The recent financial crisis could possibly be the cause of the increase in company fraud.

The Financial Tsunami has affected the economy of Hong Kong, and it is likely that more small and medium sized companies in Hong Kong will fall prey to credit crunch. Companies of all sizes have to beware of the fraud committed by insiders. Therefore, Commercial Crime Bureau's (CCB) publicity campaign for 2009-2010 aims at delivering the message of corporate governance from a police perspective.

Corporate management are supposed to be the people who have knowledge about corporate governance. Since 1996 as many as 26 cases involving listed companies are related to director's misappropriation because most of the listed companies in Hong Kong are traditionally family-owned. The director and the proprietor are in fact the same person but the proprietor mistakenly believes he wholly owns the company's assets and wrongly uses them.

In the previous cases, most criminals were management staff, and malpractices and violation of professional ethics were commonplace. So the Police have suggested that companies make a clear-cut distinction between the duties of the management and the proprietor; the board of directors works properly so as to ensure a fair business practice for the interests of every shareholder; and professionals like accountants, auditors and directors work independently for the company's interests.

Actually, the concept of corporate governance is getting wide recognition in Hong Kong. The government, regulating organisations and public organisations set the minimum requirements for listed companies. For the past 10 years, the Force and many professional groups have been working for a better environment for the practice of corporate governance.

In view of this, companies are strongly advised to comply with the Listing Rules and other regulations specifically governing listed companies. CCB has been preventing and detecting fraud, technology crimes and counterfeiting of monetary instruments.

Measures are not limited to strict compliance with guidelines, legislation and regulations related to agencies. Awareness of corporate ethics and enhancing corporate practices are the keys to good corporate governance from a crime prevention perspective. Therefore, the Police are calling on all corporations to step up measures.

In a bid to promote the concept of corporate governance, CCB has been promoting corporate governance in different fields like the legal field and banking field, involving professionals. A focus group formed in 2002 is promoting corporate governance and executing the related functions, analysing related data and making strategic arrangements. Recently, CCB had worked with a local TV company to air an interview during which corporate governance was explained from a police perspective. In the near future, CCB and Police Public Relations Branch will jointly produce a series of short dramas in Police Report to familiarise viewers with the concept through typical case studies.

One of the sharing sessions on corporate governance