaysians must call for greater enforcement efforts by authorities. In reality, however, this may be easier said than done. Proper enforcement requires hiring personnel who are skilled, knowledgeable, incorruptible, fair-minded and merciful.
What this country needs is a strong value system based on honesty, responsibility, humility and love. This is possible only if there is good leadership and good self-governance.
Due to increased enforcement efforts by authorities, regular media coverage of cases of fraud and the call for greater accountability and transparency in government activities, public concern about fraudulent activities and corruption is increasing. This is a welcome change.
The Malaysian government is equally concerned about the need to ensure integrity and transparency in the public sector. It is committed to combating corruption and making certain that Malaysia remains attractive to foreign investors.
The government is keen to improve Malaysia's position in various international perception surveys such as Transparency International’s Corruption Perception Index, which put Malaysia in 47th place in 2007. The introduction of the National Integrity Plan and the establishment of the National Integrity Institute in 2004 have augured well for the objective of promoting greater awareness of economic crimes.
Fighting fraud is not just about engaging in anticorruption activities; it also involves instilling good values in society and shouldering the responsibility to keep society and the business world free of corruption.
Warren Buffett, an American investor and currently the richest man in the world, once said, "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.”
Personal greed lies behind many cases of fraud. These cases occur when those committing fraud are able to exploit lapses in vigilance by those entrusted with the management of public funds.
What is transparency then? Transparency, accountability and integrity, or TAI, are like the “three musketeers” of fraud prevention. Transparency is the right of stakeholders to know pertinent information about how public funds or monies are kept and spent when the government and its agencies implement policies and programs.
Cases of fraud often involve sophisticated methods of deception, such as false declarations, data manipulation in information technology systems, false claims, irregularities in tender procurements, purchases of substandard materials and nonconformity to contractual specifications.
In sum, there are laws in Malaysia to contain and prevent economic crimes from happening, however sufficient enforcement of the laws is lacking.
To quote the great soul Mahatma Gandhi, “Remember, the things that will destroy us are politics without principle, pleasures without conscience, wealth without work, knowledge without character, business without morality, science without humanity and worship without sacrifice.”
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(Sekina Joseph is a writer, a social activist, and a member of the Malaysian Interfaith Network based in Kuala Lumpur, Malaysia. She can be contacted at sknjoseph@yahoo.com. ©Copyright Sekina Joseph.)
