A German family office’s EUR 20 million investment in green energy had gone with the wind.
Working for the fund’s lawyers in preparation for a lawsuit, FRANK PARTNERS investigated an entrepreneur accused of embezzling the money, tracking his commercial footprint and lavish lifestyle. In order to identify assets, FRANK PARTNERS analysts trawled the public domain—balance sheets, property records, press, social media—in Germany, Switzerland and other European countries and conducted discreet interviews with the embezzler’s former associates. FRANK PARTNERS provided the fund’s lawyers with a list of his assets worth an estimated EUR 5 million.
The lawyers then presented the list to a court in Germany, which issued an order freezing the assets.
FRANK PARTNERS helps implement a global Know-Your-Customer (KYC) programme for a Western bank, screening loan applicants for issues such as false or incomplete data provided, past insolvencies, litigation or negative media.
Smaller in budget than a full-blown due-diligence report, these KYC checks allow the bank to filter out unsuitable applicants at an early stage by identifying any so-called “red flags” with which it would not like to be publicly associated. Geographically, we cover Scandinavia and the German-speaking lands for this client; the companies we have investigated are as diverse as these countries’ economies, ranging from old-fashioned electronics to biotech.
In preparation for a joint venture with a Russian chemicals producer, a Western corporation asked its lawyers to clarify rumours suggesting local politicians were among the potential partner’s ultimate owners.
The law firm commissioned FRANK PARTNERS to investigate the chain of ownership, starting with the immediate parent company, registered, as is common for Russian businesses, in Cyprus. By means of documents obtained from corporate registries around the world—in combination with comprehensive cross-checking, in print and social media, of all company and people’s names we came across—we were able to chart dozens of companies across further offshore jurisdictions: the British Virgin Islands, Bermuda, the Isle of Man, Luxembourg, Malta and Liechtenstein.
A graphic chart illustrating the intricate web of companies helped demonstrate the lengths to which the partner had gone to hide the fact that its ultimate shareholders included people from the entourage of several local politicians in Russia.
A German investment firm scouting for rare-earth opportunities approached FRANK PARTNERS to compile an analysis of this sector in Greenland, where such minerals have recently been found.
The firm wanted an analysis of the political parties’ positions on rare-earth mining, ahead of upcoming elections, and to understand how recent legislative changes could impact investment opportunities on the island. FRANK PARTNERS compiled a report based on an examination of scientific studies, parliamentary documents and the wider media—as well as conversations with leading industry experts in Greenland and Denmark—that outlined possible scenarios for a policy change and identified key decision makers.
A UK private equity firm seeking to invest in a Norwegian offshore company was concerned about rumours that the founder-CEO’s erratic leadership style was alienating key members of his management.
Discreet interviews with sector experts and former employees of the company signaled that, although the founder was recognized as having built the company from scratch into an industry-leader, he had begun making questionable decisions—such as investing company money into unrelated businesses in which he was a shareholder—and had indeed lost the unequivocal support of several senior colleagues.
Equipped with this knowledge, the client sealed a deal whereby the founder was moved from an operational into a supervisory position.
A German industrial midcap approached FRANK PARTNERS for a review of its elaborate supply chain in Russia, consisting of more than 20 separate suppliers.
Our cost-efficient solution—offering a discount on account of the volume of research—allowed us to check all suppliers for issues of potential concerns in the public domain and conduct interviews with industry experts on four companies where the concerns were greatest.
Our analysis allowed the client to clean up their supply chain without disrupting its business operations in Russia or attracting damaging media coverage, ceasing relations with only two of its existing suppliers.
Ahead of approving a substantial credit line to a leading Kazakh telecoms corporation, a US bank asked FRANK PARTNERS to compile a profile of its chairman and main shareholder, one of Kasakhstan’s wealthiest people, in order to gage the reputational risk involved.
Beyond understanding the tycoon’s background and current business interests, the client was interested in any adverse coverage in the local media, legal disputes, regulatory troubles or ties to politicians or government officials.
FRANK PARTNERS’ comprehensive research of the public domain—press archives in Kazakh and Russian; corporate records; litigation and bankruptcy filings—as well as conversations with country experts and regional telecoms analysts, provided context and analysis to guide the client’s credit-approval process.
Ahead of launching negotiations in China, a German car-parts supplier planning an investment there required background on the owners and reputation of three Chinese joint-venture candidates.
FRANK PARTNERS first compiled a detailed overview based on media research in Cantonese, Mandarin and English and on public filings (including corporate records, industry permits and shareholder lists) obtained by a local researcher from a number of official registries. Next, we sought commentary on the three candidates from local industry experts, who revealed that a previous attempt by a competitor from Europe to establish a joint venture with one of the companies had failed: the European group had broken off talks after accusing the Chinese partner of stealing its intellectual property. This insight allowed the client to identify a serious risk in advance and avoid a similar debacle.
A Swedish manufacturing company was seeking a CEO to head its newly established Indian subsidiary. Headhunters had identified three local candidates: while their CVs and initial interviews seemed promising, the client wanted to verify their track record and establish their reputation in the wider industry.
FRANK PARTNERS’ research of Indian media and public filings closed a number of gaps on the candidates’ CVs, while conversations with former employers and market competitors revealed that all the candidates enjoyed a good reputation in the sector. Yet of these only one received outstanding and unanimous appraisal from all sources interviewed—and went on to be hired by the client.
