Police allege that Si had discovered several incidents of illegal activity performed by Truong and reported him to government officials. After Si made his reports, Truong allegedly hired Luan to harass Si in an attempt to have the former deputy withdraw his reports. After Si refused, Luan allegedly hired the five other men and attacked and killed Si.

Two police officers who allegedly gave information to the journalists are also going on trial for “deliberately revealing state secrets,” according to an AP report on the story.

The Economist has a good description of the corruption that the reporters uncovered, saying the “case was a scandal at the transport ministry in 2006 in which newspapers revealed how officials had gambled around $750,000 of public money on the outcomes of football matches. In the clean-up that followed, the head of a road-building department at the ministry was jailed, along with seven others.”

In a related story, The China Post reports that seven journalists had their press cards taken away in retaliation for covering the corruption story.

Media watchdog groups rightly argue for the release of the two journalists, arguing that jail time will discourage other would-be whistle-blowers and investigative journalists from reporting on government crimes.

The trial could last two days according to a court official, and the charge of “abusing freedom and democracy” has a maximum sentence of seven years in jail.

Dong allegedly tipped off his younger brother, Dong Dewei, and a former classmate, Zhao Shuya, about the acquisition, and both allegedly profited from the deal. According to Xinhua News Agency, they raked in 50 million yuan ($7.3 million) and 1 million yuan ($146,000) respectively, after buying Yan Bian Road stock before the deal was finalized and publicized. Although the three defendants have reportedly already confessed to the crimes, they denied their confessions in court, claiming they were extracted through intimidation and inducement by Chinese police.

The Anti-Corruption Commission was reinstated last January and “made independent and given strong powers in an effort to clean up the country’s graft-tainted reputation,” according to the story.

The report also points out that Bangladesh is annually rated as one of the most corrupt countries in the world by Transparency International. While the discovery of the bribery is laudable, it’s also a testament to that ranking.

According to the website Deutsche Welle, Germany and the United States top TI’s list as leading the fight against corruption. One expert told the site that those two countries are “at the forefront in applying an OECD [Organization for Economic Cooperation and Development] anti-corruption convention.”

The website also noted Germany’s pursuit of Siemens as proof of the country’s proactive anti-corruption habits. You can read more about the Siemens’ case here.

And, on the other end of the spectrum, the article reminds readers who may be surprised to see the UK on the bottom of the list that the BAE debacle is still raging on…

A Thai Member of Parliament (MP) and a newspaper critic face millions of dollars in damages and significant prison time after being sued for libel by Tesco, the UK's largest retailer, according to a story by the Guardian Newspaper. Both were sued for saying that Tesco, known as Tesco Lotus in Thailand, is expanding too aggressively in their country at the risk of "mom-and-pop" businesses and for accusing the company of using loopholes to avoid paying Thai taxes. Both the MP and newspaper critic say Tesco sued them as a bullying tactic to silence debate.

The story notes that if the newspaper critic loses the case and receives the maximum punishment he will go bankrupt. However, despite the massive damage claims, Thai courts have never awarded over £33,000 (approximately $65,000) for damages in libel cases.

Tesco responded in a statement:

"Tesco is of course not trying to intimidate Mr Kamol or Mr Jit, but we do have a right to defend our company and our colleagues against false allegations. We took this action reluctantly but felt we had no choice after a sustained campaign of misinformation spread by the two individuals over many months.

Tesco does not have a history of acting through the courts and will only do so under extreme provocation. In fact until 2008 we had never taken any libel action at all. It would therefore be irresponsible and misleading to suggest that Tesco had a policy of attempting to suppress criticism."

Well, Thailand isn't the only place where Tesco is suing someone for speaking out against the company; it's also filed libel charges in its own backyard. The company recently filed libel charges in the UK against the Guardian newspaper for reporting on similar tax avoidance. According to the Guardian:

Tesco said the Guardian knowingly misled its readers in a series of articles and a podcast. The retailer said the Guardian had wrongly alleged that Tesco had contrived a tax avoidance structure involving a series of joint venture partnerships held largely offshore to avoid paying up to £1bn of UK corporation tax on sales of its UK properties. Tesco also said the Guardian had wrongly accused the retailer of having already avoided corporation tax on £500m of profits from two property deals using that structure.

