Discovering crucial risks in a major international joint venture

Our work ultimately uncovered the following risks and information of interest to our client:

• Firm X had recently separated from its parent company. Although no longer a subsidiary, complicated links remained via individuals with shared ownership stakes.

• Both Firm X and its former parent appeared to have substantial government links, including shared office buildings and IT infrastructure with government agencies.

• Firm X’s former parent included state-owned enterprises from countries with poor compliance track-records, including a company on multiple Western sanctions lists.

• Firm X’s former parent also had longstanding relationships with a state-owned company mired by corruption scandals, as well as an ongoing legal dispute.

• An employee had exposed commercially sensitive information on social media,

• a potentially significant information security risk.

Our client was responsible for providing verifiable risk advice and business recommendations within a multinational energy company. They asked Ridgeway to research and examine Firm X’s financial, ownership and organisational structures as well as any relationships, government links and reputational issues. We were also asked to provide our expert opinion on business and cultural norms, and uncover and contextualise any adverse information.

Our research was able to provide a holistic representation of the risks at play. The analysis needed to be clear, verifiable and easily used in client discussions with other internal business units.

We assigned a team with relevant expertise and experience, including a culture and language expert and a financial specialist. A lead analyst with expertise in due diligence issues was appointed to manage the different project strands.

An immediate challenge was unpacking the firm’s identity and operational activities. Through meticulous research, including in native language, our researchers distinguished three entities operating with identical business names and disentangled a complex web of interconnecting companies.

Firm X had no online presence, an apparently limited physical and operational footprint, and very few personalities could be linked to the company. The company accounts in public records were limited and had not been independently audited.

Although Firm X’s low profile raised questions, our cultural specialists’ knowledge set this in context for the client. We were able to assert this this was a standard in-country business practice and in isolation did not indicate any suspicious activity.

Ridgeway was able to uncover and resolve ambiguity around business identities. From a strong assurance base, we disentangled the company structure, management and ownership information to undertake a thorough investigation of Firm X and its parent organisation.

Operating effectively across several languages and multimedia, our team succeeded in uncovering and translating hard-to-find information that was key to providing clear and accurate risk assessments. Adding further assurance, we verified client-supplied information against open sources to present a robust, fully-referenced analytical report.