International Business Crime & Fraud

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International Business Crime & Fraud

Published September 2022


Sherbir Panag

Firm: Law Offices of Panag & Babu
Country: India

Practice Area: Business Crime

  • No. 82, First Floor
    Phase-III, Okhla Industrial Estate
    New Delhi 110020

Please summarise the work your firm does and the ways in which you distinguish yourself in the provision of business crime & fraud law advice.

Our firm – the Law Offices of Panag & Babu is the largest multi-disciplinary business crimes practice in India. We take pride in the firm being viewed as the pre-eminent firm of choice to act for corporations facing business crimes, corporate governance or other allied challenges in India.

What distinguishes our practice is our deep experience in handling multi-jurisdictional cases of fraud, bribery, money laundering or other governance breaches. We understand global enforcement and regulatory trends, which enables us to plan and execute investigation, defence or compliance enhancement strategies through the lens of what would be expected not just in India but outside the country as well. In a globalised world with dynamic enforcement agencies, legal responses to business crime cannot become unidimensional as we have seen in the recent cases; which is something we have significant experience in.

Our practice has been to have a sector and jurisdiction (across India) agnostic approach to business crimes. As a business crime specialist law firm – we provide a comprehensive advisory framework for our clients which would include not just internal investigations or compliance advocacy; but also coordinated crisis management / response and the defence of government investigations, enforcement actions, and ensuing criminal / civil proceedings.

How have you had to adapt your work methods in light of COVID-19, in order to maintain your existing client relationships?

We were fortunate to have undertaken steps at the onslaught of the pandemic, to move to a work from home model before the more formal lockdown in India came into being. As early as 16 March 2020, we had intimated our clients about our business continuity plan – which was approximately 2 weeks before the rest of the country shut down. This allowed us to test our technology solutions, undertake amendments, switch heavy bandwidth applications for lite versions and we were ready and better placed to service our clients when their offices closed.

We also took measures of not having our entire system linked to a single source product like Webex or MS Teams, but rather allowed access across all platforms – to prevent firewall issues for clients. This again served us well and did not disrupt communication.

We took a conscious decision to not bombard our clients with alerts / webinars but rather have personalised engagement specific to their needs and challenges.

What does your current workflow look like – and what are some of the current business crime issues clients are bringing to your attention? If possible, please provide a recent case study, demonstrating your service offering in emergency management.

How has the interruption of business chains at a global level and the break of transactional commercial relations affected your current caseload? Has it led to new forms of business crime, such as companies operating outside the guidelines of social distancing and employee welfare? Please give details.

We have continued to remain very busy through the past few months, with our capacity of work being 130-140% per lawyer, which is in fact in sync with comparable quarters outside the pandemic. The workflow has been to a large part (almost 70 percent)  the culmination of pre-pandemic investigations and matters.

In terms of new matters, we have seen significant increase in auditors alleging forged / fabricated documents being submitted, as finance teams rush to close books; allegations of bribery to have businesses enlisted as ‘essential services’ or other relaxations for operations; and response to enforcement action becoming more complex as courts are not fully functional.

We recently assisted a Fortune 500 company in the essential services space, to take steps to enhance compliance mechanisms to further strengthen its anti bribery program, given government interaction for operational continuity (obtaining curfew / movement passes) was enhanced. This program was put together in less than a week factoring in the unique requirements of every Indian state, where our client operated with a field force of more than 3000 employees.

We have also successfully approached virtual courts to freeze assets where our clients were defrauded, as well as to obtain de-freezing orders against our clients who were under investigation. All in all it’s been 14 plus weeks of crisis work predominantly.

What types of COVID-19-related fraud have arisen, in your experience? (i.e. cyber-attacks on citizens and institutions, or the phishing and theft of data, IP and funds.) How do you advise clients to mitigate – and litigate against – these activities?

Cyber attacks have definitely been at the forefront and organisations across the spectrum (small / medium / large) have been victims. The Indian government has been issuing timely advise on the increase of phishing attacks.

Separately, we are likely to see an increase in frauds associated with payment processing as physical verification and age old control principles of maker / checker are restricted for companies that don’t have state of the art accounting software.

Providence and lessons from the 2008 financial crisis have shown us how criminal misconduct risks including fraud and bribery increase, with business disruption. Armed with hindsight, it would be prudent to be prepared, ensure compliance and governance is strengthened – as opposed to being ignored or becoming a budget casualty. Compliance functions, will have to rely significantly on technology and remote working for tasks that customarily were in-person or on-site; but the lack of in-person meetings cannot be the cause to bring the compliance organisation to a grinding halt and increase risk. The daunting challenge notwithstanding, this also is an opportunity to digitise compliance.

Financial companies are increasingly using data science to detect fraud, anomalous transactions and insurance scams. How have these ongoing developments in AI techniques assisted your offering in business crime & fraud law (i.e. in terms of compiling evidence and building a case)?

I believe this is still some time away in terms of actionable new tools to find their way to the practice, as compared to the usual suspects for document review, public record searches, transaction arrangement.

How has your litigation work been affected without, for example, the option to go to court?

Litigation work has been challenging not in terms of quantum, but rather on account of the weak technology platforms used by our courts. I must admit this has been changing on a rapid basis with our courts ramping up their infrastructure.

While for the first weeks of the lockdown, our court appearances drastically reduced – the new normal is quick catching up and we are getting back to court for more substantive hearings as opposed to only those with urgency.

How do you ensure a well-informed advisory scope for clients who are based in other jurisdictions, or have operations based overseas? For example, are you especially active in network events such as conferences wherein information is exchanged among member firms?

In May 2019, a few leading business crime practices established the Concilium network to bring together jurisdictional experts in business crimes. Our focus was not to have one dot in every country like some of the larger networks, but rather be limited to high quality / invitation only membership. The network has extensively relied on each other to stay abreast with typology of business crimes, country specific responses and regulatory trends during this period.

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