Digital Due Diligence: Uncovering Violations in China
This year’s historic stock market rise and crash was one of the most visible sign of overall economic turmoil in China. Other key indicators include China’s lowest annual growth rate in decades, concerns about stagnating real estate prices and the first ever bond default by a state-owned enterprise. As a by-product of these significant and rapid economic changes, China’s already high instances of bribery, embezzlement, kickback schemes, insider trading, theft of trade secrets and other white collar crimes may see a further rise as dramatic and swift as that of stock prices this spring.
China’s current compliance challenges are a continuous source of concern for multi-national companies operating in China. The government’s most recent campaign against corruption has made progress in this area, but in the near future these issues will remain a high priority for compliance professionals. Identifying and remedying these violations can be expensive and disruptive and often leads to the dissatisfying result of inconclusive evidence ending in a negotiated (and usually paid) resignation for suspected employees.
The rise of digital due diligence, and new data compliance techniques, offer a powerful new tool to complement and strengthen traditional methods for legal and compliance departments to close the gap and obtain more effective results.