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CORPORATIONS, GOVERNANCE, AND CRIME
INTERNATIONAL ROUNDTABLE

This hybrid international roundtable (in-person and online) was focused on corporate governance failures and irresponsible business practices. It was organized by our Editor-in-Chief, Dr. Costantino Grasso - Associate Professor in Law at Manchester Law School, in cooperation with the Manchester Metropolitan University, and was included in the teaching activities of the Master of Laws course in Corporate Governance and Business Ethics at Manchester Law School. It was held on the 17th of November 2022.

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The event was driven by the ambition of casting light on some of the most burning issues affecting the corporate world through a series of brief but highly topical case studies. In particular, a series of terrific guests focused on eight select corporate scandals, which covered issues spanning several countries and different industrial sectors including the food, leisure, extractive, and financial industry. The event also focused on a recent UK judicial decision that represents a matter of concern in the area of whistleblowing and corporate compliance and audit systems.

OPENING SESSION

The Opening Session included the following presentations:
•    
Welcome: Prof. Mark James, Professor of Sports Law and Director of Research, Manchester Law School
•    
Introduction: Dr. Costantino Grasso, Associate Professor of Business and Law, Manchester Law School 
•    
Corporate Crime Observatory: Dr. Donato Vozza, Lecturer in Law, University of Roehampton London
•    
Violation Tracker: Philip Mattera, Corporate Research Project of Good Jobs First

Suggested Citation

BLUEBOOK: [Speaker's Firstname Surname]International Roundtable: Corporations, Governance, and Crime. CORPORATE CRIME OBSERVATORY, at [00:00] (Nov. 17, 2022), www.corporatecrime.co.uk/corporations-governance-and-crime

APA: [Speaker's Surname, Firstname] (2022, Nov. 17). International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Retrieved from www.corporatecrime.co.uk/corporations-governance-and-crime

HARVARD: [Speaker's Surname, Firstname] (2022) International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Available at: www.corporatecrime.co.uk/corporations-governance-and-crime

OSCOLA: [Speaker's Firstname Surname] ‘International Roundtable: Corporations, Governance, and Crime’, (Corporate Crime Observatory, 17 November 2022), video recording
at [00:00] <www.corporatecrime.co.uk/corporations-governance-and-crime>

CASE STUDY 1

This case study, which was prepared by Dr. Yasmine Motarjemi, Whistleblower and former Head of Food Safety at Nestlé, is entitled: "The story of a food safety scandal in a European multinational food company."

In the case study, Dr. Motarjemi explains how, although in theory a set of three lines of defense should work in the food industry, multiple failures may cause accidents. She then analyses a series of corporate governance and safety standards failures that were experienced at Nestlé with a special focus on the pizza Buitoni contamination that occurred in 2022.   

Additional sources:   

  • Joe Whitworth, "French officials confirm some E. coli cases linked to Nestlé pizza," Food Safety News, March 31, 2022 (hyperlink).

  • Katy Askew, "From Nestlé’s Buitoni to Ferrero’s Kinder: High-profile scandals put European food safety in the spotlight," FOOD navigator.com, Apr. 26, 2022 (hyperlink).

  • Bill Marler, "Publisher’s Platform: Frozen pizzas from the Nestlé Buitoni brand Fraîch’Up likely have sickened several hundred," Food Safety News, May 4, 2022 (hyperlink).

  • Angelique Chrisafis, "I want Nestlé to explain’: families fight for answers in Buitoni E coli scandal," The Guardian, Oct. 27, 2022 (hyperlink).

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Suggested Citation

BLUEBOOK: Yasmine Motarjemi, ‘The story of a food safety scandal in a European multinational food company’, International Roundtable: Corporations, Governance, and Crime,  CORPORATE CRIME OBSERVATORY, at [00:00] (Nov. 17, 2022), www.corporatecrime.co.uk/corporations-governance-and-crime

APA: Motarjemi, Y. (2022, Nov. 17). ‘The story of a food safety scandal in a European multinational food company’. International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Retrieved from www.corporatecrime.co.uk/corporations-governance-and-crime

HARVARD: Motarjemi, Y. (2022) ‘The story of a food safety scandal in a European multinational food company’, International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Available at: www.corporatecrime.co.uk/corporations-governance-and-crime

OSCOLA: Yasmine Motarjemi, The story of a food safety scandal in a European multinational food company
’, International Roundtable: Corporations, Governance, and Crime, (Corporate Crime Observatory, 17 November 2022), video recording at [00:00] <www.corporatecrime.co.uk/corporations-governance-and-crime>

This case study, which was prepared by Dr. John Ho, Senior Lecturer at Manchester Metropolitan University, is entitled: "Performance-based remunerations as a corporate governance problem: The case of Thomas Cook."

