Due Diligence

Due Diligence

The integrity of an individual or a company is a matter of concern when you are considering a trade, an investment, a merger or acquisition. Prior to establishing ties with another business, it is important to have in-depth knowledge about the background information and financial status of the company, as well as those of its related parties.

Advantages of conducting Due Diligence

Our Due Diligence and Compliance Services can:

  • Allow you to be better informed about your potential client, vendor, or business partner.
  • Help you avoid pitfalls and make critical decisions with confidence.

What does HERALD offer you?

To help you confirm all facts before signing a contract, we provide sophisticated Background Checks on Individuals and Companies. We are also experienced in Pre-Initial Public Offering (IPO) Due Diligence.

1. Pre-Initial Public Offering (IPO) Due Diligence

Before your company hits the milestone of becoming publicly listed, you need assistance from due diligence experts to ensure that the company is in good standing. Not only does a comprehensive investigation give you a better understanding of your company’s strength and potential risks, it also allows the public and potential investors to be more confident about the validity and sustainability of your company.

To ensure the completeness and accuracy of information on offering papers, we carry out a full pre-IPO investigation on your company, from reviewing basic information such as articles of incorporation, organizational chart and financial condition, to studying the smallest details, such as all agreements and contracts signed, environmental liabilities, tax returns, intellectual property, litigation history and publicity records.

2. Full Individual Background Check

  • Directorship Search:
    We conduct searches to find out the directorship history of the Subject – whether the Subject has been in leadership roles in any local or overseas companies, operating or dissolved.

 

  • Civil & Criminal Litigation Search:
    We dig into the civil and criminal litigation records to find out if the Subject has engaged in any lawsuits as a plaintiff or defendant.

 

  • Bankruptcy Search:
    To reveal all undischarged and discharged bankruptcy orders on the Subject.

 

  • Disqualification Search:
    Undischarged bankruptcy or criminal records can ban one from being a company director. A disqualification order can last a considerable amount of time, ranging from 1 to 15 years, prohibiting one from acting as a company director in the future. A disqualification search can therefore help you determine if a person is financially stable and trustworthy of your investment.

 

  • Shareholding Disclosures:
    We acquire information on all the listed companies which the Subject is a substantial shareholder with 5% of voting shares or above. Such investigation may help you clear any unwanted conflicts of interests.

 

  • Individual Irregularity & Disciplinary Action Check:
    Our inquiry sets out to check if the Subject has been involved in any professional misconduct, mismanagement, neglect of duties, breach of morality, or failure to adhere to the requirements and laws, assuring you of the Subject’s reputation.

 

  • Education & Employment Qualification:
    We provide verification on the Subject’s education and previous positions, so that you can confirm if the Subject’s background is truly as he or she claims.

 

  • Media & Internet Search:
    Our comprehensive search runs through press coverage on both traditional paper press and digital media outlets. We solicit information from various sources, including but not limited to newspapers, television broadcasts, social media platforms, open sources on the web, annual reports of listed corporations and official announcements from the government, uncovering significant activities and public opinions that reflect the reputation of the Subject.

 

  • Global Compliance Search:
    Conducted within the databases of local and overseas authorities, our comprehensive compliance search helps you reveal whether your potential business partner appears on any watchlist and sanction list globally. You will be alerted if the Subject is suspected to be involved in serious criminal offences such as money laundering, fraud or any other organized crime.

3. Full Company Background Check (Know Your Client “KYC”)

  • Business Registration:
    We acquire the basic information about the target company, including its address, status and nature of business, for a preliminary research on the background of the company.
 
  • Civil & Criminal Litigation Search:
    We dig into the civil and criminal litigation records to find out if the target company has engaged in any lawsuits as a plaintiff or defendant.
 
  • Winding-Up Record:
    Find out whether the target company is facing voluntary or compulsory insolvency to prevent you from investing into businesses that are closing due to debts.
 
  • Shareholding Disclosures:
    We acquire information on all the listed companies which the target company is a substantial shareholder with 5% of voting shares or above. Such investigation may help you clear any unwanted conflicts of interests.
 
  • Company Irregularity & Disciplinary Action Check:
    Our inquiry sets out to check if the target company has been involved in any market misconduct, breach of regulations and any other additional offences.
 
  • Financial Statement (if available):
    If financial statements are available, we examine the expenditures, revenues and debts to provide projections on the target company’s financial performance and integrity.
 
  • Business Structure:
    An analysis on the legal status of the target company helps you assess its financial situation and tax liability. Is it profit or non-profit? Does the business model belong to sole proprietorship, partnership, limited liability company or a corporation?
 
  • Business Site Visit:
    Site visits are an important part of a KYC Investigation, as they allow you to have first-hand observations about the operations of a business. However, the process could take a considerable amount of time if multiple visits are necessary. We can relieve you of the time and work by paying visits on your behalf. We provide observations on the operations of office and the performance of retail stores, with special attention paid to signs of fraud and unstable operation.
 
  • Reputation Business Intelligence:
    Discreet source interviews whereby will reach out to trade unions, local authorities, suppliers, customers, competitors and/or current and ex-employees of the target company in an effort to understand the target company better.
 
  • Domain Name Search:
    While a domain name search might sound like something that can be accomplished by googling, it in fact requires professional knowledge. In the process of verifying a domain name, you will learn about the online presence of the company – whether it has been banned by search engines due to suspicious behaviours, blacklisted by email service providers as scam, or involved with trademark and copyright disputes.
 
  • Trademark & Patent Search:
    We verify whether the trademark and patent assets of the target company are legitimate, and reveal the prosecution history of a patent. Such search highlights the edge and risks of a patent and helps you make better commercial decisions.
 
  • Media & Internet Search: 
    Our comprehensive search runs through press coverage on both traditional paper press and digital media outlets. We solicit information from various sources, including but not limited to newspapers, television broadcasts, social media platforms, open sources on the web, annual reports of listed corporations and official announcements from the government, uncovering significant activities that reflect the reputation of the target company. 
 
  • Global Compliance Search:
    Conducted within the databases of local and overseas authorities, our comprehensive compliance search helps you reveal whether your potential business partner appears on any watchlist and sanction list globally. You will be alerted if the target company is suspected to be involved in serious criminal offences such as money laundering, fraud or any other organized crime.

Herald offers competitive Investigation Services. To request a quotation or submit further instruction, please send us an email at info@herald.com.hk.