Industrial accidents resulting in damage to property, death and injury. Suspected graft, bribery and corruption involving employees and suppliers. Suspected kickback scheme. Mismanagement.
Client. International trading company in commodities. Acquired sugar mill in Brazil as part of strategic investment in sugar cane / ethanol / bio-fuels.
Problems. Series of serious accidents over a two month period, including explosions in the distillery and boiler and the accidental opening of a sugar vat while being cleaned resulting in several deaths and serious injuries. Local country management alleged that the accidents resulted from sabotage by previous owners with whom client was engaged in post-acquisition litigation.
Investigation. Investigation revealed that there was no sabotage. However, there were several deficiencies in management and processes which resulted in the explosions and accidents. The allegations of sabotage were in fact a smokescreen to divert attention from local management’s resistance to attempts by corporate management to impose corporate controls. Evidence of graft and fraud were identified relating to agricultural land leases and suppliers of goods and services, involving senior management and procurement.
The names of those involved have been withheld for reasons of confidentiality.
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