In the case study, Dr. Ho showed that the company used dubious accounting methods to make its profits appear larger to justify the payment of its directors' bonuses. He argued that it is important to regulate executive compensation more stringently by including clawback rules for directors' remuneration in case of misconduct.  

Additional sources:   

  • Kalyeena Makortoff and Rob Davies, "Former Thomas Cook bosses under fire for excessive pay," The Guardian, Sept. 23, 2019 (hyperlink).

  • Alice Hancock and Daniel Thomas, "Bitter blame game over who is responsible for Thomas Cook collapse", The Financial Times, Sept. 23, 2019 (hyperlink)

  • "Former CEOs appear before Business Committee Thomas Cook inquiry," UK Parliament, Apr. 26, 2022 (hyperlink).

  • "Executive rewards: paying for success," House of Commons - Business, Energy and Industrial Strategy Committee, 2018 (hyperlink).

  • "Thomas Cook inquiry - Government dragging its feet on corporate reforms", House of Commons - Business, Energy and Industrial Strategy Committee, Nov. 4, 2019 (hyperlink).

  • "Thomas Cook pay and bonuses: Remuneration,"UK Parliament, Nov. 4, 2019 (hyperlink).

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Suggested Citation

BLUEBOOK: John Ho, ‘Performance-based remunerations as a corporate governance problem: The case of Thomas Cook’, International Roundtable: Corporations, Governance, and Crime,  CORPORATE CRIME OBSERVATORY, at [00:00] (Nov. 17, 2022), www.corporatecrime.co.uk/corporations-governance-and-crime

APA: Ho, J. (2022, Nov. 17). ‘Performance-based remunerations as a corporate governance problem: The case of Thomas Cook’. International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Retrieved from www.corporatecrime.co.uk/corporations-governance-and-crime

HARVARD: Ho, J. (2022) ‘Performance-based remunerations as a corporate governance problem: The case of Thomas Cook’, International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Available at: www.corporatecrime.co.uk/corporations-governance-and-crime

OSCOLA: John Ho, Performance-based remunerations as a corporate governance problem: The case of Thomas Cook’, International Roundtable: Corporations, Governance, and Crime, (Corporate Crime Observatory, 17 November 2022), video recording at [00:00] <www.corporatecrime.co.uk/corporations-governance-and-crime>

CASE STUDY 3

This case study, which was prepared by Charles Middleton, International Tax Lawyer and Whistleblower - Formerly at Walmart and General Electric, is entitled: "General Electric, the Enron train wreck in slow-motion."

In the case study, looking at the scandal that involved General Electric, Charles Middleton explained that too often crime does pay in the corporate world covering several crucial elements in the area of corporate misconduct such as the employees' unswerving loyalty and complacency, the bewildering complexity of the accounting procedures, the role of professional enablers, and the issues of asymmetry and suppression of information.

Special Investigative Report:   

  • Harry Markopolos "General Electric, A Bigger Fraud Than Enron," 2019 (download).

Additional sources:   

  • "General Electric accused of fraud 'bigger than Enron' by Madoff whistleblower," CBS News, Aug. 16, 2019 (hyperlink).

  • Dominic Rushe "General Electric shares tank following accusation of 'bigger fraud than Enron'," The Guardian, Aug. 15, 2019 (hyperlink).

  • Ben Winck "The bombshell report accusing GE of 'Enronesque' fraud is just the latest in the company's long history of accounting controversies," Market Insiders, Aug. 16, 2019 (hyperlink).

  • Matt Egan, "GE misled investors before its stock imploded, SEC says", CNN Business, Dec. 10, 2020 (hyperlink).

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This case study, which was prepared by Victoria Gronwald, Ph.D. Candidate at the London School of Economics, is entitled: "Shell companies, mining concessions, and corruption: the case of ENRC in DR Congo."

In the case study, Victoria Gronwald focused on the extremely controversial mining operations carried out in the Democratic Republic of the Congo by the London-listed mining company Eurasian Natural Resources Company (ENRC). The case explores the potential conflict of interest and corruption issues and the fact that the company has been subject to a corruption-focused investigation by the Serious Fraud Office in London.  

Additional sources:   

  • Simon Goodley and Mark Hollingsworth, "ENRC chairman quits amid internal inquiry into corruption allegations," The Guardian, April 23, 2013 (hyperlink).

