Backgroundcheck service

Overseas transactions and investments often operate on the principle of “individuals over contracts,” with the greatest risk tied to individuals. Particularly in emerging markets, the company is often synonymous with its owner or proprietor, and the background, reputation, and past actions of executives frequently determine the business’s credibility. Furthermore, since management represents the primary risk factor, conducting background checks on owner is a practical and rational risk management measure.

１．Why background checks for owner are important？

（１） The credibility of owner directly impacts the credibility of the company.

In owner-managed companies and small-to-medium enterprises, the majority of funding, networks, and transactions depend on owner The owner’s reputation, business approach, and trustworthiness determine the company’s continuity.

（２） Detection of corruption, fraud, crime and political risk

Owners with the following suspicious characteristics should be avoided beforehand.

●Money Laundering
●Tax Evasion and Import/Export Fraud
●Involvement in Bribery and Corruption
●Ties to Antisocial Forces
●Connections to Politicians, Military, and Security Agencies

（３） Avoid owner with a history of repeated bankruptcies and defaults

●Previously caused the company to go bankrupt
●Had disputes with investors
●Defaulted on debts
●Was involved in numerous lawsuits

（４） Reputation Risk

Information from industry reputation and stakeholder feedback (e.g., late payments, launching multiple businesses in a short period, frequent lawsuits with employees or partners) may be more reliable than information from newspapers or magazines.

（５）Ensuring Governance and Compliance

The following verifications are essential for financial transactions and investments.

●AML（Anti Money Laundering）
●KYC（Know Your Customer）
●Sanction Screening（Sanctions Target Check）

（6）Reduce post-investment “business risks”

The success or failure of investment targets often hinges heavily on the capabilities of management (leadership, financial literacy, talent management, etc.). To grow corporate value, the quality of management is crucial.

（7）Risks at Exit (Recovery)

In investment and M&A, the management (including owner) team’s track record (success history) and understanding of exits such as sales or IPOs are crucial. Furthermore, if owner has been involved in legal troubles, anti-social forces, or sanctions, it may become impossible to execute an exit.

２．What items should be verified during a background check? (Items (2) and (4) include items that cannot be verified or require significant costs.)

（１）Professional History

●Verification of educational and employment history
●Past companies and bankruptcy history
●Industry experience

（２）Reputation

●Peer and Client Feedback
●Turnover Rate of Empolyees
●Industry Reputation

（３）Legal and Financial Risk

●Litigation, bankruptcy, or default history
●Tax-related issues
●Sanctions list or Politically Exposed Person (PEP) status

（４）Political and Anti-Social Risks

●Relationships with politicians and the military
●Relationships with antisocial forces
●Presence of corruption risks

Amon recommends conducting background checks through the following partners in each country.

・India

Supersoft Consultants Private Limited　
https://www.supersoftindia.com/