Due Diligence and Integrity Check. Hong Kong & Mainland China
Situation:
During the bankruptcy proceedings of a major Russian company, the court-appointed insolvency administrator conducted an audit of the debtor’s transactions. Several suspicious payments totaling USD 3 million were identified, involving foreign counterparties based in China and Hong Kong.
CSI Group was engaged to perform an in-depth review of the financial and operational activities of the foreign counterparties.
Our Solution:
Our investigation identified three entities involved in the transactions. Physical inspections were carried out at the registered addresses of these companies in both Hong Kong and Mainland China.
Situation:
During the bankruptcy proceedings of a major Russian company, the court-appointed insolvency administrator conducted an audit of the debtor’s transactions. Several suspicious payments totaling USD 3 million were identified, involving foreign counterparties based in China and Hong Kong.
CSI Group was engaged to perform an in-depth review of the financial and operational activities of the foreign counterparties.
Our Solution:
Our investigation identified three entities involved in the transactions. Physical inspections were carried out at the registered addresses of these companies in both Hong Kong and Mainland China.
- The first company, based in Hong Kong, was registered at a known mass registration address. Furthermore, the nature of the business listed on its website was entirely unrelated to the transactions. Attempts to establish contact proved unsuccessful, indicating that the company was likely a shell entity.
- The second company, also in China, was an active legal entity involved in the export of sanitary equipment to many countries, including Russia. However, it had no history of supplying the type of equipment allegedly ordered by the bankrupt company. Corporate communication channels yielded no response, leading us to escalate the matter to local law enforcement agencies.
- The third company was part of a large corporate group with operations in Russia. Although it was a legitimate business, a comprehensive investigation – including staff interviews – revealed that none of the company's contacts were associated with the mail through which communication with the Client was conducted, and the bank account did not match the one provided.
Outcome:
As a result of our investigation, the insolvency administrator was able to secure the annulment of the fraudulent transactions in court, which contributed to the recovery of additional assets into the bankruptcy estate.
