Welcome to the second Asian Crime Century briefing in 2023. The highlights in the past week have been high profile corruption cases in both China as well as India.
In China, corruption is clearly endemic and the sustained enforcement action by the authorities does not seem likely to stop this situation, due largely to the absence of an active civil society with groups and individuals publicising corruption. In India the opposite has been the case with a robust and active news media that revels in printing stories about official corruption, but which persists in society. India ranks 85 out of 180 countries in the Transparency International (TI) corruption perceptions index, whereas China ranks 66th in the same index. Based on the TI index, the two countries seem to have similar entrenched societal corruption.
TI raises concerns about the situation in India, commenting that “While the country’s score has remained stagnant over the past decade, some of the mechanisms that could help reign in corruption are weakening…Journalists and activists are particularly at risk and have been victims of attacks by the police, political militants, criminal gangs and corrupt local officials. Civil society organisations that speak up against the government have been targeted with security, defamation, sedition, hate speech and contempt-of-court charges, and with regulations on foreign funding.” TI notes that corruption in China has been subject to a strong executive led anti-corruption campaign, but that “new forms of corruption have started to emerge including collusion, where high-level officials use their powers to redistribute formerly state-owned assets to themselves and politically-connected firms.”
Corruption clearly remains problematic in both China and India, and should be a continued cause of attention for those doing business in both countries.
China
Endemic corruption in China continues to be well reported by state news media. Most interestingly, CCTV recently reported details of the Central Commission for Discipline Inspection (CCDI) case against Chinese-Canadian tycoon Xiao Jianhua, founder of the Tomorrow Group who was effectively abducted from the Four Seasons Hotel in Hong Kong in 2017 and emerged in Mainland China to stand trial in 2022 after which he was sentenced to 13 years imprisonment. The trial also resulted in a fine of 55 billion yuan on the Tomorrow Group, leading to the break-up of what was one of the largest financial investment firms in China. The documentary reports that the Tomorrow Group gave more than 40 million yuan (US$5.89 million) in bribes to local officials, including Zhang Xinqi, a former mayor of Weifang and Qingdao cities. Xiao Jianhua was one of the most wealthy people in China, but is suspected to have managed investments for senior Chinese Communist Party leaders and in doing so been exposed to action by the Party.
Gan Rongkun, former political and legal affairs chief of Henan province, was reported to have accepted bribes of over 166 million yuan (US$24.5 million) and used his influence to interfere in judicial cases, pleading guilty to criminal charges in court in Jiangsu Province last month. Gambling is often the downfall of Chinese officials, and Gan became obsessed with gambling online and in overseas casinos leading him to accumulate huge debts. He solicited bribes to pay debts which eventually reached tens of millions of yuan.
India
Corruption was in the news in India after the Central Bureau of Investigation (CBI) conducted raids on officials of the Food Corporation of India in connection with investigations into investigation into the “corrupt syndicate” of FCI officials, rice mill owners and grain merchants.
The CBI also raided and searched the premises of former finance secretary Arvind Mayaram in connection with alleged financial irregularities in the currency printing case when he was the secretary in the Department of Economic Affairs. The CBI suspects that Mayaram, De La Rue International Ltd, and officials of the finance ministry and the Reserve Bank of India conspired to grant a three years extension to an expired contract with the company for supplying exclusive colour shift security thread. De La Rue is a UK company, and if the corruption case is proven this will reflect badly on the internal controls and ethics of the company.
Indonesia
The punishment for crime in Aceh Province is administered by both men and women, with an All-Women Flogging Squad delivering caning to females under Sharia Islamic law. The punishment for a woman for meeting a man who is not her husband is 22 strokes of the cane on a woman’s back, administered publicly and reportedly attracting good audiences. The head of the Aceh Sharia police commented that the use of a female punishment squad is to tackle the problem of rising crime by women, but this conflates crime with religious morality.
Japan
Understanding crime in Japan requires peeling away layers of information to reach conclusions. The official narrative is that crime in Japan has decreased for 19 consecutive years. The Ministry of Justice reports that the number of recognized criminal offenses during 2021 decreased by 7.5% to 568,104, the lowest number since 1945. Thefts accounted for more than two-thirds of the total number of crimes, but murders decreased by 55 cases year on year to 874, robberies fell by 259 to 1,138, and arson decreased by 37 to 749. Governments and law enforcement agencies do tend to analyse and report crime statistics in a manner that reflects well on them.