The Guardian, like the Thai dissenters, argued that Tesco's lawsuit was nothing more than an attempt to bully people from speaking out against the company. The newspaper continued:

"This looks like a deliberate tactic by Britain's largest retailer to shut down perfectly legitimate inquiries into their methods of tax avoidance. At the same time that two Tesco directors are reported to have lobbied the government in private on matters of taxation, the company is now seeking to chill public debate on the same issues"

The Guardian article also states that Tesco's new U.S. operations, Fresh and Easy, has come under fire by political activists, though the company says it has no plans to file libel charges in the U.S.

The six firms involved were Aardwolf Pestkare; Alliance Pest Management; Elite Pest Management; Killem Pest (wins the award for the best name of the bunch); PestBusters and Rentokil Initial Singapore. The fines ranged from SGD$4,000 to SGD$96,400 (which comes out to approximately US$3,000 – $65,000) based on the level of cooperation with the commission, according to the CCS. A spokesperson for Rentokil Initial, which received the steepest fine, said his company had cooperated fully with the inquiry.

The Competition Commission of Singapore was established in 2005, but this was the first resolved case of bid-rigging in its history. The CCS devoted six investigators and one year’s time to the case, which began in 2006. The firms were given six weeks to digest the findings, but none challenged the case in the end.

Juthamas was running for a seat in parliament before all this was discovered, but withdrew from the race yesterday. She denies knowing anything about the bribes and says she only stepped down to save her political party from any associated fallout. She says if the U.S. Department of Justice finds her guilty of accepting the bribes, she will counter-sue, as she calls it “a case of mudslinging and a groundless accusation.”

Mr. Green, who produced “Rescue Dawn,” was arrested in the Los Angeles International Airport after arriving home on a flight from Thailand. He posted $500,000 bond and was released. His wife was arrested in Los Angeles as well, though it’s not immediately clear if she was arrested with her husband at the airport as well. She posted a $200,000 bond.

According to the Centre for the Protection of National Infrastructure, “The contents of [Evans'] letter highlight the following: the Director-General’s concerns about the possible damage to UK business resulting from electronic attack sponsored by Chinese state organisations, and the fact that the attacks are designed to defeat best-practice IT security systems.”

The People’s Liberation Army (PLA) has allegedly been supporting computer hackers for some time now, and it’s thought that they have already used limited cyber-warfare as a response to recent public U.S. missteps – such as the bombing of the Beijing Embassy in Belgrade in 1999 and after a U.S. spy plane collided with a Chinese fighter in 2001.

Although Beijing denies any connection to the recent attacks, China is undeniably building up what Time Magazine appropriately labels a “cybermilitia” (see the linked story above). One example is a recent cash contest sponsored by the PLA to recruit the most talented local hackers across the country.

The letter from Evans shows the growing concern that western nations have over electronic security threats but, according to Graham Cluley, senior technology consultant for Sophos, it is “unusual for a country to so openly accuse another of engaging in this activity – especially when it can be extraordinarily difficult to prove an attack is being sponsored by a government or is a lone hacker acting independently.”

According to one report, LDK’s stock dropped by a quarter immediately after the accusations became public. Morgan Stanley, the company that underwrote LDK’s IPO, sent out something of a press release to inquiring minds:

“The CFO also thought that [the whistleblower, Charlie Situ] might have incorrectly classified scrap silicon as unusable raw material, whereas in fact scrap silicon accounts for more than 80 percent of the raw material needs at LDK.”

Since the announcement, LDK Solar has been downgraded by more than one financial firm.

The article in question, titled “The Family Firm”, alleged that Suharto and his family amassed a $73 billion fortune “from oil and mining, forestry, property, banking and petrochemicals, but lost much of it during the 1997 Asian financial crisis.” The article alleged that the family still had $15 billion in assets as of 1999.

The former dictator took power through a 1965 military coup that resulted in as many as half a million people dead. During his 31-year reign he regularly killed or imprisoned political dissenters.

A spokesman for Time says the magazine stands by its article.

Read more about the story here.

