Background Italia was requested to carry out extensive research on a portfolio of companies with debt default in the tourism and real estate sector as part of a background and valuation screening by a potential investor.
The aim of the project was to identify and value underlying assets, as well as the UBOs, of the portfolio of companies before the deadline for issuing a proposal for the acquisition of the debt.
Within a week’s time, Background Italia managed to establish the corporate structure of the company groups, the assets owned by the companies, their UBOs and it flagged integrity-related issues such as potential mafia links. Also, several of the underlying assets were identified to have been seized by the Italian tax collection agencies.
A German institutional investor tasked Background Italia with acquiring further details over the reputation, practices and integrity of a Spanish elderly healthcare provider. The institutional investor, interested in acquiring a non-controlling stake in the company, was carrying out a final reputational due diligence as part of its compliance program for investments in Southern Europe.
To fulfill the client’s requirements, the team executed a human intelligence operation that foresaw the retrieval of commentary from well-placed sources, such as former employees and competitors. The operation also engaged in the retrieval of corporate documentation to independently corroborate the legal shareholders and directors of the company.
While the company was not undergoing any civil litigation, risk derived from reputational aspects was identified; the company had been the target of criticisms by the general population and media amid a crisis prompted by the management of some of its elderly facilities in the south of Spain. Sources were able to corroborate this information, but suggested that the issue was not a structural matter and that the management had already taken steps to tackle the identified issues.
Background Italia was requested to carry out a pre-transactional due diligence project aimed at uncovering the chain of control of a Czech company active in the hydroelectric energy industry. The client wanted to establish an accurate picture of the shareholding structure of the entity and its management.
Preliminary research revealed that the company seemed to be under the direct management of an Italian individual with minimal experience in the energy field, but with an extensive array of directorships in the waste management industry in the center of Italy. Following these findings it was advised to expand the investigation to Italy and to carry out a series of discreet interviews in order to determine the context behind the individual’s appointment.
Findings of the investigation concluded that the manager of the hydroelectric company in the Czech Republic was the right hand of a prominent Italian waste management entrepreneur with mafia links; as such, the complex shareholding structure of the energy assets had been likely established to shelter the reputation of the energy company from its dubious ultimate beneficial owner.
Background Italia was tasked with identifying assets controlled by a wealthy individual as part of court-backed asset recovery efforts in France.
The team established an ongoing, daily effort of social media monitoring over the public profiles of the subject, whom was known to be an avid social media poster, in order to obtain information that could lead to the geo-localization of a luxurious villa in France.
Weeks after the commencement of the project, the continuous social media monitoring provided positive results, as the subject made a publication of a mini clip into what is known as a an Instagram story with the villa’s entrance in the background. Visual analysis of the video footage, paired with the known whereabouts of the individual, allowed to establish the exact location of the villa and to attach it to the asset recovery claim on behalf of the client.
An Italian investor requested Background Italia to carry out a DD assessment on a Romanian company prior to the commencement of a business relationship. The client, active in the production of bread and baked goods, was eager to diversify its supplier base in order to minimize its dependency to a single provider.
An expert team with knowledge in the local languages was soon gathered and put to work. An in-depth collection of data was executed, with the aim of understanding both the reputational standing and the financial strength of the company.
Findings were cross-checked with the narrative provided to the client and it was concluded that the supplier had given an accurate picture of its current financial standing. It was also concluded that neither the company nor its managers had faced civil or criminal investigations of any kind.
A local Italian energy player commissioned Background Italia to assess the overall standing of a Czech entrepreneur with interests throughout several European jurisdictions. The client was keen to understand the full extent of the subject’s sources of wealth prior to engaging in a business transaction with him.
After carrying out preliminary searches, the team laid out a research plan comprehensive of checks in a series of European and offshore jurisdictions, namely the British Virgin Islands, Cyprus, Czech Republic, Finland, the Netherlands and Switzerland. This, in order to establish the full picture of the interests held by the subject across the Globe.
Besides providing a clear picture of the corporate shareholding structure of the individual, research efforts culminated in the identification of several issues of potential concern in the tycoon’s home country. Not only the subject had been subject to an investigation, but three of his managers had been indicted of fraudulent activities amidst a hostile corporate takeover.
A local Italian car parts manufacturer tasked Background Italia with carrying out an overall DD assessment on a locally-based buyer. The objective was to clarify the corporate ownership of the entity and to establish an understanding of the ultimate beneficial owner’s reputation.
Upon an initial inspection, it was identified that the company was a wholly-owned subsidiary of a British company, reportedly controlled by a Greek entity. As a result, the research scope was expanded onto those two territories.
Research discovered that the Greek company was controlled by a Greek entrepreneur with close familial connections to a well-known local politician.