At the same time, authorities are reportedly facing difficulties clamping down on the making of handmade guns, which came under the spotlight after the fatal shooting of former Prime Minister Shinzo Abe last year. Tetsuya Yamagami was indicated last week on charges including murder related to the shooting death of former Prime Minister Shinzo Abe. Yamagami learned how to make guns through YouTube videos and purchased electric cords, metal pipes, potassium nitrate (a key ingredient for gunpowder) and other materials in bulk. He rented a room separate from his residence and a garage for drying gunpowder, all undetected by anyone but also incurring substantial expenses.
Malaysia
The scourge of cyber-crime in Malaysia is apparent from the announcement by the Deputy Communications and Digital Minister that losses of almost RM600 million (US$138 million) were recorded in 2022. Victims are often enticed to fraudulent transactions via social media, which the Malaysian government aims to counter by a new “Stop for three seconds” education program.
The reliance of the police upon recording reports of crime to measure crime is apparent also in Malaysia as the Inspector-General of Police reported that the national crime index recorded a 4.1 per cent drop in 2022 compared with the year before, which he linked to police efforts to keep the national security situation at a good and controlled level and more arrests being made to combat and prevent drug activities. He reported a decrease in the number of commercial crime cases with 30,536 cases recorded in 2022 compared to 31,490 cases in 2021, which is surprising given the surge in online frauds in Malaysia and across the region.
Myanmar
The military government of Myanmar as a criminal organisation was shown when arms broker Tun Min Latt was arrested with three Thai nationals in raids in Bangkok was indicted recently on charges of drug trafficking, money laundering, and transnational organized crime. Tun Min Latt runs the Star Sapphire Group of companies, which reportedly brokered imports of Israeli reconnaissance drones and aircraft parts for the Myanmar Air Force, and is partnered with two Myanmar military-owned business conglomerates (Myanma Economic Holdings Ltd and Myanmar Economic Corporation) in numerous ventures. The U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) sanctioned both companies in 2021. Indicators continue to suggest that Myanmar is a failing state where organised crime is thriving.
The ’Golden Triangle’ is increasingly violent, with last week Thai army rangers killing six suspected drug smugglers in a firefight before dawn as the group of 15 to 20 men crossed the border from Myanmar. The Thai soldiers discovered 300 kilograms of ketamine and three guns in the bags of the dead. Last month, Thai soldiers killed another 15 alleged drug smugglers near the Myanmar border.
Pakistan
The relationship between poverty and victims of crime is apparent as a horrific case of organ trafficking has been exposed in Lahore. A 14-year-old boy told the police that a group had approached him and said that he would receive payment for his kidney, after which he was taken from Lahore to Rawalpindi for the procedure and was given a few thousand rupees. The commercial trade in human organs was made illegal in Pakistan in 2010, with a possible 10 years imprisonment upon conviction, but the business continues largely it seems for foreign clients – The 14 year old boy told police that an Arab man was on a stretcher next to him.
Singapore
The complexity of corruption in Asia was illustrated when the Corrupt Practices Investigation Bureau issued “stern warnings” last week to six former senior management staff of Keppel Offshore & Marine (O&M) who allegedly conspired together to pay bribes of around US$55 million to foreign consultants involved in Keppel O&M’s business interests in Brazil. The money was used to bribe officials of Brazilian state-owned company Petrobras, with the aim of securing rig-building contracts for Keppel O&M. Crimes that cross international boundaries can be complex and difficult to prosecute, but it is essential that those who offer or pay bribes are charged of criminal offences, as well as those who receive the bribes. Often anti-corruption agencies, especially in China when targeting corrupt government officials, will target the receiver of the bribe and use the person paying the bribe as a witness with immunity from prosecution. Both need to be subject to prosecution as a matter of policy and whenever possible to do so.
Singapore is also working hard to combat fraud, with the police detaining 228 men and 127 women in the first several weeks of January who are assisting in investigations for their suspected involvement as scammers or ‘money mules’. The suspects are believed to be involved in more than 918 cases of scams, comprising mainly investment scams, job scams, e-commerce scams, internet love scams, and Government Officials impersonation scams, where victims reportedly lost over $5 million (US$3.79 million). This is a customary police round up prior to Chinese New Year, also common to Hong Kong historically, when low level crime is believed to escalate as more people try to raise money to pay for their Chinese New Year celebrations.
Thailand
The expose of organised crime in Thailand continues as the investigation of Chaiyanat Kornchayanant, the suspected leader of a Chinese criminal syndicate, has raises concerns regarding the links between Thai politicians and officials with organised crime groups. The public awareness of the scale of the problem has grown following comments by Chuvit Kamolvisit, a former massage parlour operator and politician who has supplied information about how criminality operates in Thailand, notably the growth of Chinese criminal groups with corrupt connections to officials.