  • Juliette Garside, "ENRC investigated for bribery in Africa and Kazakhstan," The Guardian, April 28, 2013 (hyperlink).

  • "DR Congo Residents Come Forward as Potential Victims in SFO Corruption Investigation into ENRC," RAID, January 28, 2020 (hyperlink).

  • Kate Beioley, "SFO largely cleared of wrongdoing after UK court battle with ENRC," The Financial Times, May 16, 2022 (hyperlink).

  • Josef Skrdlik, "DR Congo: State Mining Company Subject to a Damning Audit," OCCRP, June 16, 2022 (hyperlink).

  • Ben Quinn, "Bid by Kazakh mining company to sue journalist is dismissed by judge," The Guardian, March 2, 2022 (hyperlink).

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ENRC vs Tom Burgis 
[2022] EWHC 487 (QB)

Suggested Citation

BLUEBOOK: Victoria Gronwald, ‘Shell companies, mining concessions, and corruption: the case of ENRC in DR Congo’, International Roundtable: Corporations, Governance, and Crime,  CORPORATE CRIME OBSERVATORY, at [00:00] (Nov. 17, 2022), www.corporatecrime.co.uk/corporations-governance-and-crime

APA: Gronwald, V.. (2022, Nov. 17). ‘Shell companies, mining concessions, and corruption: the case of ENRC in DR Congo’. International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Retrieved from www.corporatecrime.co.uk/corporations-governance-and-crime

HARVARD: Gronwald, V. (2022) ‘Shell companies, mining concessions, and corruption: the case of ENRC in DR Congo’, International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Available at: www.corporatecrime.co.uk/corporations-governance-and-crime

OSCOLA: Victoria Gronwald, Shell companies, mining concessions, and corruption: the case of ENRC in DR Congo’, International Roundtable: Corporations, Governance, and Crime, (Corporate Crime Observatory, 17 November 2022), video recording at [00:00] <www.corporatecrime.co.uk/corporations-governance-and-crime>

This case study, which was prepared by Dr. Dawn Carpenter, Business Ethicist and the Director of the Solidarity Economy Workshop at Georgetown University, is entitled: "Wirecard: short selling as a tool for ethical markets."

IIn the case study, dr. Dawn Carpenter focused on the key role played by short sellers in bringing to light one of the most relevant cases of financial fraud that occurred in recent years and strongly affected the German financial system: the Wirecard scandal. Wirecard was a financial service provider that collapsed after auditors refused to sign off its accounts due to a missing amount of €1.9 billion caused by fraudulent activities. Short selling, which is commonly considered a controversial trading practice consisting of making profits based on the deterioration in the company’s stock price, is discussed by Dr. Carpenter as a tool for ethical markets. 

Additional sources:   

  • Ben Taub, "How the Biggest Fraud in German History Unravelled," The New Yorker, February 27, 2023 (hyperlink).

  • Dan McCrum, "Wirecard: the timeline," The Financial Times, June 25, 2020 (hyperlink).

  • Paul J. Davies and Juliet Chung, "Short sellers made $2.6bn from Wirecard’s plunge, but not without scars,"Financial News London, June 22, 2020 (hyperlink).

  • Olaf Storbeck, "‘Cultural background’ of Wirecard short-sellers noted by German regulator," The Financial Times,  January 7, 2021 (hyperlink).

  • Jasper Jolly, "Covert cameras and alleged hacking: how bust payments company Wirecard ‘hired spies and lawyers to silence critics’," The Guardian, March 4, 2023 (hyperlink).

  • Hoje Jo, Annie Hsu, Rosamaria Llanos-Popolizio, and Jorge Vergara-Vega, “Corporate Governance and Financial Fraud of Wirecard," European Journal of Business and Management Research, 6(2), 2020 (hyperlink).

  • Katja Langenbucher, Christian Leuz, Jan Pieter Krahnen, Loriana Pelizzon, “What are the wider supervisory implications of the Wirecard case?,” SAFE White Paper, No. 74, 2020 (hyperlink).

  • Klaus C. Engelen, “Letter from Berlin. Germany’s Wirecard Scandal,” The International Economy, 2021 (hyperlink).

  • Fahmi Quadir, Letter to authorities, Safkhet Capital, March 15, 2019 (hyperlink).

