Easy Business Relationship Checks

Is it essential to conduct due diligence background checks?

Well, for starters, if we are to go by the analysis of the recent cases such as  Goldenscape Greenhouses and Ekeza sacco scandals; where investors are said to have lost millions in Kes of their life savings and loans borrowed to an investment that ended up at the gates DCI Kenya.

Clearly, there is a need to gain some knowledge and understanding by conducting due diligence before one is to venture in any investments. What’s more, you can be sure, with the creativity of Kenyans, more scams will be coming in the near future.

Secondly, from the experiences shared by the investors who lost their money, one key characteristic stood out, neither of the investors had taken their time to research the location of the company or to do a site visit of where the land and green houses were said to be, even just out of curiosity, and just to  be certain they existed in the first place.

Most of them had simply trusted the wave and the thirst to get their hands on the high returns within a short period had blinded them into assuming the obvious red flags.

Easy Business Relationship Checks

  • aggressive advertising on TV and social media
  • promise of ultimately getting high returns within a short span of time
  • Companies run more like a one man’s show are key indicators’ that something could be amiss.

Also, any long investor or business person in this modern economy knows too well , before they inject any capital into any investment , they have to investigate the market, ask around on how previous or similar investments have performed or are performing , if the investment will lead to the growth of the economy as this will ensure they get high returns and lower the risk of losing their initial capital. They are also well aware that high risk and where the investment return period is more than one year, they stand to gain more.

Simply put, to do due diligence is to do research be it for a potential investment, business, partnership, merger, supplier and or when loan lending, to ascertain the legitimacy, existence, accuracy and value of the investment. In other words, due diligence is the care taken by an individual or company before committing to an agreement or venture.

While, due diligence background checks, involves more of the processes, procedure or steps taken to further verify the credibility of the individual or company one is to transact with be it locally or internationally.

Due diligence background checks are also carried out as regulatory requirement, reputational purposes and where either of the parties transacting would have been adversely mentioned in media.

Private Investigations With Ease
In this regard, to effectively conduct due diligence background checks, CFE. Judy Ratanya advices one to apply the below simple techniques:
  1. Google search – You will be surprised by how much a simple google search and social media search which can be done at the comfort of your home, at work or in traffic, can help you gather information regarding an individual or company. From the company’s website, one can tell the location of the company, physical address, how long the company has been in existent, who they mainly trade with and even google reviews. While for an individual, social media channels such as Facebook, twitter and LinkedIn can give a snapshot of an individual.

This way, you will derive some comfort that the individual or company you be investing with are legit and to some extent the risk involved with the investment will be lower as well as the chances of financial loss.

  1. Hire an expert such as professional investigator (this could be an individual or company), which is a safer option – involving the expertise and specialized advise never goes wrong, yes you may have to part with a few coins for the consultancy services offered, but you can create a rapport with the expert and bargain your way out.

As a matter of fact, we all like listening to the professionals and we value their opinions. Sometimes we may not agree or be happy with what they have to say but we go ahead and action on what that Lawyer, Accountant, Financial Advisor, Banker or Realtor says. So then why not take that shot, go for that expert in the field of due diligence background checks who can customized your needs, be it before you hire an employee, you sign that merger agreement, you give out that loan or you cash in that new business. Trust me you will forever be grateful and smile your way to banking in your investments return.

  1. Use the respective registration body to check if a company is registered or regulated– where companies registered with regulatory bodies such as Capital Market Authority, Sacco Societies Regulatory Authority and Central Bank of Kenya, it becomes easier to transact with them , with these companies there is some form of protection and assurance that one will be able to get their money bank should something go wrong.