A British investor was keen on assessing the current legal standing of a subject they were about to engage in business with in Portugal. Previous research had suggested that there were past and ongoing litigation proceedings against the individual, active in the real estate and tourism sectors. As such, Background Italia was tasked with assessing the current legal standing of the subject in the southern European jurisdiction.
Upon discovery, Background Italia’s local expert team moved forward to obtain as much information as possible in relation to the legal claims in a compliant manner.
Results of the research concluded that while several claims had been archived, including a EUR30m claim for unpaid debts against the subject, a series of pending cases continued to lurk in the shadows for the individual. The team also managed to retrieve official documentation that showcased the status of several of the archived cases.
An Italian based investor requested Background Italia to execute an in-depth DD investigation on a series of individuals in the industry of baked goods. The investor, keen on understanding the corporate network of power, wanted to understand whether there were any connections between the individuals and a several Chinese manufacturers.
Background Italia was tasked with mapping the ownership chain and corporate structure of a Luxembourg-based holding company with prominent assets under its control. The key objective was to corroborate whether the entity was ultimately controlled by a Russian conglomerate with ties to the Kremlin and subject to sanctions imposed by the US’s Office of Foreign Assets Control (OFAC).
A top-tier team of multilingual researchers was soon put together; this, with the aim of unraveling the intricate corporate structure of the group, which encompassed companies in countries such as Luxembourg, Cyprus, the Bahamas, the British Virgin Islands, the Cayman Islands, or Russia.
Not only was the team able to map the ownership chain of the holding company but was able to confirm undeniable links between the Luxembourg-based entity and a Russian tycoon with prominent interests around the globe.
Background Italia was tasked with carrying out an assessment of a wealthy Indian individual with affiliated companies in the United States as part of a pre-transactional due diligence. Discretion was essential in order not to disturb the development of the negotiations with the Italian counterparty.
After a preliminary check on the subject’s interests, the DD team determined the key jurisdictions in which to work on and carried out an overall mapping of the corporate structure controlled by the subject.
While the overall assessment determined that no red flag issues were apparent with the subject and his corporate interests, it allowed the counterparty to rule out any reputational risk when engaging in business with him.
Background Italia was tasked to analyze a prominent Singaporean manager that was following an M&A process for one of the subsidiaries of the corporate group, active in commodity trading. Recent leaks of information to the press had made the parent company’s board suspicious of the individuals closest to the deal.
Discretion was crucial to prevent any backlash in regards to the investigation. A series of open-sourced checks were carried on the managers with key information on the M&A process. It was discovered that a manager of the company had close familial ties with a direct competitor, reason for which it was decided to establish surveillance on the subject for a period of time.
The surveillance unit managed to confirm that the subject was constantly meeting with the directors of the competing firm, which was benefiting from the press leakages, as well as with journalists. With the information at hand, the manager was replaced by a member of the parent company’s board; by this time, leakages of information to the press ceased.
Background Italia was requested to evaluate the reputation and practices of an Italy-founded pharmacological company with operations in Italy, India, the US and Brazil. Ongoing concerns from the client were due to rumors from the market that suggested that the company had undergone shady operations to sell products of lesser quality to the market.
Background Italia made an assessment of the corporate structure of the group and identified all key operational subsidiaries of the entity. Then, it gathered documentation of the subsidiaries of interest and established surveillance operations on the ground to assess the sourcing of the materials entering operational facilities. The team also carried out discreet encounters with whistleblowers of the entity.
It was established that, while the company was fully compliant in the developed markets, such as Italy and the US, the operations based in Brazil and India had recently been working with a lower degree of compliance in terms of health and safety regulations. Specifically, the team managed to establish that, for example, the operational subsidiary in Brazil was sourcing part of its raw materials from local producers that did not follow a strict health and safety procedure during their production process. The material sourced from these local producers was then used to manufacture medical products consumed mainly in the US.
Background Italia was tasked with identifying all assets held by a major Italian builder, as well as assessing any reputational or integrity issues that might arise from working with the construction company. The client, a major American private equity fund, had received a communication from its Italian counterpart making a strong case for the fund to become its financial partner.
The roadbuilder was said to be working on a strategy to increase its presence in foreign markets; for that, however, the construction company was reported to require a strong financial backing. Given the global presence of the Italian construction company, the team initially developed a structure of the company, as a way to determine the predominant jurisdictions of interest; priorities were assigned based on an assessment of overall revenues per geographical location, as well as the impact of future business development in the area, with an emphasis on jurisdictions prone to the existence of corruption cases or fraudulent activity, such as Venezuela, Russia and North Korea.
