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Smarter criminals pose new legal risk

In-house lawyers' role has expanded beyond contracts to protecting firms and bosses from corruption and cybersecurity threats

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Jeffrey Teh, founder and managing director of professional development company InnoXcell, is organising a training programme for legal professionals in Hong Kong next Thursday. Photo: Sam Tsang

The Taiwan "gutter oil" scandal is a good example of the difficulties faced by companies and their lawyers in keeping ahead of criminals, risk-management experts say.

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It also highlights new challenges facing in-house counsel whose traditional role has expanded from handling contracts and internal legal matters, into corruption, cybersecurity and regulatory compliance.

"Criminals are always ahead of us," said Jeffrey Teh, founder and managing director of professional development company InnoXcell, which is organising a training programme for legal professionals in Hong Kong next Thursday.

"In business nowadays, general counsel are not just looking at contracts and dealing with legal issues. They become business persons within an international company."

He said most businesspeople were not legally trained and would not consider legal implications and their consequences. This could easily expose the business to corrupt business partners, or suppliers with bad business ethics.

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Citing the "gutter oil" scandal, in which companies unwittingly included oil unfit for consumption into edible oil products, he said if a company failed to detect the background of a supplier from which it purchased oil it could be exposed to the risk of being sued.

Brent Carlson, director of global business advisory firm AlixPartners, said corruption was one of the main concerns facing multinational firms, especially those doing business in China.

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