Financial Risk & Due Dilligence

We provide

VEROCY with its wide range of financial experts, all ex- Top-5 accountancy/ consultancies, provide the needed insights, vetting information and reporting. With our vast amount of experience in the EMEA region and the Defense, Security, Oil & Gas, Water, Infrastructure sectors can also provide the right way of entering into a region or country.

We are involved in a wide-range of M&A projects, focusing on the take-over or management buy-out of several major oil, gas and security related companies in the EMEA region, particularly for private-equity or SWF’s related investments.

Dealing with the oil, gas and defense sectors globally, confronts investors, operators and governments with a wide range of financial risks. The complexities of relationships between defense/security and oil and gas companies with third parties worldwide make compliance with antibribery and other anti-corruption regulations more challenging. As stated in the “Resource Guide to the U.S. Foreign Corrupt Practices Act published by the U.S. Department of Justice (DOJ)”, “Comprehensive due diligence demonstrates a genuine commitment to uncovering and preventing FCPA violations.”

For most companies and financial institutions targeting operations and investments in the EMEA oil and gas sectors, especially in emerging markets, the need to deal with state-owned organizations or private parties includes a wide range of due diligence efforts. Whether wholly- or partially-owned, these organizations drive up risks, not only bribery or fraud, but also financial instability, diffuse financial relations and ownership arrangements and legal frameworks.

Outside of most Western countries, companies and investors need to frequently interact with government officials on local, regional and state levels, which can expose the first to many situations where questionable practices—demanding cash payments to obtain border entry for equipment or securing work permits for employees, for example—could be a fact of life.
The lack of political instability, infrastructure and regulatory environments will be a major challenge to all. Not only oil, gas and energy related companies but especially defense and security operators, suppliers and consultants, are facing these challenges increasingly. Many of these emerging markets are at high risk of conflict, and the high value attached to defense and energy sectors increases the overall risk levels.

At the same time, in most of the MENA-African regions, third party investors (from outside of MENA-Africa) and companies will need to deal with the fact that most contracts are set up with local parties to operate on their behalf in these countries. Under US-European laws, Western companies can be held responsible for any illegal or malpractices of the local party if it ultimately leads to a business advantage for the contracting company. These issues need to be taken into account in all project discussions and operational environments.

Due diligence is needed, whether it is vetting potential customers, partners, third-party suppliers or contractors, a rigid and robust due-diligence process is needed to mitigate risk.