Case Study – South East Asia
A US financial services company was planning to pursue a joint venture with a renewable energy company in South East Asia. The renewable energy company would source potential investments on its behalf and had several deals ready to be jointly developed. The company’s General Counsel was concerned as the company operated in the power generation sector which was closely connected to the country’s Ministry of Energy.
Billiter worked with the General Council and the bank’s renewable energy team to deliver due diligence research specific to the country and the relationship they planned to pursue with the company. An FCPA due diligence investigation was undertaken on the prospective joint venture partner which sought to identify any potential FCPA issues. It examined the company’s track record and historic connection to State owned power generation companies and the country’s energy and environmental regulators and sought to identify any allegations or indications of improper payments.
Very quickly, the investigation found little evidence that the company had any significant operations. It had previously worked on only two projects which had been developed by one local businessman who was indicated to be close to government. He had also previously been the subject of corruption allegations made by a local NGO relating to the privatisation of State assets. Local sources also identified one of company’s shareholders to be close family members of a high level executive at the State owned electricity company.
The FCPA risk profile of the prospective joint venture partner was deemed to be too high and the client chose not to pursue a commercial relationship.