Case Studies

CASE STUDIES

CASE STUDY #1

CLIENT

APPROACH

CONCLUSION

A major multinational corporation servicing the MENA market engaged in manufacture, sales and distribution of fast moving consumer goods.

PROBLEM

Client suspected fraudulent activity was going on at its facilities in Cairo, Egypt. Internal audits and investigations failed to discover the nature of the fraudulent activity.

Client did not have the in-house expertise and resources to get to the bottom of the issue and contracted Kane Advisors to conduct a detailed fraud risk mapping assessment.

Kane team immediately started to build up a full picture of the organization and identify third party service providers involved in the operation.

Audit and investigation reports covering 3 years were analyzed and a full review conducted on company policies, procedures and guidelines.

Data analytics was conducted on various large data sets spanning a 3-year period. Outliers and anomalies were identified, indicating multiple suspicious activities.

Kane team deployed to client facilities to conduct inspections and interviews on the ground and gather more information.

Kane Advisors were able to identify the fraudulent activity and the members of the fraud ring who held senior management positions in the company.

All facts and findings were submitted to the client in the final report.

Immediate action was taken by the client. All employees identified in the fraud ring were terminated.

Client implemented new policies, procedures and internal control mechanisms to reduce the risk of a fraud and reported an annual revenue increase of 32% the following year.

CASE STUDY #2

CLIENT

APPROACH

CONCLUSION

The world's largest consumer goods company with 65 individual brands servicing 5 billion consumers in 180 countries.

PROBLEM

Issues involving collusion between contracted service providers and employees that involved the management of non-compliant product and its reintegration into the marketplace as a grey market item that drastically impacted the client's sales of their key product lines.

Kane Advisors team deployed to the clients production facility and mapped the complete supply chain for the products in question.

Kane Advisors identified many gaps and weaknesses in internal controls and found that the actual manufacturing process was being deliberately manipulated to produce non-compliant product specifically so that it would be available through their channels to sell directly into the grey market.

The fraud risk mapping identified the individuals involved in the collusion, immediate actions were taken against the fraud ring and the grey market scheme was shut down.

The client addressed identified gaps and implemented better internal controls to mitigate any possible future collusion between management and 3rd party contractors.

The scrapping management process was re-engineered, and the company was able to regain a significant market share of 5.3% in the following fiscal year and realize cost savings to the tune of US$7 million.

CASE STUDY #3

CLIENT

APPROACH

CONCLUSION

One of the largest bottlers of soft drink beverages in the country.

PROBLEM

The client was unable to account for millions of dollars worth of glass bottles that were reported as being returned to the company by its distributors. The glass bottle management process appeared intact and thus the question of "where is all the glass at?" was raised.

Kane Advisors team deployed to the client's production facility and mapped the entire glass float and its management and found that there were two different processes of glass manipulation happening at the distributor levels.

One involved collusion between the distributors, the truckers, the enterprise management system processors and the facilities managers. The other involved drivers, security guards, re-sellers and unscrupulous distributors.

The fraud risk mapping clearly showed how the schemes were being perpetrated. We discovered that the SAP system used for enterprise resource planning was being manipulated to falsely document both returned glass and discarded or unusable glass bottles.

The illicit sales in glass had impacted the company to the tune of US$20 million over a 2-year period. We were able to completely shut down both illicit fraud schemes preventing further multimillion dollar losses to the company.