Substantiating rumours of fraudulent activity

The situation

An international metal manufacturer was under significant pressure from investors and analysts over a surge in Chinese exports which threatened to significantly affect earnings. The client had heard rumours that its main Chinese competitor was engaging in various types of fraud, which were enabling it to compete so aggressively. Responding to concerns from the board, the company engaged Control Risks to help them address this situation with the goal of reasserting and strengthening its position in the market place.
 

Control Risks' approach

We formulated and executed a strategy aimed at positively changing the behaviour of our client’s competitor. Extensive research on three continents enabled Control Risks experts to demonstrate that the competitor was indeed engaging in a range of activities including circumventing US antidumping duties and violating Chinese regulations and securities laws. We then worked in close partnership with the client’s executive committee, conferring on a near daily basis, to deliver the strategy.
 

The outcome

We successfully executed a strategy to change the behaviour of the competitor, its investors and other stakeholders, as well as the Chinese sector more broadly. Our success in demonstrating the illegal activity of our client’s competitor led to a suspension of trading on a major stock exchange. Our client was set firmly on a path towards regaining its market position.