Finance Monthly - August 2022

36 Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s I always suggest that we sign a Non-Disclosure Agreement (NDA). Once the objectives and terms are agreed upon, I commence a desktop investigation where I will exploit online sources to gather information. I analyse what I find and subsequently provide a written report. It is for the client to then decide whether they wish to continue with the proposed business relationship. What factors commonly complicate Due Diligence? Typically, not obtaining the right information from the subject of the Due Diligence enquiry or, not enough of it. A failure to do so will invariably lead to both ineffectiveness and inefficiencies because the first thing that must be done is to verify what you have. If you are not in possession of the right data, you may well be looking for something that doesn’t exist, or worse still, end up putting a lot of effort into researching what turns out to be a false positive. There are of course other factors that complicate the process. In most cases, Due Diligence is conducted online, be that via open sources, subscription databases or a combination of the two. The Internet is awash with information, it has been described as ‘drinking from a firehose’. So, the sheer volumes of data, and being able to differentiate between good, bad, malicious, and misleading information is a key skill. Language is an area that can also cause problems. If you are an English speaker then you are in luck because that is the most popular language on the World Wide Web. Chinese and Russian sites are becoming increasingly popular though, so if you want to delve deeper you need reliable tools, or people, to help. Some of the most complex issues are the verification of the source of funds and source of wealth. This is where you often have to be ethically creative when identifying sources to achieve your objective, social media is a prime example. I think I also must mention the expectations of managers, many of whom employ staff to conduct these types of investigations, with little or no training. Conducting a few Google searches is not Due Diligence and certainly would not be sufficient to satisfy a regulator in the event of an issue arising. What role has Due Diligence played in the recent sanctions against Russia? A thorough Due Diligence investigation should go as far as to identify links between companies and individuals. One of the issues for anyone conducting Due Diligence in relation to the sanctions and Russia is finding those links. As a former police officer, I have always found it helpful when investigating, to try and think like the person I am researching. If I was a wealthy Russian and wanted to avoid sanctions, then I would hide behind layers of companies, people, or complex structures to obfuscate my involvement. A good investigator will be looking for the clues, the patterns and sometimes the absence of certain information to make those connections. This takes knowledge, skills, and time. I think it is difficult for me to judge what the role of Due Diligence has played in recent sanctions against Russia at a global level. I can however tell you that I conducted a recent investigation that found links to Russian individuals and companies that were not obvious or evident. It was arduous and time-consuming, my worry is that things may be getting missed and that has implications at several levels. What are some of the most interesting or challenging investigations Intelect Group has worked on recently? I consider myself very lucky to have been involved in all manner of investigations, many of which have their own individual challenges. When I joined the police service in the early 1980s there was no Internet and you had to get out and speak to people. The world is very different now, information is online, and it can be created and removed in seconds. We have social media and online

RkJQdWJsaXNoZXIy Mjk3Mzkz