Government officials have said that the new rules will not differentiate between foreign or domestic companies.  However, China has not yet released the specific wording of the law.

State-run monopolies will still be legal among specific industries such as military-related manufacturing, petroleum and civil aviation. The American Chamber of Commerce in Beijing, consulted in drafting the legislation, praised the new law.

Read the article as posted in Forbes.

The company is still awaiting accredation of its suppliers’ Indonesian operations from an independent assessment body.

Woolworths sources some of its products from Asia Pulp and Paper (APP), the world’s largest pulp producer. Last year it was discovered by Indonesia’s Centre for International Forestry Research that APP relies on deforestation in Sumatra for 60 to 70 percent of its wood supply. An audit of the company in 2005 revealed a significant lack of environmental protection or conservation, and a follow-up in 2006 failed to detect any implementation of the required changes.

Commentary: This is very disturbing and we unfortunately suspect that it is far from unique. This sort of behavior undermines consumer confidence in the overall “ethical-consuming” trend. Since it is impossible to police all companies’ claims (apart from spot scrutiny by the government or analyses performed by NGOs), the market has to accept their assertions at their face value. Will a more rigorous independent auditing and verification process or regulatory body emerge? If shenanigans like this continue, the answer will certainly become “yes.”

The posting claimed Zheng, China’s food and drug commissioner from 1998 to 2005, allowed pharmaceutical companies to bypass the drug approval process. One company is accused of killing at least ten people through faulty antibiotics.

Zheng was sentenced to death in May for taking bribes from companies in exchange for easing governmental standards.

Commentary: Zheng’s punishment is noted as unusually harsh even by Chinese standards. Although Zhang was ultimately imprisoned for ten months, his release and compensation is a step toward a more ethically minded Chinese government.

The game went live last week on July 25th and it has already been downloaded over 100,000 times, with hundreds of players engaging online simultaneously.

Why so popular? Because the hero of the game is an “honest and upright official” whose mission is to weed out corrupt officials (along with their mistresses).

Weeding out, however, does not mean “putting in jail.” It means by torture and slaughter. Whenever the player kills a corrupt official, he or she gains “experience points.” As points add up, the player increases powers in “Combating Corruption,” “Moral Character,” and a rating of being “Corruption Free.”

The highest level of the game is the “Honest and Corruption-Free Paradise.” Reportedly, that level is full of singing birds, fragrant flowers, and representations of a “peaceful and prosperous nation.”

Commentary: To increase the game’s appeal nod to China’s long history, the designers of the game used 165 characters from history – both good and bad. For example, Hai Rui and Lord Bao represent strong and honest leaders, while corrupt and evil players are represented by such individuals as the angry enuch Zhao Gao and Heshen.

While we like the historical element of the game, we are a bit perplexed as to how all of the women in China seem to walk around in communist red bikinis. How things must have changed since our last visit! Anyhow, if you can speak Chinese (or if you can’t and simply want to see more pictures), you can visit the NanFang Daily newspaper website for more about the game.

On another interesting note, as some game users have pointed out, the graphics are heavily “borrowed” from another game, “Romance of the Three Kingdoms,” offered by a for-profit software company. Not surprisingly, this might leave some wondering if the fact that the government itself made this game means that they don’t have to respect copyrights?

The worldwide recall affects 967,000 Nickelodeon and Sesame Street toys, including such popular items the Big Bird, Elmo, Dora and Diego characters.

In an interview with the Associated Press on Wednesday, David Allmark, general manager of Fisher-Price, said the problem was detected by an internal investigation and self-reported to the consumer product safety commission (CPSC).

Under current U.S. regulations, children’s products found to have more than .06 percent lead accessible to users are subject to a recall.

Commentary: Understandably, Fisher-Price spun the positives hard to this: an internal probe discovered the contamination and they were able to ‘quarantine’ two-thirds of the toys before they reached store shelves, and that the company would use the recall as an opportunity to put even better monitoring systems in place.

Schetty, concerned that Rohm and Haas would steal Technic’s bid with Intel, convinced unnamed Technic and Amkor employees to sabotage Rohm and Haas’ test at an Amkor facility in the Philippines. Schetty is looking at a possible maximum sentence of 10 years in prison, 3 years probation and a $250,000 fine. He agreed to pay $15,536 in restitution to Rohm and Haas.

