Due diligence goes far beyond the analysis of financial statements or the assessment of a company’s situation based on the balance sheet. It also includes checking the quality of management, transparency of operations, compliance with laws and regulations, as well as the company’s capital and personal relationships.
Analysis of the company’s reputation – what do the reviews and comments say?
During the due diligence process, we also analyse the company’s reputation. We start by reviewing the reviews available in the online space – and we do not limit ourselves to popular platforms or Google ratings. Increasingly, clients and customers are sharing their experiences directly on the company’s social media, so it is equally important to carefully analyse the comments underneath published posts.
Media research – how to interpret media information?
In the following media reserach, we look for press articles and media materials about the company in question, which may reveal controversies related to its activities, allegations of unfair practices or information about the possible commission of crimes. However, it should be borne in mind that it is not always possible to verify the veracity of such reports, especially since in many countries access to court records is limited or completely secret.
Often, searches for court cases are only possible by case numbers, which in practice makes it impossible to effectively verify rulings if you do not know these details. In addition, it is important to be aware that publications in the media or on the internet can be used to deliberately defame a company. Therefore, when analysing this type of material, we also take into account the credibility of the source, its potential political affiliation or tabloid nature.
HUMINT – personal interview as a due diligence tool
Detectives and HUMINT play a key role in such situations. HUMINT (Human Intelligence) involves obtaining information from human sources, including through interviews with former employees, contractors or competitors. It can take a variety of forms – from face-to-face meetings to telephone conversations to email contact – but should always be conducted discreetly so that the company is not aware that it is being vetted. This type of activity is mainly carried out by experienced detectives who have an extensive network of contacts, are familiar with the realities of the industry and are able to select sources of information appropriately for a particular case.
Confirming or refuting unofficial information
Interviewees can confirm or refute information appearing in the media, which is an important signal to a potential counterparty – it can be both a red warning light and a green signal to continue discussions.
Summary
At Verificators, we perform due diligence on markets in different parts of the world. We work with trusted subcontractors in many countries across Europe and beyond, allowing us to effectively reach out to local sources of personnel carefully tailored to the specifics of each case.
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Author: Paulina Marek Investigative Analyst