It was identified that the company had an established presence in Venezuela, but the current financial crisis of the country had dramatically affected the company, forcing it to declare a substantial impairment on its Venezuelan assets. The company was also identified to have been assessing future developments in Russian territory through a small subsidiary that was later absorbed by another company of the group. Lastly, it was identified that, while the company and its officers seemed to enjoy from a predominately positive reputation, several Italian and foreign subsidiaries of the group had been involved in civil litigation proceedings, all of which the client was not aware of.
Background Italia was tasked with carrying out a background check on the CEO of an international fashion brand. The aim was to understand the relationship between the CEO and the chairman of the company, as well as the reasons behind his appointment in the role. Discretion on the task was imperative, as the client was assessing potential business relationship with the company. Through research, data analysis and human intelligence, Background Italia managed to obtain valuable insights on the key points of the business and familial relationships between the two subjects and gave an understanding of how and why the CEO was appointed on the role in the first place. Background Italia established that the CEO of the entity had been appointed to the role after having met the chairman of the company on a charity event; the personal connections between the two subjects were a major reason that explained why the chairman, a major shareholder of the entity, decided to appoint a CEO with limited experience in the role.
Background Italia was commissioned a pre-transactional due diligence operation on a major Argentinian manufacturer of sportswear and its IArgentinian managers. The goal of the research was to identify potential issues regarding the reputation and integrity of the subjects related to the manufacturing company.
The team established that the best approach was to conduct a thorough search of potential issues relating to the targets of the investigation through open-sourced research. With an understanding of the data and information publicly available, the team executed intelligence gathering on the ground to separate fact from fiction. While no FCPA issues were identified, it was concluded that one of the Argentinian managers of the firm had been involved in a bankruptcy proceeding and a subsequent agreement with creditors at another Argentinian company. The finding, previously unknown to the potential buyers, provided a valuable insight into the management of the company and a base to make an informed decision.
An Italian insurer requested Background Italia to establish surveillance efforts on a US-based subject that had claimed hefty sums for damages against one of its clients. According to the claim, the individual suffered a major injury caused by the insured client’s motor vehicle that led to a walking impairment.
Background Italia’s initial efforts were focused in locating the individual; it was concluded that the subject was residing in the suburbs of a major city of Denver, USA. The firm deployed boots on the ground and established daily surveillance on the claimant, in order to obtain evidence of her current physical ability to walk.
After days of surveillance, enough material to support the thesis that no walking impairment was apparent was gathered and sent to the client, allowing for a successful resolution of the events on the client’s end.
Background Italia was tasked with reconstructing the ownership structure of a US company based in Delaware. The firm, reportedly active in the IT consultancy field, was to seal a deal with an Italian counterparty, but being in Delaware, little to no information was obtainable from the official excerpts of the State’s business registry.
Background Italia engaged in a series of discreet interviews in order to understand the links between the manager and the unknown shareholders. Human intelligence revealed that the director of the company was the wife of a prominent IT manager in Italy who had recently been working closely with a Swiss investor.
Upon discovery, research expanded into the Italian and Swiss jurisdictions, covering the known shareholdings and directorships of the two subjects both in Italy and Switzerland. Soon enough, a 2014 financial statement of an Italian entity provided key data that suggested that the Swiss investor was the ultimate beneficial owner of the Delaware-based entity.
A prominent Italian investor approached Background Italia for a case involving several non-profit organizations controlled by a Portuguese energy player in Mozambique. The key task of the project was to establish whether the NGOs were being correctly used for their stated purposes. The NGOs, officially created for the promotion of cheap access to the clean energies, were suspected of having served as a channel to fund a series of payments to local officials for the awarding of public tenders.
Background Italia carried out an assessment of the publicly-retrievable information related to the target entities, its parent company and their management, and established that on-the-ground witness interviews were required.
A series of discreet interviews were carried with subjects knowledgeable of the affairs of the NGOs and their statements corroborated the thesis proposed by the client. Whilst no fact-based evidence of any wrongdoing was identified, the information retrieved through human intelligence allowed the client to mitigate the risk of dealing with the entity by engaging in contractual obligations with an Italian subsidiary of the Portuguese parent company that was completely de-attached from the NGOs’ chain of command
Background Italia was tasked by a Swiss investor to carry out a DD assessment and a contextual market overview of a kangaroo meat exporter. The firm was keen to becoming the sole importer of for the European markets, but wanted to have an overall understanding of the exporter’s local reputation.
Background Italia carried out an reputational DD assessment on the kangaroo meat producer, its managers and key shareholders. The firm also carried out a comparative analysis of the general trends of the market competitors, so as to provide the client with a benchmark of the current standing of the exporter.
Results on the reputational DD assignment did not identify any major issues with the company and the analysis of the overall market found that the meat producer was at a financially stronger position than its local counterparties.