Due diligence can be required at any point in the business lifecycle – before an investment is made such as in merger and acquisition, or even after a transaction is completed. The underlining motivation for doing due diligence is to protect one’s interests and avoid committing a tort or offence. Let’s take a look at some due diligence related news to see what experience we can draw upon.
- The motivation behind Sotherby’s purchase of the research and forensic company Orion Analytical a few months ago is pure and simple: do due diligence and combat art fraud. The latest alleged art fraud involved a painting of an unknown man by supposedly Frans Hals worth US$10m, which the auction house sold the painting to a collector in 2011. But five years later, post transaction due diligence and forensic work was carried to determine its authenticity and Orion Analytical concluded it was a forgery. Following this discovery, Sotherby’s immediately revoked the sale and reimbursed the buyer, and is now taking the the consigned art dealer Mark Weiss to court. This case shows that post transaction due diligence designed to uncover fraud and identify steps to recover from the situation is critical.
- Rupert Murdoch’s 21st Century Fox already owns a 39.14% controlling stake in Sky Plc; but now Rupert Murdoch wants to buy the remaining 61% stake and take full control of the broadcasting, media streaming, broadband and telephone services provider. This has sparked MPs and the media watchdog to urge Ofcom to investigate. The due diligence in this case centre around potential media plurality, and if the Murdoch family is “fit and proper” to uphold required editorial standards following the phone-hacking scandals in the UK and the US.
- Co-operative Bank is now up for sale, after reporting its fifth consecutive year of losses and warned of more branch closures and job losses. Any potential buyers will face a substantial due diligence process, potentially even looking into the tie-up between Co-operative Bank and Britannia Building Society many years ago.
At Blackhawk, our due diligence team is constantly involved in cases which may or may not be in the news. Working with law firms and corporations, we perform corporate investigation, carry out public and non-public data research, run compliance checks, provide detailed due diligence reports, among other due diligence work. Visit our due diligence page to find out why we believe that due diligence is a corporate way of life and how it can help to reduce your business risk and exposure.
Contact Blackhawk today to discuss how our due diligence team can value add to your business operations.