Ownership or control of an asset or business transaction might be founded in one or more entity, in an organisational framework. An unexpected or opaque entity involvement in an arrangement, may lead to confusion about beneficial ownership and/or management control.
Focused research often adds clarity about an entity's involvement in asset ownership or business proposition. Information identified is used to make better informed decisions about investment opportunities and business relationships.
Source of risk
Examples of risk to consider, include:
Use of similar named entity, where ownership or control is vested in the less transparent entity (e.g. XYZ123 Limited - UK entity, XYZ123 Limited - non-UK entity)
Credibility or reputation risk associated with asset owners, controllers or their senior management (e.g. linked to unethical practice, or improper or illegal activity)
Binding contracts or informal arrangements, inherited where a party connected with an asset manager/controller provides on-going services of inadequate standard or quality, but at a committed overhead cost
Mitigating identifiable risk
A red-flag or anomaly identified in an entity's association with an asset (via management or control):
Is not automatically indicative of fraud or other impropriety, but may indicate the presence of a party who could influence or prejudice asset ownership
Should be risk-assessed and responded to accordingly (e.g. via considering appropriate disclaimer, indemnity or other arrangement to minimise any latent or legacy risk)
Provides greater awareness about deal participants, which can be used to inform deal planning or transaction strategy
Enables consideration of potential for civil or criminal liability, or of applicable legal and regulatory requirements, when managing reputation risk
Promotes deal advancement (e.g. where risk identified can be appropriately mitigated) or deal exit (e.g. where risk identified exceeds risk appetite)
How we can help you
FCRM researches entities, their owners and controllers, for indicators of anomaly, red-flag or other impropriety (e.g. fraud, dishonesty, regulatory censure or law enforcement interest, etc.), to provide clients with an informed risk profile.
In appropriate circumstances we provide (or assist clients to prepare) structured questionnaires for completion by target entity representatives (e.g. members of the senior management team), to aid develop and assess their risk profile.
Where practicable, on international engagements we utilise a network of reliable contacts and intelligence sources, to leverage their knowledge of local culture, launguage, practices and information repositories.