A German engineering group seeking to bid for public contracts in Angola was preparing to set up a joint venture with a local company.
Internal compliance procedures required the management to commission an external report in order to gain a better understanding of the potential business partner. FRANK PARTNERS advised the client that, due to a lack of searchable media archives and the dearth of reliable, up-to-date public filings, research should consist mainly of discreet conversations with individuals well placed to comment on the joint-venture partner and its key stakeholders. The interviews, conducted through FRANK PARTNERS’ local sources, indicated that the management team had a solid reputation and ample experience with infrastructure projects in Angola, South Africa and Namibia.
One concern was that a minority shareholder in the company was a family relative to a senior member of the Angolan government. Further enquiries revealed, however, that the shareholder enjoyed a good reputation in Angola for investing in up-and-coming businesses and that his role in the company was largely that of a passive investor.
In order to bid for a contract on a state-sponsored energy project in Egypt, a German technology mid-cap had to hire a local consultant to guide them through the tendering process. Yet before going ahead, the client wanted to understand whether the candidate in question did indeed possess the contacts he boasted of and how other Western clients had viewed his track record as a consultant, particularly whether he was known for any involvement in corruption.
Through discreet conversations with well-placed industry sources in Egypt and business expatriates, FRANK PARTNERS was able to report that the consultant had allegedly fallen out of favour with key decision-makers in the Egyptian energy ministry through a number of ill-advised deals in recent years. The commentary gathered suggested proceeding with this consultant could harm the client’s chances of winning the contract in question, or otherwise of the deal being a success, and so the candidate was dropped. Similar enquiries on another consultant showed he enjoyed a reputation as a reliable and trustworthy intermediary, and hence the client proceeded with him.
A German engineering consultancy planned to pitch to Brazilian construction firms involved in large-scale infrastructure projects related to the World Cup and the Olympics.
Having little knowledge of the Brazilian market, the German company considered engaging a local partner to help it gain access to clients. However, a number of the candidates asked for high success fees, leading to concerns about their modus operandi.
FP conducted enquiries on three shortlisted agents to understand their track record; the true extent of their purported connections; and whether their methods complied with the German firm’s corporate guidelines.
The review showed that one of the agents had overstated their access to decision-makers, whilst another was said to have behaved unethically in the past. The German company signed an agreement with the third agent, which demonstrated a solid track record and enjoyed a good reputation among other European companies from a variety of sectors.
A Norwegian investment bank traditionally involved in oil exploration was approached by a US energy firm to exploit a shale gas field in the state of Michigan. In view of the sensitivity associated in Europe with hydraulic fracturing, the investment bank, which was backed by a large pension fund, needed to better understand the US firm’s industry reputation and track record prior to committing to a deal.
FP’s review revealed that the company, founded a year earlier, had only recently begun exploring shale gas fields, and its management lacked any significant experience in the onshore drilling industry. Further enquiries revealed that the operator had yet to obtain a licence from the state regulator to extract shale gas.
The investment bank concluded that any financing of the project would be contingent on finding a different local partner in the US with a more solid track record.
A multi-national energy company was approached by a consultant claiming that obtaining a licence in Nigeria for the extractive industry was only possible with the help of a facilitator with access to decision-makers — and that she had such connections.
Prior to going ahead, the client required a due diligence investigation on the individual to understand her reputation and assess the true extent and reliability of her network.
Discreet enquiries with well-placed sources revealed that the consultant had indeed previously had direct access to the president and other high-level politicians, yet had recently fallen out of favour in the wake of a botched attempt to salvage her personal finances. The subject had defaulted on a loan from a bank in Mauritius and, when the matter went to court, attempted to exert pressure against Mauritian politicians by threatening to instigate a diplomatic retaliation by the Nigerian government if she did not get her way.
As a result, the agent’s backers in Nigeria shunned her, leaving her without high-level political access and wrecking her reputation in the country.
A European private equity firm was seeking investment opportunities in South Africa. A potential joint-venture partner based in the Middle East claimed to own businesses across the African continent and boasted of particularly strong commercial links in South Africa. Its website represented its operations in the region with a picture of the South African flag, while only listing one address in the Sudanese capital, Khartoum.
Targeted source enquiries revealed that the JV partner had not had any business dealings in Sudan, while a site visit established that the address was in fact a residential property. In South Africa, comprehensive searches of available public records found no trace of the company or its purported business partners or executives as having been involved in any local commercial activities.
Discreet enquiries with individuals who had dealings with the Middle Eastern company revealed that it had only one link to South Africa and the greater African continent: having launched a Corporate Social Responsibility (CSR) program, it had flown participants in from South Africa.
In the run-up to the 2012 elections, a multi-national client involved in the agricultural sector was considering an investment in the west of Kenya. Fearing a repeat of the 2007 election violence, in which key transport routes through the country were obstructed by road blocks set up by warring parties, the client commissioned a full political risk assessment on the election, its potential outcomes and the chances of political violence.
Research consisted of in-depth and wide-ranging interviews with high-ranking officials, political observers, journalists, business representatives and economists, amongst others. It included an analysis of the risks of transport to the harbour being disrupted and the corresponding damage to companies operating in western Kenya.
The assessment concluded that the election was not expected to provoke violence or disruptions at a level comparable to the previous election, and that the political risks identified in Kenya at the time of the election were ones that could be mitigated and managed by the client.
Regional partner specialising in Latin America and the Caribbean
Regional partner specialising in the Asia-Pacific region