Read the full article.

Commentary: Talk about going to extremes to stop the competition. Schetty actually convinced Technic employees that it was ‘good business’ to destroy a rival’s product. Another example of how one employee can ruin an entire company (even their own).

Police confirmed the deaths which were caused when at least twenty billboards collapsed as heavy winds pounded different parts of the city…

Another massive-size billboard on Korangi Road fell on a rickshaw, injuring three persons. Eyewitnesses said that the billboard didn’t fall down right under its location but due to the high pressure of wind, it fell about 30 ft far away from where it was actually fixed…

The City District Government Karachi (CDGK) had banned oversized billboards for a year but allowed them following intense pressure from advertisers…

At the same time, citizens have expressed extreme annoyance with the city’s statement that has asked the citizens to stay in their homes. “I am sure no where in the world citizens have had experienced what we did today,” said one, adding that the citizens of this mega city feel threatened from the ‘mega’ hoardings that have covered the whole city like monsters who can kill anyone, anywhere, and anytime.

Commentary: Now that’s reporting (cover the whole city like monsters who can kill anyone, anywhere and anytime)! Hey Hollywood… see anything interesting here as a movie plot?

Sometimes we are just plain happy for simple things… like not living in Kararchi. Life is complex enough without having to worry about attacking billboards. On a serious note, the pressure from advertisers is real as the Pakistani economy has been on fire over the past few years (growing at nearly 10% annually) – in part due to the ‘global war on terror.’

ABB said the probe is uncovering payments of concern made in Asia, South America, and Europe (with a particular focus on Italy).

The company disclosed that it was investigating several cases of suspect payments and it was unclear whether they were linked. ABB said it had not made any provisions and it was not sure how much money could be involved.

Commentary: Gee… this must be an isolated incident (with payments of concern found only in ASIA, SOUTH AMERICA, AND EUROPE). We checked their website and they do not have operations in Antarctica, which could account for that continent’s exclusion. Our opinion is that this is pretty lame as ABB has had multiple scandals in recent years (such as a secret executive pay scandal in 2004 and a financial fraud scandal back in 2000). There really is no excuse at this point for not having a robust compliance program in place that could prevent the most basic of illegal business practices: bribery.

The Shanghai First Intermediate People’s Court ruled that Fu-mart illegally sold sneakers bearing logos identical to the Puma logo. The court ruled that the supermarket failed to identify the infringement, and thereby should be held responsible. It also ordered the supermarket to issue a public apology and pay 100,000 yuan ($13,100) in damages.

Commentary:It’s not a huge fine (it definitely won’t pay for a planeload of lawyers to work on the case), but the fact that the court agreed to order that the market issue a public apology is quite significant (the apology had been one of Puma’s demands in the lawsuit last December). Check out the logo posted above. One might think it is pretty hard to ‘mistakenly infringe’ on such a detailed logo. The Chinese courts agreed.

Sensitive data stolen from Ferrari included engineering documents, test data, and other undisclosed documents. This material was allegedly used to develop Toyota autos in 2002 and 2003.

Commentary: Toyota has been quite lucky that this story has gained ZERO traction in the U.S. media (its largest market). A story linking them to stealing corporate secrets from Western competitors, while crushing these same competitors in the market, would have major consumer backlash potential. Why has it been ignored by the U.S. media? It’s simply we’re all NASCAR fans over here – not Formula One. However, Toyota is entering NASCAR as well…with a Toyota Camry?

This new online tool, called BRIBEline, is backed by many leading organizations and companies such as Wal-Mart, International Paper, the World Bank, UPS, Tyco International, and Rolls-Royce.

BRIBEline (the acronym stands for the “Business Registry for International Bribery and Extortion”) is essentially an online survey that is available in 14 languages. While no names are required or collected, the survey asks participants to respond to ten multiple-choice questions. All information is kept anonymous so that reports cannot be used for legal investigations or prosecutions.

