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Due Diligence - Case History
Case (a)
A potential backer looking to invest in an Italian businessman received excellent references on the individual, highlighting his integrity, financial prowess and reputation. The references proved to be genuine, however, after researching his background in more depth and obtaining independent references, a fuller picture emerged. One referee described the businessman as a 'fraudster' and another stated he would 'not touch him with a ten foot pole'.
Case (b)
The CEO of a retail company had a proven track record of enthusiasm and strong entrepreneurial skills. A well known venture capital firm hoping to back the entrepreneur discovered that although the individual was successful in gaining new business, his accounting ability was poor. The deal went ahead successfully only when a strong Finance Director was put in place.
Case (c)
A client in pursuit of a take-over, retained specialists to carry out thorough due diligence into a management team. It appeared that the Chief Executive had abused his power and had employed family members and close friends who were less than qualified for their positions. The take-over went ahead and, on OVAG's recommendations, a totally new management team was put in place. |
