Business | General
Study shows fraudulent activities cost GCC at least Dh1.5b
An estimated amount of over Dh1.5 billion has allegedly been lost to fraud by companies across the GCC in the last year with the phenomenon reaching alarming levels and continuing to rise, KPMG said yesterday as it released its 2008 Fraud Survey.
- By Natasha Marrian, Staff Reporter
- Published: 18:35 October 22, 2008
Dubai: An estimated amount of over Dh1.5 billion has allegedly been lost to fraud by companies across the GCC in the last year with the phenomenon reaching alarming levels and continuing to rise, KPMG said on Wednesday as it released its 2008 Fraud Survey.
The startling estimate was based on recent largely publicized cases of fraud, which have emerged in the region ranging from alleged swindling by investors at Al Boom Holding, alleged embezzlement at Etisalat, the Abu Dhabi investment scam to banking fraud. The figure is an estimate based only on amounts that were reported.
The value of other cases such as alleged financial irregularities by a Tamweel employee and alleged bribery at Nakheel were unknown.
The survey of around 1,000 companies across the GCC found that fraud had increased by 43 per cent compared to the audit firm's 2004 report, which recorded a 37 per cent increase.
Participants were also rather pessimistic about whether the levels of fraud would decline with only 16 per cent saying it would and 59 per cent believing it would increase even further in the next two years.
"So one of the things we asked was, 'is fraud a major problem?' and the answer, as compared to our 2004 survey, is yes," said Colin Lobo, partner and head of forensics at KPMG presenting the report on Wednesday.
Around 67 per cent of the companies responding to the survey felt that fraud was prevalent in both the public and private sectors and 42 per cent admitted to having a problem with fraud, with the larger organizations being more prone to it. Seventy one per cent of the cases of fraud occurred in companies with over 1000 employees.
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