Related party fraudAt the heart of almost every fraud are related party transactions, whether disclosed or not. Unfortunately, Bloomberg does not collate related party transactions, which is not surprising given often opaque and confusing disclosure. We have attempted to collate these for ASEAN and Hong Kong for companies with a market capitalisation exceeding US$1bn. For more details please refer to Family Games in Hong Kong and Singapore (23 Feb 2016) and Family Games in ASEAN (10 Aug 2016).
It is still possible to work out which companies are trading with disclosed related parties by studying balances on the balance sheet. Most companies which trade with related parties will have loans or amounts outstanding. As such, we highlight companies with these balances and with disclosed affiliates. However, related party balances are not necessarily indicative of the size of related party transactions. As such, investors should investigate further by checking the financial statements for connected and related party transactions.