Due Diligence Uncovers a Bribery Scandal Before An Overseas Investment


It wasn’t so long ago that Trevor Milton resigned his position as chairman of electric trucking company Nikola after an investment fund accused him of deceiving investors about the company’s technology. These assertions drove General Motors to take a $2 billion stake in Nikola before the company had produced a single truck.

This is just one example of the importance of prioritizing due diligence before an investment is made—an effort that can help investors potentially avoid millions of dollars in losses and getting embroiled in scandal. However, when an important deal is on the line, cursory due diligence conducted internally is often not enough to meet the thorough vetting requirements of an investor to mitigate risk. Such was the case of a recent Vcheck Global client seeking to invest in an European battery company.

The client requested Vcheck Global conduct deep-dive diligence on the company and its executives, and through this investigation Vcheck Global uncovered that the CEO of the company was embroiled in a bribery scandal during his previous employment with an Asian electric company. These findings came about as a result of verifying the battery company’s executives’ employment history in foreign jurisdictions, as well as combing public records and media sources in those foreign jurisdictions for unexpected information.

In presenting findings to the client, Vcheck Global’s due diligence report detailed how the CEO of the battery company was close to politicians where the company operated, but sources investigated by Vcheck Global could not draw a straight line between the CEO and allegations of corruption. The Vcheck Global report also noted that the sources reporting on the allegations stemmed from one NGO report, and that there was no corroborating reporting in other mainstream media outlets.

The findings from Vcheck Global’s due diligence ultimately helped the client make an informed decision based on what was gleaned and then corroborated by the client’s internal due diligence. If you or your business is considering foreign investment, Vcheck Global’s team has years of experience collaborating with internal due diligence teams to provide deep-dive diligence on subjects involved in the investment opportunities. Contact us to learn more.

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