Ultimately, the information gathered through BRIBEline will be collected and publicly reported by TRACE in hopes of highlighting where the worst offenders reside in terms of country, ministry, or sector. This in turn will help companies target their compliance and anti-corruption efforts.

Commentary: We think that this is a fabulous tool that reflects the excellent leadership in anti-corruption demonstrated by TRACE’s leader, Alexandra Wrage. There has been a real dearth of information about where bribes are occurring, with companies limited to examining only their own experience and DOJ prosecution and investigation records.

We strongly encourage companies to get involved with BRIBEline and look forward to some of the interesting trends and information that come as a result.

According to the International Herald Tribune (read an interesting background piece about this story here), Mr. Zheng had talked tough during his tenure…

“The crimes of making and selling fake drugs haven’t been uprooted,” he said in a speech in 2001. “And criminals and corrupt officials in the system should be severely punished according to the law.”

But in reality, according to a confession he wrote while in prison this March, through a series of dealings he was actively soliciting bribes. Under one arrangement, he set up his wife and son into a consulting business that firms would have to contract with in order to gain government approvals.

Going forward, to try and cut down on fraud the Chinese government has announced that it will begin carrying out surprise inspections on the more than 4,700 drug manufacturers in China, as well as increasingly rotate officials in key posts to prevent them from becoming too close to companies.

Commentary: Well, there are plenty of executives here in the U.S. who are thanking their lucky stars that updated Federal Sentencing Guidelines don’t include ‘execution’ for fraud, graft and general incompetence.

The executives were originally convicted on conspiracy and fraud charges during a December 2006 trial.

In U.S. District Court for the District of New Hampshire, Judge Paul Barbadoro sentenced former Enterasys CFO Robert J. Gagalis to 11 1/2 years in prison. Bruce D. Kay, another former Enterasys finance executive, was sentenced to 9 1/2 years in prison. The prior week, former Enterasys accountant Robert G. Barber was sentenced to just over 8 years in prison.

Gagalis reportedly tried to stand up and read a statement, but broke into tears. His attorney ended up reading it for him, in which he apologized for his actions and especially regretted the “sorrow, pain and anxiety his actions caused to his three children and his wife.”

In levying the sentences, Judge Barbadoro said: “These kinds of crimes endanger our markets. It is vitally important to me that we do everything we can to protect the integrity of our markets.”

The case dates back to May 2004 when the executives were indicted over allegations that they had artificially inflated revenues between March 2000 and December 2001 as Entrasys became an independent spin-off from the computer computer networking company, Cabletron.

The defendants had backdated and falsified documents and concealed terms of business transactions from Enterasys’ auditors, including creating false revenue by secretly investing company funds in other companies and having those companies to use the investment proceeds to buy Enterasys products.

According to DOJ, the loss to public investors due to these shenanigans was $97 million.

Read more about the case and its background here.

Commentary: WOW… We are against fraud just as much as the next guy, but even us were stunned by the length of these sentences. And more fun in “The Barber’s” courtroom is yet to come – with the former CEO of Entrasys and several others still awaiting sentencing.

While FTS said it will replace as many of the tires as it can, it will be forced to declare bankruptcy after only replacing approximately 10% of the tires impacted.

Background story: Last week, the NHTSA ordered FTS to recall the light truck/SUV radials produced by China-based Hangzhou Zhongce Rubber Co. Apparently, the tires were either missing gun strip or it was deemed insufficient. The failure by the manufacturer to place these adhesive strips between the tire belts caused the tires to degrade and eventually separate, resulting in fatal crashes. Some of the brand names under which the tires have been sold include Compass, Telluride, Westlake and YKS.

Tires which have been marketed as designed to last 40,000 miles are actually coming apart after only 25,000 miles. Some tests allegedly have found that the Zhongce tires also had dangerously thin inner liners, permitting air to leak and damage the outer walls of the tires.

Commentary: It gets worse. The lawyer behind the recall (he sued FTS, who then notified NHTSA, who then ordered the recall) say that there may be five other similar distributors of these tires… and that there are up to five million on the road. Read about in the Philadelphia Inquirer.

Memo to procurement: when they said buy “exploding Chinese fireworks for the holiday” they did not mean for you to confuse “fire” with “tire.”