Conducting due diligence on a Chinese “middleman” company
Nardello & Co. was tasked by a private equity firm to conduct due diligence on a Chinese “middleman” company that had introduced the client to a potential investment target, for which it would be paid a large finder’s fee. We found that the subject had an extremely low media profile, and its webpage was suspiciously vague about many details of its principals’ pasts and the company’s own business activities. Archived versions of the same webpage from nearly ten years earlier revealed that the company’s site had once featured much more detailed biographies of its principals, and also provided contact information such as mobile phone numbers. This gave us the toehold we needed to conduct further research to establish a timeline of the company’s history and some of the past investments in which it had been involved. We found that both of the company’s key principals had sought to hide unfavorable connections, including a partnership with a Chinese businessman who was awaiting trial for money laundering and human trafficking.