Economic crime on the rise, says survey

Incidents of economic crime in Hong Kong have increased by 4% to 26% since 2005, according to PricewaterhouseCoopers¡¦ (PwC) 2007 Global Economic Crime Survey: Hong Kong, which was released October 16 2007. The survey was based on the responses of executives of 100 companies selected at random from a wide variety of industries in Hong Kong.

The average direct financial losses to Hong Kong respondents were US$618,000, says PwC. Respondents reported spending on average an additional US$60,000 on managing these cases, which includes legal costs, investigation costs and stakeholder management. Sixty percent of those that experienced economic crime stated they had suffered collateral damage or significant collateral damage to their businesses above and beyond the monetary losses.

The survey also looked at the experiences of Hong Kong and other global companies in emerging markets including China. Of the Hong Kong respondents that had responsibility for business activities in China, 29% reported they were victims of economic crime in those businesses in the past two years, while 11% consider it likely or very likely they will be subjected to economic crime over the next two years in China. Both figures are higher than the Hong Kong domestic results.