Due diligence

Due diligence is undertaken as part of M&A advisory work.

With Due Diligence making for you or your clients we are capable of establishing certain facts about a company or property in Russia in which you have interest. The process is also aimed at uncovering “hidden defects” in the legal status of such company or property. The experience includes both banking and non-banking sector clients, national and international, provided with tailored solutions in accordance with a service level agreement covering financial, legal, tax and IP/IT due diligence.

You, as a buyer, may or may not prepare for the seller a “wish” list (a due diligence request list, specifically identifying the documents which the buyer wants to review.) Alternatively, the buyer might request that the seller produce all documents and information relevant to the business, legal, and financial aspects of the target business. Or, the buyer and seller may agree which documents and materials are to be produced in a side letter, which will specifically identify the documents to be produced by the seller for the buyer’s review. Finally, the buyer may make specific requests for documents in those areas previously identified as problem areas of the seller.

In Russia in particular, when carrying out due diligence exercises, it is frequently difficult to achieve the balance between, on the one hand, giving the client a clear assessment of risk and, on the other, putting the due diligence reviewer in a vulnerable position. Clients always appreciate guidance as to the significance of any particular matter, the likelihood of that risk turning into a liability and, if so, the quantification of that liability.

It is possible to achieve that balance by giving the client an honest assessment of the relevant risk but at the same time making it clear that the reviewers judgment is based only on the documents reviewed and is subject to such other factors as may be specified.

Commercial due diligence is an equally important aspect of business for foreign companies seeking to penetrate into the Russian market.