Jocelyn Chi is a managing director based in Kroll’s Hong Kong office. She has extensive experience in various forensic, restructuring, insolvency, dispute resolution and investigation assignments throughout Asia including compulsory and voluntary liquidations, IFA, reporting accountant, schemes of arrangement, capital and debt restructurings of private and large publicly listed groups. Jocelyn has facilitated investigation assignments for entities in various industries in Hong Kong, PRC, Singapore and internationally.

What attracted you to a career in forensic investigations and asset recovery?

I graduated in corporate finance and accounting and joined the field of corporate insolvency, investigations and restructuring as a fresh graduate. I was amongst the founding members of Borrelli Walsh, an erstwhile specialist restructuring, corporate recovery, insolvency and forensic accounting firm, which was acquired by Kroll in late 2020. What attracted me towards investigations and asset recovery is that it was often time consuming, challenging but very rewarding especially when frauds happen in the context of a corporate collapse. It is also fulfilling to work with stakeholders who could have high exposure in a total loss situation, where we come in and recoup value for them. I feel that working in the investigations field can give you a sense of purpose as you are instrumental in upholding the integrity of the finance and accounting industry.

What did you find most challenging about entering investigations and forensic practice?

Fraudsters are getting smarter over time. Fraud schemes can tend to be very similar and very dissimilar at the same time. It can therefore be challenging to identify red flags based on past experiences and to be open minded for new fraud patterns.

Nowadays, with digitisation, electronic records provide assistance on investigations but it could also be hard because you are unsure of the exhaustiveness of the documents. Metadata in digital documents can show when somebody made changes to a document, who made the changes and what the actual change was. It can reveal the origin and history of the document and entire digital DNA which helps in chronicling the events of the fraud during the case.

For newcomers, two traits that they have to develop to be successful in this profession is patience and precision to come up with eye-catching observations.

What was the most interesting investigation you have facilitated and why?

I would say the collapse of a Hong Kong listed company. This was one of the biggest Chinese scrap companies, which was ordered into liquidation by Hong Kong’s High Court upon the application by the Securities and Futures Commission in 2013. The founders and management used multiple special purpose vehicle companies incorporated worldwide, forged shipping documents and round robin transactions leading to overstatements of the group’s financial statements and a fraud on a massive industrial scale.

It is very interesting because this case involved a fraud of an industrial scale where the fraudsters planned and executed a scheme across several jurisdictions. The fraudsters prepared comprehensive paperwork trying to conceal the fraud. We had to dig into the books and records of the company, interview employees, working with the other enforcement authorities in order to verify and confirm the fraud and to recover dissipated assets and secure potential claims against the fraudsters.

How is asset tracing changing?

There is more and more reliance on offshore entities, which makes it harder for an investigator to identify the ultimate beneficiaries or owner or the key management to trace assets and funds flow. In such cases, it also becomes difficult to secure a third party disclosure order or seek a court order to assist on discoveries.

What recent trends have you noticed in the investigations field, and how have they impacted your work?

The most noticeable trend is the rise of crypto assets / investments. There is an increasing number of client engagements which have a crypto currency element involved in them. With crypto thefts, hacks and scams, we holistically investigate the technical and non-technical clues, leveraging off tracing where the funds went and identifying responsible parties.

In what ways could the work of investigations and forensic experts be impacted by the creation of global accounting standards? What barriers exist to such standards, and can they be overcome?

Having a standardised set of global accounting standards will assist users to understand the financial positions and make judicious comparisons. A standardised global accounting standard would help bring synergy and uniformity to carry on investigations in a more efficient manner.

To what extent has covid-19 had an impact on asset and fund tracing investigations?

Personally, I don’t think covid-19 has had much of an impact on asset and fund tracing investigations.

What advice do you have for practitioners about to undertake their first expert testimony?

Study the case and supporting documents very closely. One needs to be very sure of the accuracy of the underlying documentation that forms the basis of the opinions being given.