The business practises of chip manufacturer AMD have been questioned after prosecutors ‘No Billed’ a major criminal case against Ngat Doan, the managing director of AMD’s former Australian distributor APD International, now trading as Daylite Technologies.
The case, which has cost millions to bring to court, centred on allegations that Doan had falsely claimed co-op dollars for advertising in IT publications. It was alleged by AMD that Doan had changed invoices from the amount invoiced by publishers to a higher amount and over a number of years claimed more than $2.4million in advertising co-op dollars, which AMD executives told police were not approved.
What is being questioned is how an alledged case of co-op dollar fraud was not detected by AMD for more than two years – a situation which Intel Australia claims should have been picked up by company audits. Other observers claim that as a US share-listed company, AMD has an obligation to audit claims made against the company on a regular basis.
Last month, the NSW DPP dramatically dropped the case against Doan, who had been charged with 47 criminal offences under section 176a of the crimes act relating to direct cheat and fraud. He was also charged with using a false instrument to obtain benefit.
During the investigation Doan told investigators that his defence was based on the fact that executives at AMD knew about the “changed invoices” at the centre of the case. AMD denies this allegation. However, key AMD witnesses are now not available to present evidence before an Australian court that could disprove Doan’s allegations, as several have since left the employment of AMD.
Among those to have left in Australia is John Robinson the former country manager for AMD Australia. AMD Australia marketing manager Caroline Francis told SmartOffice Reseller (SOR): “Almost everyone in the company is new. I was not with AMD when the alledged offences took place, neither was any of the current management. We now report to Singapore. In the past management reported to Tokyo.”
Ngat Doan told SOR that all he wants to do now is get on with his life and put the experience behind him. “My life has been hell for me and my family. All I want to do is move on and run my business”. A close friend of Doan, who is also the managing director of an IT distribution company, said: “AMD were very quick to make allegations. When I discussed the issue with Ngat he said that certain AMD executives knew of the co-op dollars claims. He has named these executives to the police and now they are not available to give evidence”.
One of the persons nominated by Doan as knowing of the alledged prior arrangement was AMD Singapore employee KS Chong who has also left the company. The NSW director of public prosecutions, Bruce Smith, was the person who made the decision to ‘No Bill’ the case. SOR has established that when Chong was approached by the NSW fraud squad to give evidence that would have refuted various claims made by Doan, Chong requested a business class airfare and five-star accommodation to come to Australia. SOR has established that when Chong was offered the facility to give evidence via a video link between Singapore, the now regional headquarters of AMD Asia Pacific including Australia, he refused.
Smith said there were various reasons as to why this case was dropped. “For one, we had to prove that the invoices at the centre of the case were not authorised by AMD,” he explained. AMD witnesses who allegedly approved the invoices have since left AMD and are not available. Other witnesses have also left AMD in Australia. Smith cited other issues relating to the case, including the possibility that Doan may have been charged under the wrong section of the Crimes Act.
Smith also told SOR that should witnesses become available, the DPP would have no hesitation in re-listing the case which a magistrate’s court, on the basis of the evidence, had committed for trial before a jury before the DPP ‘No Billed’ it last month.
Detective senior sergent Allen Miller, of the NSW fraud squad, claims the case should not have been dropped. Miller was responsible for collaborating evidence collected by AMD investigators and preparing the case for trial. “I still believe this case could go ahead without the overseas witnesses. Most senior managers have left AMD since the case was prepared,” he said.
The original evidence for the case was collected privately by AMD executives in Singapore and Australia and by solicitors from Sydney legal practise Baker McKenzie, in particular Baker McKenzie partner Paul Brown. They also called in former senior detectives to collate the evidence against Ngat Doan prior to handing the evidence over to NSW police.
When the allegations first surfaced three years ago Doan told me that he was “being set up” He alleged that AMD wanted to “get rid” of him as a distributor of AMD products in Australia. No evidence was ever produced to substantiate this claim. Instead of going to the police when AMD first discovered the alledged irregularities, AMD chose to collect evidence privately – right down to asking witnesses to verify documents and then sign evidence statements in preparation for a court case. AMD has refused to answer questions as to why they did not simply call in the New South Wales police when they discovered the irregularities in the invoicing tendered to AMD for advertising.
