Asset stripping in a mature market economy

Purpose - The purpose of this paper is to document a Danish fraud scheme, in which a large number of limited companies were stripped of their assets leaving them with nothing but tax debt, eventually causing the Danish Tax and Customs Administration to lose large sums. Furthermore, the purpose is to analyse why the asset‐stripping schemes occurred in a mature market economy with a strong corporate governance system and a low level of corruption. Design/methodology/approach - The research is conducted as a longitudinal single case study based on documentary research. Findings - The Danish case indicates that asset stripping may take place in mature market economies to the extent that perpetrators are able to circumvent the corporate governance system by giving lawyers, public accountants and banks incentives to act less critically towards dubious business transactions. Research limitations/implications - The opportunity and rationalisations supporting the fraud are particular to the Danish context. Practical implications - The paper provides insights into the consequences of professionals disregarding their duty to serve the public interest. Social implications - The paper provides an example on how to circumvent the social supervisory system of a mature market economy. Originality/value - The paper contributes to the knowledge about asset stripping by documenting and analysing the phenomenon in a mature market economy context.