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Suggested Citation

BLUEBOOK: Dawn Carpenter, ‘Wirecard: short selling as a tool for ethical markets’, International Roundtable: Corporations, Governance, and Crime,  CORPORATE CRIME OBSERVATORY, at [00:00] (Nov. 17, 2022), www.corporatecrime.co.uk/corporations-governance-and-crime

APA: Carpenter, D. (2022, Nov. 17). ‘Wirecard: short selling as a tool for ethical markets’. International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Retrieved from www.corporatecrime.co.uk/corporations-governance-and-crime

HARVARD: Carpenter, D. (2022) ‘Wirecard: short selling as a tool for ethical markets’, International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Available at: www.corporatecrime.co.uk/corporations-governance-and-crime

OSCOLA: Dawn Carpenter, ‘Wirecard: short selling as a tool for ethical markets’, International Roundtable: Corporations, Governance, and Crime, (Corporate Crime Observatory, 17 November 2022), video recording at​ 
[00:00] <www.corporatecrime.co.uk/corporations-governance-and-crime>

CASE STUDY 7

This case study, which was prepared by Stephen Holden, Doctoral Candidate at Manchester Law School, is entitled: "Reason shopping and the undermining of whistleblower protections." In the case study, Stephen Holden illustrates how the recent Court of Appeal case Kong (appellant) v Gulf International Bank (UK) Ltd established the troubling precedent that a whistleblower may be dismissed for their conduct without statutory relief in circumstances where allegations are unfounded and arise resultant of the disclosure.

Additional sources:   

  • Stephen Holden, "Troubling UK Judicial Decision Undermines Whistleblower Protection," Corporate Crime Observatory, August 24, 2022 (hyperlink).

  • Thomson Reuters Foundation and Blueprint for Free Speech (2016). Protecting Whistleblowers in the UK: A New Blueprint. London: Thomson Reuters Foundation (hyperlink).

Download the judicial decision:

Kong (appellant) v Gulf International Bank (UK) Ltd [2022] EWCA Civ 941 (hyperlink).

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The story of a food safety scandal in a European multinational food company (Yasmine Motarjemi)

CASE STUDY 2

Performance-based remunerations as a corporate governance problem: The case of Thomas Cook (John Ho)
Opening Session

Suggested Citation

BLUEBOOK: Charles Middleton, ‘General Electric, the Enron train wreck in slow-motion’, International Roundtable: Corporations, Governance, and Crime,  CORPORATE CRIME OBSERVATORY, at [00:00] (Nov. 17, 2022), www.corporatecrime.co.uk/corporations-governance-and-crime

APA: Middleton, C. (2022, Nov. 17). ‘General Electric, the Enron train wreck in slow-motion’. International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Retrieved from www.corporatecrime.co.uk/corporations-governance-and-crime

HARVARD: Middleton, C. (2022) ‘General Electric, the Enron train wreck in slow-motion’, International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Available at: www.corporatecrime.co.uk/corporations-governance-and-crime

OSCOLA: Charles Middleton, General Electric, the Enron train wreck in slow-motion’, International Roundtable: Corporations, Governance, and Crime, (Corporate Crime Observatory, 17 November 2022), video recording at [00:00] <www.corporatecrime.co.uk/corporations-governance-and-crime>

General Electric, the Enron train wreck in slow-motion (Charles Middleton)

CASE STUDY 4

Shell companies, mining concessions, and corruption: the case of ENRC in DR Congo (Victoria Gronwald)

CASE STUDY 5

Wirecard: short selling as a tool for ethical markets (Dawn Carpenter)

Suggested Citation

BLUEBOOK: Stephen Holden, ‘Reason shopping and the undermining of whistleblower protections’, International Roundtable: Corporations, Governance, and Crime,  CORPORATE CRIME OBSERVATORY, at [00:00] (Nov. 17, 2022), www.corporatecrime.co.uk/corporations-governance-and-crime

APA: Holden, S. (2022, Nov. 17). ‘Reason shopping and the undermining of whistleblower protections’. International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Retrieved from www.corporatecrime.co.uk/corporations-governance-and-crime

HARVARD: Holden, S. (2022) ‘Reason shopping and the undermining of whistleblower protections’, International Roundtable: Corporations, Governance, and Crime. Corporate Crime Observatory. Video recording at [00:00]. Available at: www.corporatecrime.co.uk/corporations-governance-and-crime

OSCOLA: Stephen Holden, ‘Reason shopping and the undermining of whistleblower protections’, International Roundtable: Corporations, Governance, and Crime, (Corporate Crime Observatory, 17 November 2022), video recording at​ [00:00] <www.corporatecrime.co.uk/corporations-governance-and-crime>

Reason shopping and the undermining of whistleblower protections (Stephen Holden)
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