From 2010 onwards, there was a strong, upward trend for Chinese companies to list on non-domestic stock exchanges—be it in Hong Kong, UK or USA. If you are an IPO lawyer needing quick and thorough pre-IPO research for Chinese companies, it is essential that you are comfortable:
These are fundamental skills that we have developed on a daily basis since the foundation of Veriton Investigations. We have assisted in numerous IPO research projects.
If you are an IPO lawyer, we can help you too. Contact us now for more information.
2-week TAT
A Hong Kong law firm, and former Veriton client, needed additional resources to prepare an Initial Public Offering (IPO) for a Beijing engineering company that hoped to list on the Hong Kong Stock Exchange.
First, our client asked us to conduct non-financial, investigative due diligence on 17 companies within the Beijing transport manufacturing and engineering sector. The subjects were either customers or suppliers.
Later, we received a spreadsheet with basic company data. This included management and shareholders for 14 of the larger entities. However, three were not fully identified.
Our goal was to find and document negative news relating to the 17 companies and their key personnel.
Although full due diligence was not requested, our client asked us to include ‘red flag’ issues such as :
The client also wanted us to document State-owned Enterprises (SOEs) for the record. In this particular case, SOE involvement was not a red flag. The Beijing company had been partly owned by an SOE. However, the lawyer wanted a clearer picture of the company network structure.
The project followed our standard methodology. TAT was challenging at just under 2 weeks. Several of the companies for the IPO research project were large companies with hundreds of employees and multiple branches. Much of the research required proprietary databases.
If you would like us to assist with pre IPO checks, it’s helpful for both parties if you complete a short form outlining your research requirements.
The first day was spent verifying the identities of the three problematic companies. We also checked that the remaining 14 had been correctly documented. One had not been. This is not unusual when dealing with Chinese companies as names tend to be long and name changes are subtle.
We discussed findings with client over the next 48hrs. The client also had very specific requirements for reporting formats. We developed these with the client and later ran a test report for confirmation.
Over the following week, our research team entered all English and Chinese data into an in-house database. We designed this several years ago for due diligence purposes. It now functions well and is tweaked to reflect each project’s reporting requirements.
A supervisor constantly checked the database to both ensure integrity of data and spot any omissions.
There were a few red flag issues that emerged from the IPO research. Notably, a former director of several of the companies had recently been jailed for corruption and related offences.
Another two of the companies had been fined repeatedly by local government for failing to comply with both health and safety regulations as well as annual company filings.
Veriton Investigations was co-founded in 2014 by an ex-Hong Kong police officer and a research/ communications professional. They recognized a need in the private investigator industry to combine high quality reporting and analysis with discreet, feet-on-the-ground investigations and surveillance.
Veriton Investigations is a brand of the Veriton Asia Group. We offer a comprehensive portfolio of research and investigations services from full reputational due diligence and surveillance to China company checks, executive screening and process serves.
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Established in 2014 as part of the Veriton Asia Group, Veriton Investigations provides international clients with professional investigative and research services in Hong Kong, Macau, China and other parts of SE Asia.
Confidentiality and discretion are guaranteed.
Established in 2014 as part of the Veriton Asia Group, Veriton Investigations provides international clients with professional investigative and research services in Hong Kong, Macau, China and other parts of SE Asia.
Confidentiality and discretion are guaranteed.
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