TOMMY SEAH on Whistle Blowing

Whistleblower Hotline –

A Powerful Tool to

Combat Fraud

SOPAC® 2007, 25-28 March 2007 , Melbourne

Code of Corporate Governance

The Audit Committee should review arrangements by which staff of the company may, in confidence, raise

concerns about possible improprieties in matters of financial reporting and other

matters.

Para 11.7 Singapore Code of Corporate Governance 2005 Para 11.7 Singapore Code of Corporate Governance 2005

Code of Corporate Governance

The Audit Committee’s objective should be to ensure that arrangements are in place for independent investigation on

such matters and for appropriate follow up action.

Para 11.7 Singapore Code of Corporate Governance 2005 Para 11.7 Singapore Code of Corporate Governance 2005

Whistleblowers are told to take comfort in knowing they have done the right thing.

SOX • SEC. 806. PROTECTION FOR EMPLOYEES OF PUBLICLY

TRADED COMPANIES WHO PROVIDE EVIDENCE OF FRAUD.

• (a) IN GENERAL.—Chapter 73 of title 18, United States Code,• is amended by inserting after section 1514 the following:• ‘‘§ 1514A. Civil action to protect against retaliation in fraud• Cases

• ‘‘(a) WHISTLEBLOWER PROTECTION FOR EMPLOYEES OF PUBLICLY TRADED COMPANIES.—No company with a class of securities registered under section 12 of the Securities Exchange Act of 1934(15 U.S.C. 78l), or that is required to file reports under section15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(d)),……………………………….

Divided views

regarding

Whistleblowing

““Whistleblowing: Whistleblowing: betrayalbetrayal or or public dutypublic duty?”?”

““For those who argue that For those who argue that employees employees owe strict loyalty to the companyowe strict loyalty to the company, ,

Whistleblowing seems to be an act of Whistleblowing seems to be an act of extreme disloyalty.extreme disloyalty.

But loyalty But loyalty cannot imply that we should cannot imply that we should not report the unethical conducts of not report the unethical conducts of

othersothers……” ……”

Conflict of Laws: Whistle-blowing Hotlines

Under Fire in Europe

…….a French court issued an order prohibiting

McDonald’s in France from continuing with their

system on data protection grounds.

(Sarbanes Oxley and European data protection laws)

Some board members against whistle blowing:

: a “whistleblower” mechanism is : a “whistleblower” mechanism is already in place in the company.already in place in the company.

: weaken the esprit de corps amongst : weaken the esprit de corps amongst the staff.the staff.

Dilemmas of whistleblowersDilemmas of whistleblowers

WhistleblowingWhistleblowing

Implementation issuesImplementation issues

What should be in the What should be in the

Whistle Blowing PolicyWhistle Blowing Policy



Commitment Commitment

of of

Board of DirectorsBoard of Directors



Purpose of the PolicyPurpose of the Policy



What safeguards can people What safeguards can people expect?expect?



Reporting ProceduresReporting ProceduresWhistle Blowing Whistle Blowing

Hotline Hotline

or or

ManagementManagement



How an investigation How an investigation

is carried outis carried out



OutcomeOutcomeReport to explain findings and actions taken to the full Report to explain findings and actions taken to the full

extend possible within commercial, legal and extend possible within commercial, legal and confidential constraints.confidential constraints.

Is Whistle Blowing Is Whistle Blowing

Hotline effective ?Hotline effective ?

A plea for Whistleblowing A plea for Whistleblowing legislationlegislation

The reason why….The reason why….A plea for A plea for Whistleblowing legislationWhistleblowing legislation

US $82 billion FRAUD

Bribery EmbezzlementUS$30 million

Thank you Thank you Ladies and Gentlemen Ladies and Gentlemen

for the privilege.for the privilege.Please feel very welcome to call me atPlease feel very welcome to call me at

Tel. 65 9106 9872 Tel. 65 9106 9872 to know more.to know more.

You may also visitYou may also visithttp://www.cfe-in-practice.com

Visit us at http://www.cfe-in-practice.com

CFE-In-Practice Integrity|Intelligence|Independence

http://www.cfe-in-practice.com/

http://www.cfe-in-practice.com/

Economy & Finance

TOMMY SEAH on Whistle Blowing