Survey: Millions of ringgit lost to corporate crime

KUALA LUMPUR: Millions of ringgit are lost annually in the corporate sector due to a sharp rise in the three scourges of corruption, bribery and cyber crime, according to an independent global economic crime survey.

PricewaterhouseCoopers (PwC) Consulting Services Associates (M) Sdn Bhd senior executive director and forensic lead Alex Tan said the results were based on a survey of 17 industries from the private sector, government and state enterprises.

“For bribery and corruption, we cannot ignore the fact that there is a marked jump.

“In 2014, it was 19% and now, it has gone up to 30%,” he told reporters while announcing the findings carried out by PwC yesterday.

Tan also noted a sharp increase in hackers, who pose a growing threat to the interest of most companies but were not being properly addressed.

“Cyber crime dropped from 31% in 2014 to 30% this year. However, we have to take into account that it was only 5% back in 2012, so this is a huge jump,” he said.

Tan said that although 30% of companies fell victims to cyber crime, some 96% of board of directors did not request for monthly reports on such information.

The survey revealed that only 35% of companies have a fully operational incident response to cyber crime while three in 10 have no plans at all.

Tan said men aged between 31 and 40, with a university or college education and who worked with the company for between three and five years were likely to commit fraud or cyber crime.

“Some 30% of companies lost about RM400,000 while 13% suffered about RM1mil in losses annually to economic crimes,” he added.

Besides financial loss, companies also suffered collateral damage due to economic crimes. This, he said, included effects on employee morale (68%), company brand and reputation (46%) and shares (28%).

To better address these issues, Tan suggested that companies adopt a whistle-blower policy that includes investigating anonymous complains.

PwC Malaysia managing partner Sridharan Nair said local companies should address cyber crime more effectively to better protect their interests and customer data.

“Although 98% of top management make it clear to their staff that they are against corruption, one in three companies believes it will experience economic crimes in the next two years,” he said.