Client. Internationaltrading company in commodities. Acquired sugar mill in Brazil as part ofstrategic investment in sugar cane / ethanol / bio-fuels.

Problems. Seriesof serious accidents over a two month period, including explosions in thedistillery and boiler and the accidental opening of a sugar vat while beingcleaned resulting in several deaths and serious injuries. Local countrymanagement alleged that the accidents resulted from sabotage by previous ownerswith whom client was engaged in post-acquisition litigation.

Investigation. Investigation revealed that there was no sabotage. However, there wereseveral deficiencies in management and processes which resulted in the explosionsand accidents. The allegations of sabotage were in fact a smokescreen to divertattention from local management’s resistance to attempts by corporatemanagement to impose corporate controls. Evidence of graft and fraud wereidentified relating to agricultural land leases and suppliers of goods andservices, involving senior management and procurement.

The names of those involved havebeen withheld for reasons of confidentiality.

Is your company facing unusuallosses? Is improper conduct suspected? Wolfe Associates can investigate,identify those involved, detect and correct vulnerabilities and recommendcounter-measures.

Tags: Bribery and corruption, kickback scheme,mismanagement, graft.