Who really are the shareholders of that company in Mexico or Colombia which wants to open an account at your bank—are they just those individuals who the firm’s CEO has stipulated they are on your background check form? Or has a key partner who is politically-exposed person been omitted from the list?
Is that entrepreneur from Chile or Venezuela who has proposed a promising joint venture with you being truthful when he says he has a flawless litigation and regulatory record? Or does he, in fact, have a past littered with judgments and regulatory resolutions against him?
Is that purported high-net-worth businesswoman from Peru or Panama being honest with you when she claims to own a string of properties, equity investments and offshore assets? Or is it the case that she only has a small, mortgaged apartment?
When individuals and companies from Latin America approach unsuspecting counter-parties abroad, their credentials may initially appear impeccable and sincere.
But first impressions can be deceptive: hidden interests, undeclared litigation records and downright dishonesty turn out to be the case surprisingly frequently.
Meticulous searches of public records
To mitigate such risks, businesses need to carry out thorough due diligence to fully identify the backgrounds and the connections of potential partners, suppliers and representatives before embarking on an acquisition or sealing a contractual relationship.
We regularly provide clients with meticulous searches of public records—either within a single country or across multiple jurisdictions in Latin America—to allow them to establish the real ownership of an entity, identify the existence and gravity of any litigation interest, or the true magnitude of an individual’s supposed wealth.
Often, to provide clients with an additional layer of security, we enhance what’s obtainable on an individual or a company from public records with non-public intelligence to discover any law enforcement interest or criminal links.
Searching for red flags on a Dominican business partner
A US investor considering a partner for a real estate project in the Dominican Republic commissioned us to undertake a due diligence on a business group based in Santo Domingo to check for any red flags. Latin iQ trawled through an exhaustive range of public records and discovered that one of the local company’s principals had a close kinship tie to a senior official in the Dominican judiciary.
Country: Dominican Republic
Client: US investor
Establishing a car dealer’s government ties in Ecuador
A Spanish finance company needed to carry out due diligence on a vehicle distributor in Quito, with a particular interest in clarifying to what extent it did business with the government. Latin iQ identified the Ecuadorean company’s shareholders—one of whom was related to a former minister. We also discovered that all of the company’s sales were accounted for by three government agencies, and that these sales consisted entirely of direct purchase orders.
Client: Spanish finance company
Detailing the backgrounds of two Chilean defence firms
A European defence contractor required a complete due diligence on two companies who could act as representatives in Chile. Latin iQ was able to report to the client that one of the directors of the first firm was linked via an offshore entity to a competitor in the defence sector, and that while the second candidate company had superior connections in the military, two of its principals—former army officers—were being investigated for their alleged involvement in past human rights abuses.