KRC chart, page-2268

Some of the purpose of the "please explain" notice is not to just to query for answers but also to get the management to say on record, "we have no idea", or whatever the response is. If any contrary evidence comes to light (like an email from a whistleblower showing the CEO knew about something when he claimed he had no idea) then these official claims can be used to prosecute or penalise.

So part of the intention is to put the management under pressure legally to make sure they're not breaking the rules. Same as how you sign a Statutory Declaration. "I hereby affirm blah blah". Doesn't mean a damn since you can affirm anything you like but NOW you've opened yourself up for additional charges if you've chosen to lie.

The existence of this process adds an extra sweat factor to anyone thinking of pulling a fast one. It's like lying to a cop when you get pulled over.