In 2003, solicitors from Baker McKenzie approached DWR Media, the then publishers of Computer Reseller News of which I was the CEO and editorial director. They put forward several invoices which they alleged APD International had invoiced to AMD. These invoices were false.
When SOR approached AMD after the case was ‘No Billed’ they first failed to return any calls. When we later approached Mike Howorth, the managing director of AMD’s Public Relations consultants at Ogilvy Public Relations Worldwide, he said he would advise his client of our interest in the story. He said he would come back to us.
He didn’t. Instead AMD sent a legal letter threatening SmartOffice Reseller. Via their solicitors Baker & McKenzie and Partner Paul Brown – the same solicitor who prepared the cased for AMD and who later found himself being sued by Doan for defamation – AMD bluntly threatened SOR publisher 4Square Media, warning that if we published the story outlined above AMD would consider the commencement of proceedings against “you and your company”. The letter went on in an intimidating fashion to say that AMD, if it became necessary, would tender the letter itself as evidence of the fact that SOR had proceeded to publish false and defamatory allegations despite AMD putting 4Square Media on notice that they were without foundation. In writing the letter, Brown said that publishing this story would “aggravate” harm to AMD.
Several days after talking to him, Bruce Smith of the DPP phoned SOR claiming he had never spoken to 4Square Media. He said: “I have received information that you are writing a story on Ngat Doan. As far as I am concerned I have not done any interviews with the media on this matter. I have a policy of not talking to the media.” When I pointed out that I had personally phoned him as a witness who had been summonsed to give evidence in the case he said: “As far as I am concerned I don’t recall speaking to you and I don’t want to be quoted.” Smith phoned me on a direct line which we believe was supplied by solicitors Baker McKenzie. What SOR has been able to establish is that Smith received a call from solicitors for AMD, Baker McKenzie. Baker McKenzie in turn received a call from AMD PR Company Ogilvy PR, who that same day had been advised that, despite the legal bullying they had turned to as a defence for AMD, we intended to run this story.
What AMD has refused to do is answer questions that go to the heart of the way the company ran its business in Australia in 2001 through to 2003. What we wanted to know was why the company did not pick up the alledged irregularities in the co-op dollar advertising prior to 2003.
We also wanted to know what type of business practices the company implemented in Australia and above all what type of audits they conducted with distributors who were empowered to claim co-op dollar advertising. SOR is also seeking comment as to why AMD resorted to employing a team of lawyers and investigators to collate evidence of the alledged fraud, when a simple call to the NSW fraud squad would have resulted in an investigation if the allegations had substance and could be substantiated before a NSW court.
In an interview with SOR, Intel’s managing director Phil Cronin, said: “I find it hard to believe that the alledged fraud went on for so long. It appears that there was a lack of good business practices. At Intel we audit extensively both co-op dollar expenditure and the flow of processors in and out of our distributors. This is expected of a US company in light of the recent Enron revelations.”
The fact that witnesses are not available is no fault of AMD as employees do have a right to leave a company. According to information obtained by SOR and confirmed by AMD Australia, the company has experienced massive staff turn-over in the Asia Pacific region, including Australia. The company has also re-located the regional head office from Tokyo to Singapore which has further complicated issues associated with this case.
Doan is currently considering his legal position now that evidence relating to his criminal charges has not been presented before a jury. It is believed that Doan will seek compensation from AMD and could well mount a damages claim. Court documents seen by 4Square Media list Doan’s home address as 97 Derby Street, Silverwater in NSW – an area which contains industrial complexes such as warehouses and from where it appears Doan is operating his re-named business Daylite Technologies. There is a sign at the entrance for a firm of accountants (reading H Ling & Co – Chartered Accountant; Registered Tax Agent). There is also a paper sheet stuck to the front door advising people seeking Daylite Technologies Pty Limited, trading as APD International ABN 91 102 535 606, to go to a side entrance. There are large signs at the top of the two-storey building’s front showing APD International, with APD being in the form of a logo. On the left of the front are two signs saying AMD Athlon Processing and AMD Duron Processor, the latter showing a website address of www.amd.com.
Calls to Daylite Technologies reveal the company is currently distributing product for several vendors including HP, Canon, Microsoft, Creative Pacific and D-Link.
See David Richards’ Comment in SmartHouse Reseller.