Background: Orchid’s investigation on business partners, active diligence on claims of development status and projects assets led clients to evaluate realistic outcomes of investment and entering into purchase agreements.
Sample Assignments: 360° Due Diligence
Scope of Work A:
- Investigated the management team of the development company seeking to sell two greenfield power projects to SK E&C and alleged development status of projects
- Uncovered legal problems between management team and equity fund investors’ allegations of embezzlement, litigation
- Performed documentary due diligence of project contracts; questions arose about incomplete records and misleading statements made by management team
- Identified gaps in corporate records and investor information; high risks not possible to mitigate
- Client decided not to go forward with acquisition and projects were never built
- Principles of management team found guilty of embezzlement
Scope of Work B:
- Orchid evaluated USA petrochemical project for private petrochemical trading company in China for equity investment and long term offtake
- Orchid investigated Board of Directors claims of energy experience and found serious misleading claims affecting reliability and credibility
- Orchid attended international conference in China for client and observed major inaccurate statements made by USA company about project status and feedstock supply
- Discovered several concerns relating to the management team, investors, funding sources; issues that would be a fatal problem for Chinese company under USA federal and state laws
- Client did not go forward with investment or offtake discussions based on risk of fraud and project would not be completed