Corporate scandal and white collar crime on the rise

‘O cursed lust of gold\, to what canst thou not compel the heart of man!’ - Virgil Aenid (greed)

This column dedicated to the notion of making Sri Lanka the Wonder of Asia turns its spotlight today on the dreadful

suffering of Sri Lankans due to the fraudulent activities of persons masquerading as great philanthropists thereby building public trust and then embezzling the monies deposited in the companies established by such swindlers or conmen who pose as employment agents and abandoning the employment seekers in foreign lands after defrauding all their savings thereby defeating the aspirations of Sri Lankan society to be rid of such scoundrels. and the dreadful anguish caused due to such white collar crimes.

Hans Wagener, Territorial Senior Partner, Price-waterhouse Coopers Germany, recently addressing the Sri Lanka Institute of Directors, stated that “although there was a rude wake up call with Enron and World Com, white collar led corporate scandals can happen again. Almost 50% of companies are victims of fraud, larger the size of the company greater the risk of white collar crime, with two thirds of these offences being detected by chance. The criminality of employees and business partners is increasing”. He described the typical characteristics of white collar criminal” as one aged between 31 and 50 years, socially discreet, does not usually have a criminal record, has been with the company for some years, is educated above average, male (only 7% are females) and works with a probability of 32% in the company’s top management of the company”.(Sunday Times FT -05th November 2006)

There have been many instances reported in the media where depositors in various finance companies have lost their

deposits due to embezzlement by the persons who are in charge of such companies. The laws governing the control of finance companies in Sri Lanka appear to be inadequate in dealing with the increase in such criminal activities. Although there are provisions in the law for the seizure and sale of the personal assets belonging to the directors of such companies to raise funds to repay the depositors it has been observed that for some reason these provisions do not seem to be utilized. Elderly persons who have deposited their retirement benefits such as EPF and ETF proceeds and gratuity payments in the hope of living on the interest generated by such deposits have been reduced to the state of begging and borrowing from their children, relatives and friends for their medical care and sustenance.

People who sold their residential properties and deposited the proceeds of such sales are on the streets without a roof over their heads. Children who were studying abroad with money sent by their parents who had deposited their savings in these companies had to abandon their studies and return to Sri Lanka with their future prospects destroyed, While a person who robs a loaf of bread or plucks a coconut from anther’s land to feed his children ends up in prison these wealthy scoundrels retain their luxurious life styles and live in comfort while the hapless depositors are living in virtual hell.

Some of these swindlers even when they are in remand prison enter the prison hospital or private hospitals and have other prisoners pushing them around in wheel chairs while their food is supplied from luxury hotels and delivered to the prison. Whither justice is the question that boggles the minds of Sri Lankans who encounter this disgraceful situation in our society, as the law appears to be painfully slow in its operation against these swindlers.. Poor employment seekers are taken for a ride by unscrupulous agents who collect their life savings and abandon them in foreign lands and escape with their ill gotten gains. It is time that these swindlers face proper punishment before the law as Sri Lankans are fast loosing their confidence in the justice system in our land.

Let me conclude in lighter vein with the views of Winston Churchill a former British Prime Minister on Whisky, which many of these white collar criminals habitually consume

Winston Churchill was once asked about his position on whisky. This was his reply:

“If you mean whisky, the devil’s brew, the poison scourge, the bloody monster that defiles innocence, dethrones reason, destroys the home, creates misery and poverty, yes, literally takes the bread from the mouths of little children; if you mean that evil drink that topples men and women from the pinnacles of righteous and gracious living into the bottomless pit of degradation, shame, despair, helplessness, and hopelessness,

Then, my friend, I am opposed to it with every fibre of my being.” “However”,

“if by whisky you mean the oil of conversation, the philosophic Wine, the elixir of life, the ale that is consumed when good fellows get together, that puts a song in their hearts and the warm glow of contentment in their eyes; if you mean good cheer, the stimulating sip that puts a little spring in the step of an elderly gentleman on a frosty morning; if you mean that drink that enables man to magnify his joy, and to forget life’s great tragedies and heartbreaks and sorrow; if you mean that drink the sale of which pours into our treasuries untold millions of dollars each year, that provides tender care for our little crippled children, our blind, our deaf, our dumb , our pitifully aged and infirm, to build the finest highways, hospitals, universities, and community colleges in this nation,

Then my friend, I am absolutely, unequivocally in favor of it.”" This is my position, and as always, I refuse to compromise on matters of principle.

The writer is an Attorney-at-law