Integrity Due Diligence

Solutions

Integrity Due Diligence 

Renewed impetus for enhanced due diligence: why verifying third parties is more important now than ever

Companies need to keep going despite the challenging situation on the market today, meaning that they still have to search for and engage new counterparties. However, as face-to-face meetings are now practically impossible, companies are forced to rely on technology alone to get an accurate impression of third parties. This is a new development that market players are still adjusting to.

Now more than ever, gathering the largest possible amount of information on potential counterparties or prospective employees is crucial. This is where Integrity Due Diligence (IDD) comes in: a solution that requires no personal contact between the due diligence consultant and the object of investigation.

IDD provides full scope search and analysis of publicly available information related to the legal entity or individual (object) under investigation. This knowledge empowers companies to make informed decisions on whether or not to work with a third party.  

Why is IDD so important now?

  • Obtaining a complete and accurate picture of the integrity of your company’s key counterparties is crucial. Such analysis can help client companies determine the most vulnerable link in their supply chain, enabling them to prepare for any problem that may arise.
  • Automated tools are prone to error as the information databases used by companies often contain outdated or incomplete regulatory data. This is why IDD may become the only reliable solution for companies’ due diligence needs.
  • It is highly likely that some of your counterparties will lose their current market position in the near future, making your relationship with them untenable. Companies must therefore be agile: they must be ready to change counterparties quickly while incurring minimum losses and prepare preliminary analyses of their integrity ahead of time.

Examples of our team’s IDD findings:

  • By analyzing pictures posted on social media by an individual claiming to be the ultimate beneficial owner of a relatively large business, as well as the accompanying comments, we were able to show our client that the individual was the nominee and director of this business with a high degree of certainty.
  • Using international corporate databases, we were able to determine that a company ostensibly belonging to a Scandinavian investment fund was actually managed (and probably owned) by a group of individuals living in Russia.
  • By analyzing publicly available corporate information on a number of legal entities, we were able to put together the biographies and career histories of several individuals and uncovered a potential conflict of interests between a highly-placed employee of the client company and the CEO of one of its key suppliers.

Negligence or an unsystematic approach to due diligence could lead to risks such as outflows of funds or assets from your company, reputational damage, delays in supply and unexpected counterparty bankruptcies, which could result in financial losses. 

How well do you really know your counterparties?  

Key contacts

Alexander Sokolov

Alexander Sokolov

Managing Partner, Financial Advisory

Alexander is Head of CIS Financial Advisory and leads Deloitte’s Forensic practice in Russia and the CIS. He joined Deloitte in 2012. Alexander has 15 years of experience in consulting. He started his... More

Ludmila Grechanik

Ludmila Grechanik

Partner, Financial Advisory

Ludmila joined Deloitte Forensic in May 2012 having spent the previous nine years in the Forensic department of another Big Four firm. Previously, she had also worked in the Financial Services Assuran... More

Alina Sokolova

Alina Sokolova

Partner, Forensic

Alina joined Deloitte CIS Forensic as a Director, having previously worked at another Big Four firm. Altogether, she has over 13 years’ project management experience in identifying, investigating and ... More