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Patisserie Valerie says finance chief arrested

The owner of Patisserie Valerie has said its finance director Chris Marsh was arrested last night and then released on bail. The cafe chain is fighting for survival after revealing on Wednesday it had uncovered “significant, and potentially fraudulent, accounting irregularities”. Mr Marsh had been suspended when these problems were discovered. Later on Friday the Serious Fraud Office said it had “opened a criminal investigation into an individual”. “We can give no further information or comment at this time,” the SFO said without naming the individual. Accountancy firm PwC is reported to have been hired by the company to look at its accounts, which are audited by Grant Thornton. The accountancy watchdog, the Financial Reporting Council, said: “We are looking into this matter carefully and will give full consideration to further action as more facts become available.”

Eighth Samsung employee arrested over biotech fraud case

A Samsung Electronics executive was arrested overnight on allegations of ordering destruction of evidence related to a suspected accounting fraud at a Samsung affiliate. The executive, who was arrested around midnight on Tuesday, is accused of ordering the destruction and manipulation of accounting data and other internal documents of Samsung BioLogics and Samsung Bioepis in 2018, state-run news agency Yonhap reported. Samsung declined to comment on Wednesday. Eight employees from Samsung and its affiliates have now been arrested in recent weeks as South Korean prosecutors broaden an investigation into whether top executives covered up evidence linked to an alleged accounting fraud in 2015 at the company’s biopharmaceutical unit and to the succession of Lee Jae-yong, heir to the Samsung group.

Rogue Oil Trader Causes $320 Million Loss at Mitsubishi Corp. Unit

Mitsubishi Corp. said a rogue oil trader, working at Petro-Diamond Singapore Pte, at its Singapore unit lost $320 million in unauthorized transactions disguised as legitimate hedges for customers. He was, hired in November 2018 to handle oil business with China, engaged in the unauthorized deals since January, disguising them to “look like hedge transactions,” the parent company said. The oil market has a long and colorful history of trading busts. In 2004, China Aviation Oil suffered its infamous $550 million blunder, when the company fell afoul of a surge in prices. Another Japanese trading company, Mitsui & Co., suffered a loss of $81m in 2007 due to hidden naphtha trades. The dealer and his supervisor were imprisoned. And in Dec 2018, two top officials at Chinese oil trading giant Unipec were suspended following losses of about $656 million.

Toshiba sues former employee of U.S. unit, citing fraud

TOKYO (Reuters) – Toshiba Corp said on Thursday it filed a lawsuit against a former employee of a U.S. unit for conspiring with a contractor and defrauding the Japanese industrial conglomerate.
Toshiba said in a statement its internal assessment had found evidence that a former facility manager at Houston-based Toshiba International directed work to a construction contractor at inflated prices and received kickbacks.
Toshiba is still investigating the scale of damages from the fraudulent transactions, which started no later than 2011, as well as whether any other employees were involved in the fraud. Toshiba is recovering from accounting scandals that eventually led to the bankruptcy of U.S. nuclear power unit Westinghouse and the sale of its prized memory chip unit.

Sample of Risk Mitigation activities

Financial frauds have become customary in daily business activities these days. Detecting and preventing accounting irregularities is a challenging exercise for corporates, but it is especially problematic when it stems from your own employees. Financial frauds like illicit financial activities seen at Patisserie Valerie, Mitsubishi losing $320m due to disguised unauthorised trades, unsecured financial evidences being damaged at Samsung Electronics and Toshiba defrauded by internal parties are just the tip of an iceberg; according to the PWC global economic crime and fraud survey report 2018, the global economic crime rate has gone up to 49%, up from 36% in 2016.

Risk of Illicit financial activities seen at Patisserie Valerie could have been mitigated with our Treasury Management System. Manipulating accounting figures in decentralized and error prone spreadsheets is straightforward where reconciliation is time consuming. With Finvisage, it is impossible to alter data without user getting into limelight. Our monitoring system would have recorded financial alteration sources there and then giving Patisserie Valerie an opportunity to take corrective measures internally without getting their stock taking a big hit due to public release.

Samsung Electronics’ unsecured financial data was shredded due to inadequate security measures. Companies rely on Protected spreadsheets which does not provide security because they can be effortlessly hacked. Finvisage’s security is twofold, it embrace bank level encryption and authorization request from upper management for alterations. This would have left no scope for fraudsters to vandalise financial data.

Apart from Mitsubishi, there are numerous more companies encountering rogue trading. Explanation for most of such cases is their current recording system platform (spreadsheets) for listing trades and matching exposures for hedging purposes, but the matching concept adhered is complex and exposed to miscalculation and falsification. Finvisage would have linked exposures and trades appropriately reflected on a blotter allowing user to monitor standalone trades. The unauthorised trades were made since January 2019 and revealed in September 2019. If Finvisage was in place, the internal controls team could have caught the trader there and then preventing the chain of unauthorised trades.

Similarly, Toshiba witnessed fraudulent transactions among a vendor and an employee which took place in 2011 and revealed in Oct 2019. Intercepting each transaction is a complicated task which is usually not customary as it entails heavy costs. Although, creating prompt reports can allow analysts to identify outliers and fluctuations in a dataset, creating them is a time consuming task leaving insufficient time for analysis and any break in links or miscalculation of formulas can generate irregularities. Finvisage provides automated customisable reports which provides appropriate time rationing among financial reporting and financial analysis. According to our example of Toshiba, automated reports with data visualization could have been used for internal assessment purposes for tracking inflated transactions to a good extent.


One of the most common issue majority of corporates witnessed is lack of internal control which is typical with current systems (spreadsheets) in place. Foremost reason for internal control shortfall is it’s high monitoring costs because spreadsheets are vulnerable to manipulations and difficult to track. In a tech-driven era, businesses require a stringent system for effective monitoring and governance to satisfy internal controls – Finvisage is one such product. Our system is capable to drag down monitoring and governance cost substantially in combination with higher efficiency through data centralization, automation and data governance.