Due Diligence

Client Requiring Due Diligence On Potential New Russian Partner
case study

— How Blackhawk Intelligence conducted due diligence on a client's Russian Partner

Synopsis

Blackhawk received instructions (via email) from a European company requiring a due diligence report on its potential partners in Russia (legal and criminal concerns, political connections, financial standing, business reputation, etc.). Blackhawk was asked to include the following in our report:

A clear and concise executive summary identifying the main findings and conclusions drawn.
A clear report on the standing of the mother company as well as information as to its possible sole owner.
Should there be any other owners – individuals then to proceed with due diligence reports on them.

Scope of Investigation

The executive summary of the report provided a succinct break-down and insights into the mother company and its owners (legal and criminal concerns, political connections, financial standing, business reputation, etc.) and the level of risk attached to the mother company and its related parties.

Outcome

Our findings and all research data gathered during our investigations were detailed and presented in the finished report.

We were able to clearly present why the company should exercise caution in its dealings with the Russian company.

Challenges Presented

Protectionism

An EU report revealed a “staggering increase” in protectionist measures as governments seek to shield national industries from foreign competition amid a difficult economic environment. So, it is very difficult to get information on companies and the beneficial owners.

Local knowledge

We had to use our local knowledge to know what local information was available and how to get it.

Corruption

Corruption significantly impedes businesses investigations in Russia. High-level and petty corruption is common, especially in the judicial system and public procurement. The business environment suffers from inconsistent application of laws and a lack of transparency and accountability in the public administration.

Language and format

The information we collect comes from overseas and local sources and there are considerable challenges to merge and cross-check this information and to incorporate it into one report.