We recognise that IT, with our intuitive forensic experience skill set over many years, allows a unique solution to identify material questionable transactions, often not reported as suspicious by the entity. Working together with independent advisors, using the latest information technology, IRM has achieved hundreds of millions of Rands in recoveries, savings and/or settlements.
Our philosophy: Test key representations by seeking the objective facts, supported by reasoned research, investigation and probable inference.
Examples of some of these success stories:
We recently analysed the transactional data of a large formerly JSE listed service provider with over 30 000 employees and turnover in excess of R5 billion in various jurisdictions. Our findings startled the executives as they trusted that the controls in place were adequate to prevent highly questionable transactions across numerous functional areas of the business. We are now working with the client to build system controls to proactively identify questionable transactions to assist in prevention. Their ongoing Masterfile management was hopelessly inadequate, which gives rise to high potential fraudulent conduct.
In another case, an international entity was defrauded by a senior employee over 10 years by fabricating invoices for fraudulent work purportedly done by an entity related to his wife and approving these amounts which were below the threshold level of his authority, hence avoiding detection for 10 years, which resulted in losses of over R20 million.
In another matter where the client did not reconcile monthly supplier invoices to supplier statements erroneously duplicated payments by the client were undetected until we identified, such, resulting in a direct recovery form the suppliers.
Minority shareholder protection and corporate governance abuse
We have assisted many minority shareholders in oppression cases arising from abuse by a controlling shareholder who failed to respect corporate governance. This assistance entailed forensic business review processes including corporate governance compliance testing and forensic investigations.
Corporate governance and investment management breaches
A leading financial institution that manages billions on behalf of its clients was concerned that certain managers were not acting with the utmost good faith. A@L’s investigation revealed inadequate controls, requiring significant changes to operational investment processes thereby ensuring sound investment and corporate governance.
Investigation of internal credit processes and institution of insurance claim
An international financial institution lent over half a billion Rand to its client who, it transpired, had perpetrated multitudinous fraud against it. IRM (then as A@L) assisted in the investigation of these frauds, quantified the claims, working closely with the client, liquidators, their legal advisors and IT specialists to quantify the damages claims, which have been instituted against various parties including the auditors for a failed audit.
Damages arising from breach of contract
A US-based international supplier of technology for space utilisation management systems mandated IRM to independently verify the
quantum of the damages in a claim arising from breach of contract by a South African counterparty. After painstaking research and
reconstruction, IRM (then A@L) determined a damages claim of some R250 million, including interest.
Cross border forensic accounting litigation support
A client in a neighbouring country instituted proceedings against a financial institution and other statutory bodies for alleged improper conduct regarding the correct process for execution and subsequent sale of property. IRM assisted A@L who was mandated to provide an opinion on whether the transactions giving rise to the sale in execution and the subsequent supporting transactions were regular and in the normal course of business. Judgement was in favour of our client.
Directors’ malfeasance claims arising from reckless and fraudulent trading
Liquidators acting on behalf of creditors and a financial institution that lent over R500 million to a failed entity mandated A@L to
investigate the transactions giving rise to the collapse of the entity. Fraud on a grand scale was uncovered where over 20 related party trusts and other entities were used to siphon tens of millions of Rands from the failed company for the indirect benefit of the controlling shareholder/director and entities under his control. A@L uncovered potential recoverable amounts from a variety of sources including voidable dispositions in terms of Sections 26, 29, 30 and Section 31 of the Insolvency Act.
Lack of corporate governance and distressed lending/investment management
A leading South African banker, in unrelated matters, provided facilities of R50 million and R100 million to two of its clients. A@L
assisted in providing litigation support to investigate and reconstruct the underlying financial records and debtor amounts owing
thereby achieving significant recoveries through a Section 417 enquiry process in each instance. A@L also provided litigation support to sequestrate the trusts, related party entities and hold formal enquiries utilising the mechanisms of the Companies Act to maximise recoveries.
Determination of negligence of the independent auditors
A@L has provided litigation support in some notable claims against auditors, one of which lasted almost 12 months in the High Court.
Litigation support to review the role of independent auditors to ascertain if there has been a failed audit, which may give rise to
potential negligence claims, is an important service offering of A@L.
Appointment as joint investigators/experts
A@L has been appointed in numerous instances as joint experts to assist in various litigation forums. This mechanism has proved to bea cost-effective manner of reducing the conflicts and disputes between parties.
Pre- and post-investment/lending due diligence
A@L has assisted various banking and investment company clients in conducting pre- and post-lending business reviews providing
informed, objective and independent analysis prior to advancing further credit or investing further in distressed customers/investees.
Impeachable disposition claims arising from insolvency
In various unrelated liquidated entities, A@L assisted liquidators and creditors to pursue claims of tens of millions of Rands arising from