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Due Diligence in China + Website: Beyond the Checklists by Kwek Ping Yong

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Chapter 6

Beyond the Checklists: Hard Facts

After an extensive check of beyond-the-checklist items on the founder and management, the due diligence team will have to look into other tools to verify and supplement the information collected as well as those from conventional due diligence. Questions regarding the company’s financial health, operational model, supplier and customer reliability, corruption risks, and even the founder’s reputability can all be reliably answered via employment of these tools.

This chapter is named as it is because the following tools and methodologies discussed are aimed at uncovering information (facts) that are difficult (hard) to retrieve based on a conventional due diligence approach. Hard here would also refer to having a healthy level of skepticism toward information obtained in other sources, and hence the need for these tools and methodologies to validate and confirm this information.

FACE-TO-FACE MEETINGS

One of the most important tools of the due diligence process is to schedule face-to-face meetings with various groups of people that have material impact or knowledge on the company, founder, or the deal (Figure 6.1). With a beyond-the-checklist approach to due diligence in China, the face-to-face meeting takes an even greater role in obtaining information that is not available in statements and books. In general, the people to meet can include:

  • Clients
  • Suppliers
  • Bankers
  • Tax bureau
  • Government officials
  • Former employees
  • Competitors
  • Others (e.g., ...

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