Sanctions and Investigations

Preparing for and Managing Corporate Investigations, Volume 1 Issue 9, June 2022*

1. Eugene Thuraisingam LLP is well-known for its dispute resolution practice, specialising in corporate investigations amongst other practice areas. Can you please elucidate for us what an internal investigation of a corporation entails from a legal perspective?

Each investigation will differ slightly depending on the matter being investigated and the purpose of the investigation. Nevertheless, there are two general principles that should anchor and guide the conduct of all internal investigations. First, in terms of process, a good internal investigation must be unimpeachable and conducted with the highest ethical and legal standards. Second, in terms of outcome, it should produce relevant and reliable evidence of the matters under investigation.

We advise investigators to begin with the end in mind. What is the purpose of the investigation? Has there been an express allegation of misconduct by one or more employees that must be verified and dealt with? Or has there been a corporate breach that must be accounted for both internally and to the regulators, with any lapses identified and remedied quickly? The purpose will very often inform the process.

However, the ends will not always justify the means. Internal investigators must remember that they are not law enforcement and must be careful to act within their legal powers. For example, requests to tap a subject employee’s private electronic devices or detain an employee for questioning must be considered carefully in light of the governing laws of the applicable jurisdiction. This will ensure that the fruits of the investigation will, if necessary, pass muster in a court of law or other tribunal.

Lastly, one specific and frequently encountered area of legal risk exposure is in the documents generated in the course of investigations and whether they may be privileged from disclosure in civil, regulatory, or penal proceedings. This is another consideration to keep in mind when planning the structure of the investigation process and the parties involved.

2. What are some key considerations that an in-house lawyer and business should keep in mind in the event that wrongdoing of any kind is suspected within the corporation? What steps should be taken to safeguard business interests and permit a thorough and sound investigation?

Some key considerations for any business facing the prospect of conducting an internal investigation are anticipating and minimising business and legal risks, identifying and remedying operational weaknesses, removing employees who have misconducted themselves and limiting the repercussions of their misconduct, recovering any misappropriated company assets and protecting existing assets, protecting the company’s public image and reputation, and preparing for civil and/or criminal litigation involving the company. As the saying goes, never waste a good crisis, so see each investigation as an opportunity to improve and strengthen the business.

Perhaps the most important step to safeguard business interests is to ensure that the entire investigation remains confidential from start to finish. In internal investigations, a lack of confidentiality could result in additional reputational damage to the company as rumours of misconduct spread to third parties, or could thwart the objective of the investigations as subjects try to evade detection and/or destroy important evidence. Loose lips sink ships, so keep the disclosure of and involvement in the investigations process on a strict need-to-know basis.

3. In a globalised world, a company is often confronted with a barrage of regulation — national, regional, and international. How can a company best manage this, both before an issue occurs and once the need for an investigation becomes apparent?

The key to effective cross-border investigations is having the right company officers and, if necessary, the right external experts in the right places ready to go at a moment’s notice.

When planning ahead, it is important that the company’s internal investigations team be established properly and be ‘fit for purpose’. Depending on, for example, the size of the company, the location of its markets, and any specifically anticipated legal and/or business risks, a well-constituted investigations team could vary from a single experienced officer sitting in headquarters or a multi-disciplinary team of in-house counsel, senior executives, representatives from IT, HR and/or communications, as well as external legal and forensic experts on retainer. While it might be tempting to keep the entire conduct of investigations in-house, examine your business needs early and frankly, and determine if the company would benefit from retaining the counsel of external legal experts in the applicable jurisdictions. Having experts on the ground who are familiar with local laws and the local law enforcement or regulatory authorities will help your company navigate the relevant regulatory landscape quickly and efficiently where time is of the essence.

Once the need for an investigation becomes apparent, revisit your plan and identify key features such as the who, what, and where of the investigations. Then make the necessary adjustments to this process based on the investigation’s scope and purpose. This will help your company focus immediately on the applicable laws of the relevant jurisdictions, and identify and implement any refinements to the investigation’s structure as required by the applicable local laws.

4. Eugene Thuraisingam LLP also represents individuals accused of fraud and bribery. Could you please tell us a bit more about the work you do in this area?

Given the profile and sensitivity of our briefs in this respect, we are unable to discuss many of these details.

However, we are able to say that our experience in acting for individuals accused of commercial crimes gives us the unique advantage of having the perspective of both the ‘offence’ and ‘defence’. Given the different legal and evidentiary burdens, these roles demand very different skill-sets and strategic approaches, and our clients have benefitted from our experience on both sides. For example, our work as defence counsel has trained our ability to identify and exploit the evidentiary gaps in a prosecuting agency’s case. In turn, this informs our advice to companies about the evidence-gathering strategy in investigations. We are also very familiar with the law enforcement, prosecutorial, and regulatory authorities and processes in Singapore.

5. In what ways has the field of corporate investigations changed (or perhaps stayed the same) and what changes do you see on the horizon?

In our view, corporate investigations has always been and will continue to be primarily about uncovering and preserving quality evidence. The new, ever-quickening age of digitisation has resulted in more evidence than ever before about nearly every aspect of a company’s operations. It is crucial that companies stay ahead of this curve with a modern investigations plan that includes a comprehensive strategy for collecting, analysing, and managing digital evidence.

Lastly, and more fundamentally, we view an effective corporate investigations process as an integral part of a company’s overall crisis management plan. When adverse events occur, companies must act quickly to mitigate their detrimental consequences, manage legal and regulatory exposure, and strengthen stakeholders’ trust. In this regard, the need to conduct investigations with the highest ethical and legal standards is unlikely to change.

*“Preparing for and Managing Corporate Investigations” was the featured article in the Volume 1 Issue 9, June 2022 edition of the In-House Community Magazine authored by Eugene Thuraisingam.