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Identifying sources of wealth and business interests helps ensure the legality of the money or assets involved. If these two things match up with each other, well and good. But if not, then this indicates income from a probably illegal source.
Going on a business venture with such a party can cause you more harm than gain. Selecting a directorship search can help avoid incompatible people or conflicts of interest. Shareholding searches are also crucial for the same reason.
In case the person is involved in your competitor’s company and holds shares of the same, you generally would like to avoid involving that person in your own company.
Due diligence is vital for investors to identify and verify information. It might help them to consider potential defects or conflicts of interest. Otherwise, ensure that the deal or investment opportunity complies with the law and regulatory conditions. It might save you from possible financial harm and tainting your company’s reputation.
Finding net worth, company associations, and doing proper shareholding research are especially important now as anti-money laundering (AML) laws and regulations are becoming more and more stringent.
Mainland china has updated its monetary threshold for executing disciplinary penalties. Whereas Singapore has set up a dedicated team for AML monitoring. Similarly, Thailand, South Korea, and Hong Kong are planning harsh punishment for such cases.
Now, would you like to take a blind leap of confidence? Or, be prepared before going into a business venture with any big customer or company.
Having privileged banking customers, business deals, company mergers, and ventures is not child’s play. A huge amount of money is at stake most of the time.
Ignorance of correctly identifying the source of wealth and business interests before third-party involvement could give rise to severe implications. Not only money, but such frauds can also raise questions about the reputation and creditability of the organization too. Just look through one of many examples:
In today’s time, we cannot ignore the prevalence of financial crimes. It has become a trending, multi-billion-dollar experiment with advanced criminal tactics. Financial crimes include theft, money laundering, fraud, tax evasion, mismatch of the source of wealth and business interests, and many more.
We cannot give justification for the scam of 1MDB in Malaysia (a government investment company – 1Malaysia Development Bhd). Of $8 billion raised by 1MDB, $4.5 billion dollar was embezzled to shell companies. This is just an example of government corruption.
Industry heavyweights such as China’s top Suntech power holding’s venture with US first solar is the best example of a deal gone wrong. So much so that Solyndra is looking at options such as selling the business. Its total disclosed funding is $1.22 billion.
There are many more incidents where companies committed fraud worth billions of dollars. Financial institutions are the favorite target of such frauds. Once billions of dollars are presented to these establishments, due diligence is packed and thrown in the dustbin.
All this could be prevented by the companies by investing a little in due diligence. Spotting the routes of income and business positions before making a deal can prevent a lot of harm. Be it wealth, time, reputation, integrity, or health.
Nobody can deny that the world is going online. The times are gone when, after graduation, students used to look for a job. Now is the era of startups. Every other individual is nurturing a new, unique (at least in one’s mind) startup idea. However, converting that idea into a business demands sheer hard work and wealthy investors. Only a few can venture their idea into a profitable business even after everything.
Otherwise, these startups and even big companies can take ‘fake it till you make it’ a bit too far. Either the startup soars or makes it. Or, in most cases, it is bought by big firms or companies.
Moreover, in the banking sector, most banks face the dilemma of conducting a thorough background check on their customers. Since they are bankers, not investigators, they are easily deceived by cunning customers.
Going for proper scrutiny of customers to identify the source of wealth, business position, and business interest can help to verify the legality of their assets. Many times, the illegal activity could be identified simply by due diligence. This prevents the sabotage of the image and reputation of the institution. A little investment in due diligence extends to ample help for your pristine status.
But, it is said that prevention is better than cure. You can prevent these financial crimes from happening in your company or financial institution, like a bank. Always keep in mind that understanding the background of potential customers or business partners is a must before onboarding with them. This includes investigating their source of income and conducting directorship checks to avoid conflicts of interest.
We, Moxe Consulting, provide a proper and comprehensive analysis to the client regarding the case under scrutiny. The link between the source of wealth and business interests is examined and dissected accurately. Due diligence is all about depth and range.
We go to extreme lengths to give you detailed information, from social media reviews to the media’s adverse news monitoring and screening. From company and registry search to ultimate beneficial owner & financial search. Our global capacity covers Asia-Pacific countries.
We share a close network with enforcement agencies, financial regulators, and clients. Save yourself from the hassle of painstaking financial crime. Let us make things easier for you.
