SECTION KK - FRAUD
This section deals with fraud by owners/directors of corporate debtors. It may be 'hard' fraud (for example, transfer of assets of the corporate debtor, illegal transfer of money) or "soft' fraud (for example, false accounting).

(a) Are there instances of fraud in relation to a corporate debtor in this economy?
Yes.
 

(b) If so, is it usual that instances of such fraud will be revealed when a corporate debtor is in financial difficulty or becomes insolvent?
Yes.
 

(c) What is the attitude that is normally taken to such fraud in this economy?
Once revealed,it is xonxeived as a serious crime.
 

(d) Is it the case, for example, that 'soft' fraud may be overlooked (or not pursued) and 'hard' fraud may more likely be pursued in this economy?
In the past, some type of soft fraud such as accounting not strictly following generally accepted accounting principles was tend to be overlooked. Since financial crisis has occurred, the governmental and public conception on soft fraud has become strict.
 

If there have been instances of fraud:

(i) does the insolvency law (or other civil law) provide for possible recovery of the proceeds of (or damage caused by) the fraud;

Yes.

 

(ii) does the criminal law provide for possible sanctions;

Yes.

 

(iii) how effective is the application of these laws in practice?

Reasonably effective.
 

(e) Would it be common or usual that instances of fraud would:

(i) be largely ignored;

No.

 

(ii) settled by negotiation; or

In some cases, yes.

 

(iii) pursued through either civil or criminal law sanctions?

Usually, yes.