Fraudsters disguised as white knights are preying on companies in financial trouble, warns Grant Thornton.
The firm's Recovery & Reorganisation department has noted an increasing trend for fraudsters to buy controlling stakes in companies, then strip them of their most valuable assets or run up a mountain of credit, then disappear with a tidy profit.
"The scam, which is growing in popularity, is a fraudsters' dream, as it rarely gets adequately pursued", says Nick Wood, a Recovery & Reorganisation partner at Grant Thornton.
"Once a company is stripped bare of its assets there are no assets remaining to allow an insolvency practitioner to investigate and pursue the fraudsters. In essence, creditors are usually reluctant to fund insolvency practitioners in an investigation to avoid throwing goo...