Hong Kong’s status as an international financial centre should never be taken for granted. It depends, as much as anything, on a reputation for upholding probity, vigilance and strict regulatory controls. That is where Colum Bancroft comes in.
As managing director of AlixPartners, he is at the forefront of efforts to identify and prevent corporate fraud and ensure clients operate in compliance with correct governance procedures and relevant laws.
It is a multifaceted role requiring a combination of research skills, practical experience, intuition, persistence, and an ability to ask the right questions and not accept the first answer. And since most cases these days have a significant technology component, a better than basic knowledge of systems and software is also essential to track possible wrongdoing and compile the evidence.
“It is certainly not routine work; no two jobs are ever the same,” says Bancroft of leading the firm’s financial advisory practice within the region. “By their nature, fraud schemes are not easy to find or unravel, and at the beginning of an investigation, often very little is known. There may be a huge range of possible avenues you can look down. But everything’s got to be done in a logical way, and you must be able to justify the methodology adopted so that, if necessary, it can stand up to scrutiny in court.”
A new case might start with a call from a client, a law firm, the regulator, or a whistleblower with apparent cause for suspicion. Initially, they may just want help in determining if there is an issue and whether to take things further. Alternatively, the first step might be a request to do a proactive review in line with good corporate governance practices, which then turns up unexpected surprises. Or, for the most serious matters, the firm can work under instruction from legal counsel or an audit committee, unearthing and reporting the facts for others to decide how best to proceed.
Once an investigation is under way, Bancroft’s team will look to obtain information from computers, documents, emails, smartphones and mobile devices, accounting ledgers and other business records. In particular, they examine how specific transactions have been done and reported, reviewing procurement data, products bought from certain vendors, and patterns for different types of transaction. In this respect, some data analytics tools can be incredibly powerful, but the results must be combined with human insights.
“It could take weeks or months depending on the severity of the case,” Bancroft says. “We speak to relevant people within the organisation to gather and present the evidence on who is involved, how long it’s been going on, and how to put in place better controls and compliance procedures. The findings may point to problems with certain individuals or irregularities with certain vendors, which then need to be resolved.”
He notes that the firm attracts recruits from diverse backgrounds including law, business, academia, the disciplined services and the media. What unites them is the ability to think both logically and laterally, work effectively in teams, and quickly come to terms with different client challenges.
Bancroft’s own professional training was as a chartered accountant, an area he chose in part because it offered the prospect of international assignments.
As the fourth of seven siblings, he grew up just south of Manchester, where his father was a local government lawyer and his mother a primary school teacher. Once dreams of a career in professional sport began to fade, he knuckled down instead to complete a three-year BA in economics at Leeds University in 1989, and then did his fair share of routine audit work while training with a mid-sized accounting firm back in Manchester.
When, though, the chance came for an overseas transfer – to Guernsey in the Channel Islands – he jumped at it. And, fortunately, the couple of years there, on secondment to the trust department of NM Rothschild & Sons, did indeed open doors to a much wider world.
“I wasn’t passionate about accounting, but my career shows that it gives a great foundation and I’m very glad I did it,” he says.
Looking for experience further afield, he arrived in Hong Kong in early 1994 without a job, but soon found a spot with Baker Tilly where, over the next seven years – including a six-month sabbatical in 1998 to study Putonghua in Beijing – he advanced to partner and handled IPOs, due diligence and major business valuations.
“It was a very broad range of experience and a great way of getting to know Hong Kong and China.”
However, keen for a change of direction, he decided to set up his own trading business with some partners in 2001. From a base in South China, it sold decorative mouldings to casinos in Macau and, later, moved into manufacturing, providing an education in everything from production and delivery schedules to cash flow and quality control.
“I always enjoyed a challenge, and that was certainly a big one,” Bancroft says. “I experienced a few headaches along the way and learned why expressions like ‘buyer beware’ and ‘trust but verify’ have entered the English language. Going through tough times is difficult, but it breeds resilience.”
Those lessons, though, were put to good use after he sold up in 2007 to go into consultancy, first with a boutique restructuring firm in Hong Kong and then at Kroll Associates to establish an Asia-Pacific financial investigations practice. And since joining AlixPartners in January this year, the brief has been to help clients understand the risks associated with growth, tackle instances of fraud and corruption, put in preventive measures, and assist with post-merger integration and commercial disputes.
“A key goal is to develop a positive working environment,” Bancroft says. “You need to understand the strengths, passions, aspirations and abilities of team members, so everyone pulls in the right direction. Nobody is best at everything, but everyone has the potential to be best at something.”
(Photo: Chungy Wong)
