Modern Due Diligence: Is Corporate Intelligence a Murky World?

A recent Financial Times report describes the private intelligence industry as being a “murky world” and “shadowy sector” full of mystique, intrigue and secrecy. In the article, this view is juxtaposed by an M&A lawyer’s statement that he sometimes receives just “a page of Googling” from intelligence providers. So which is it?

Does due diligence today require investigators to lurk about in the shadows operating in a covert manner, and is information really as easy to obtain as simply conducting a Google search?

The reality is that good intelligence today requires a wide range of skills, and the techniques used have evolved a great deal over the past twenty or so years, particularly in Asia, given the expanding availability of information through the internet. Focusing on the provision of due diligence services, this article is designed to shed some light on modern techniques used to gather information, and to dispel some of the myths that surround the industry.

By now reputational due diligence in Asia is widely understood and accepted as being a necessary part of significant transactions. Close examination of counterparties is extremely important, especially given the extent to which private and state interests are often intertwined in Asian companies.