Background check photo by Bicanski on Pixnio
Reasons for a Company Background Check
Clients often request our background check service when considering taking over or investing in another business.
However, depending on initial findings, the client may eventually require full investigative due diligence or enhanced services such as surveillance or a credit check.
Company Check Turnaround Time (TAT)
Usually, we can complete a small to medium-sized company background check within a few days. Even so, much will depend on two things.
Firstly, the breadth and accuracy of information the client gives us in the first instance. Clearly, if we get a company name only, we need to do more initial research than if we have full company details. Still, this is relatively quick unless there are multiple companies with the same English name. If the company has a Chinese name, it is timesaving to obtain the characters as soon as possible.
Secondly, and most importantly, it is the size of the company and number of key stakeholders that influences TAT. For instance, a supermarket chain with a BVI parent, uses a lot more resources and time than a sole proprietorship selling bread.
CASE STUDY: Enhanced Background Check
- WHO: UK steel component company
- WHAT: Suspicion that company is not legitimate
- WHY: Excessively large product range
- WHEN: Before deciding to invest
- WHERE: Investigations, surveillance and interviews in industrial estates in Kowloon and NT.
COMPANY CHECK
CASE STUDY: Hong Kong
Client Typical Verification Requests:
- Establish legitimacy of company, including address
- Are directors real people?
- Is it financially healthy?
This was an average case involving several locations in old industrial buildings in Hong Kong. The TAT was 1 week.
Background
A UK company, specializing in high quality steel components, approached Veriton to conduct a company background check because it was intending to invest in a Hong Kong company. It became suspicious when it realized that the target company was, apparently, manufacturing far more products than was physically possible at its given address.
The company asked for an enhanced background check including site visit and static surveillance. A credit check was optional depending on initial findings.
Initial Findings
Early research and first site visit indicated that the client’s suspicions were largely correct. Indeed, the company’s main office, in an old industrial building, was small.
However, internet research provided evidence of a long history and suggested the company had a good reputation.
As part of an enhanced background check, we agreed with the client it was a good idea to conduct surveillance.
Surveillance
Surveillance for two consecutive half-days was productive. On the evening of the first day, static surveillance identified a delivery vehicle that brought completed steel components to the main address.
The next morning, the surveillance team followed the lorry. It visited three old, small factory units where staff collected boxes of steel items. Of note, the company name was on display at each site visited.
According to staff, the target was also manufacturing in additional factory premises on other industrial estates. These were mostly in Kowloon and the New Territories.
Company Check Final Report
Finally, we prepared a detailed report for the client that contained witness statements, photographs, and copies of supporting documentation. The client was not only extremely pleased with the results but also TAT. In actual fact, they had expected that the case would take a lot longer. Given the findings, the client decided it did not need to conduct a credit check.
FASCINATING FACTS: Steel
According to the World Steel Organization, steel is not a single product! In 2021, there were over 3,500 types. And, even more astonishingly, 75% of these did not exist at the beginning of the 21st century.