Due Diligence - Why Intelligence?
Regulator, shareholder and public scrutiny is greater than ever. The failure of businesses to undertake adequate business intelligence activities (due diligence) when entering into any deal or contract, represents a major commercial risk and could lead to irreparable reputational damage, should the deal or contract encounter any significant adverse issues.
Due diligence is used to investigate and evaluate a business opportunity. This opportunity may be in the form of a merger or acquisition; the appointment of a channel partner; or the creation of a joint-venture vehicle to capture an opportunity in an emerging market.
The need to undertake comprehensive business intelligence is especially the case in jurisdictions where there is a lack of familiarity, and where there is a need for organisations to know who they are really dealing with. Some lesser developed countries have unsophisticated corporate registers where records are incomplete or inaccurately filed, and where some business practices are viewed as unacceptable to the more developed nations and/or fall foul of corruption or bribery legislation, such as:
The Foreign Corrupt Practices Act (FCPA),
The UK Bribery Act
The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
However corruption and opaque company structures, (where the ownership is obscured by offshore registered, or proxy, shareholders and the key executives are hidden through front directors or puppet leaders), are not restricted to less developed nations. These issues, among a host of others, are the reasons why our clients come to RISQ to establish the backgrounds of companies and their key executives
RISQ – Our approach
Our Business Intelligence team is vastly experienced. RISQ is able to combine its knowledge of the Asia Pacific region (specifically the issues and threats to foreign businesses)with innovative enquiries, extensive research and tested methodologies to provide clients with accurate intelligence in order to bring a greater level of confidence to them in completing a deal or to minimise any exposure to hidden liabilities.
RISQ has achieved its edge in business intelligence through partnering with its clients to thoroughly understand their issues and identify their key objectives. Our Business Intelligence team conducts preliminary research and provides an assessment of the risks facing clients prior to embarking on the project in question – whether it be an acquisition, appointment of a channel partner, or awarding a contract to a supplier. This initial “value add” allows our clients to understand cultures, geographies and business environments of which they previously may have had less knowledge and therefore can focus their intelligence gathering in the necessary areas, rather than in a prescriptive, predetermined, or off-the-shelf, process.
RISQ relies on its network of contacts and associates to obtain relevant and timely information, as well as the resourcefulness of its consultants and their investigation techniques. Typically, the following enquiries, as set out below, are conducted into the background of the company and/or individuals concerned:
• Establish whether the company or individual is properly registered and licensed, as well as regulated by the relevant authorities
• The reputation of the company and/or individuals in the industry, as well as the local and international community
• Identify the original source of wealth for the company or individuals
• Identify red flags that may be of concern such as litigation, criminal history, corruption, fraud, conflict of interest or other issues that could be detrimental to the client
• Identify whether the company and/or individuals are, or have any connections to, politically exposed persons or are linked to organised crime
• Global blacklist checks and local registers of disqualification or disbarment
