Looking through the financial statements of a company for a solar rooftop portfolio we want to buy out. theres literally a car payment here with no rhyme or reason. Also, we have been only receiving documentation for their assets after we ask for them multiple times, they are very slow to add things to the data room which makes me think they are just bullshitting the documentation as we go, and really dont have the documents they claim to have. Their portfolio also just doesn't comply with a ton of relevant consumer laws in pretty much all material respects.
Basically it seems like a bullshit company. Has anyone seen some especially suspicious things while going through your diligence process?
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First time fund makes first or second investment in international consumer software company. Goes through full diligence including Big4 validation. Sends the wire, turns out the company doesn’t exist. Anchor LP pulls funding. Fundraising takes another couple years to course correct. True story.
How is this even possible...?
wtf how, what are the lawyers doing as well
You gotta explain how this happened. That's just insane. Truly not even believable. Clearly a considerable miss on the part of the Big4 company, lawyers, and the investment team.
They didn't do a single customer check? No bank check? This must have been a very low-tier fund with poor quality GPs to miss something like this. I'd normally have a hard time believing they went through a full Big 4 validation process to have this kind of result but then again, EY fell for Wirecard...
Yep. We found out management was running a check kiting scheme and multiple other schemes. Needless to say that deal went south.
Ignore title.
Three stories in and this thread is already gold. Thanks for making my Friday.
Was on a deal and we were about to start the QofE. Gave mgmt a heads up on the process and their feedback was that we will find fraudulent practices in their actg. Needless to say we walked away.
Looked at a target that had operations in 20 different countries, including many in the Middle East and SE Asia. Had no audited financial statements and what ever was provided did not even remotely line up with the scale of the business that the CEO boasted about in calls. On top of that, company had no tax returns, was like 3 years behind on tax filings, and the CEO would just tell us "I'll get to it eventually." In spite of that, when I pressed the principal on these points, he got defensive and told me to table any questions. I ended up leaving the firm while the deal was still being diligenced.
Did you ever look back to see if it got done?
Small add-on for a portfolio company, we ran what we thought would just be a quick confirmatory DD in-house. Turns out we found text book corruption and bribery system for a government contract in Africa.
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