Summary
 
A medium-sized multinational industrial company’s Shanghai subsidiary operated for years with minimal headquarters oversight. Local management orchestrated a system of financial and supply chain irregularities involving misallocated costs, hidden revenues, and related-party distribution. PSU investigated, removed the responsible parties, and stopped multi-million yuan losses. The subsidiary has since become a top performer within the group.
 

 
The Problem
 
Reliant on local leadership, the parent company lost visibility into its China operations. Costs were booked in one entity while revenues sat in another, distorting the financial reality. Related parties were quietly embedded in the supply chain. Headquarters had no insight into the local IT environment. Internal collusion obscured the irregularities from headquarters.
 
Our Action
 
Maintaining the element of surprise was critical to prevent evidence tampering.
 

• Coordinated Entry: Deployed alongside legal and forensic specialists to secure the site and prevent data loss.

• Digital Forensics: Worked with our long-standing partner TEKID, a leader in cybersecurity and digital forensics, to secure and extract digital data such as emails and documents from key personnel, which we then analysed to map the fraud.

• Evidence Mapping: Traced financial flows and identified undisclosed related-party networks.

• Interim Management: Provided interim leadership and HR support following the removals to stabilise operations.

 
The Outcome
 
The investigation led to the immediate removal of the senior managers and their enablers. Stopping the scheme saved millions annually and allowed for a complete restructuring. This case shows that decisive action can convert systemic risk into long-term growth — the subsidiary is now a leader in the group’s portfolio.