The Background:
In June 2023, the compliance department of a French industrial group called on Infogence to assess the integrity of a potential new Partner in the metro train and railways industry. They asked us to conduct a thorough investigative due diligence on the target without the target being aware of it.
The Mission:
The idea was to conduct a thorough research so as to create a detailed profile of the target company and highlight red flags so as to take informed decisions and create risk mitigation plans.
Our client who was subject to the French Sapin II regulations. Before entering into this strategic commercial partnership they wanted to know more about the compliance and business ethics of this company.
They wanted us to create a detailed profile regarding the integrity of this company, and to measure the risks associated with a possible entry into a business relationship.
Result of our investigations:
Behind the facade of a solid and well-established company was a more complex profile than meets the eye. This target company had a formidable expertise in advanced technology solutions for the railways industry. Its impressive order book and its annual turnover pointed to a robust financial health. Its governance, seemed to be transparent at first glance.
But our investigations revealed some worrying grey areas. The company has been embroiled in several recent controversies: a contract worth millions of US Dollars awarded by the government without a call for tenders, several litigations filed by the target company on its vendors and suppliers. Even more interesting was that two of its main shareholders were politically exposed persons (PEPs), raising questions about potential conflicts of interest.
Thanks to our assessment, the client got a clear view of the issues and risks associated with this potential partnership. While this potential new Partner’s technical expertise and financial strength were undeniable, the presence of two PEPs among its shareholders, several litigations and recent controversies called for the utmost vigilance.
Our investigative due diligence analysis enabled the client to anticipate and prevent possible negative repercussions, both in terms of reputation and regulations. With this information, the client could consider the continuation of this relation with greater peace of mind, by putting in place the necessary safeguards and mitigation plans.
Contact us to discuss your Due Diligence requirements