Tuesday 16 December 2014




The holiday season means lots of travelling, visiting giving and receiving of gifts, partying, and displaying of wealth and affluence. Although it is a really festive way to celebrate the season, there are ample reasons to protect your life and other assets against violent crime.

Violent Crime Defined

A violent crime is a crime in which an offender uses or threatens force upon a victim. It refers to a crime where intentional harm is inflicted against another individual during the commission of the crime. The inflicting of harm can as well include the use of weapons, poison, bodily contact, etc.

Types of Violent Crimes

Violent crimes appear to be a permanent feature of Nigeria society. The news is full of stories about people who have been murdered, abducted, robbed, raped, mugged, or otherwise assaulted. The truth is that there are many types of violent crimes in Nigeria and the frequency of commission is on the increase. These crimes include but not limited to:

a.        Terrorism

b.      Murder

c.       Manslaughter

d.      Robbery

e.       Rape

f.       Gang Violence

g.      Domestic Violence

h.      Cultism

i.        Kidnapping

j.        Assault

k.      Battery, etc.

Terrorists groups, cult gangs, ethnic militias, disgruntled elements, and other organized criminal groups are daily emerging across the country, and are frequently cashing into the nation’s weak socio-political environment to unleash mayhem on law abiding citizens and residents.

Despite the well-meaning efforts of social workers, security and law enforcement personnel, and criminal rehabilitation professionals, the situation is fast deteriorating. Residents of big cities, small towns and villages, and people of all ages, religions, tribes, and race are not spared. These shocking and vicious crimes that occur almost on daily basis are assuming alarming proportion. To worsen the situation, women, mothers, the child first influencer, are now occupying the driving seat of violent crimes in Nigeria. Women have proved beyond reasonable doubt that they are more brutal, heartless organized criminal group leaders, suicide bombers, cultists, and you name it. The use of female suicide bombers as a new development in violent crime commission in Nigeria has raised more questions than answers. The link between rising cases of female suicide bombers and the abducted Chibok Schoolgirls should provoke empirical researches (irrespective of the perceived costs) where people value their security and safety above trivial things. Instead, Nigerians are busy blaming each other for failure of the security apparatus, and at the same time sabotaging every effort by government to contain the menace. I have been wondering, even aloud, whether Nigerians have all forgotten that security is everybody’s business. The failure of any national security is the failure of that nation and its people. Nigeria and Nigerians have failed security-wise. Security failure or insecurity has no eyes, knows no political affiliation, religious belief, ethnic attachment, social status, age bracket or colour of skin. The more we individually wait to become President to contribute meaningfully towards building a strong and viable Nigeria the more Nigeria will continue to drift down the abyss. And by that thinking and acting, it will take Nigeria over 175 million years to get out of the woods, based on our current population.

The security situation in Nigeria has degenerated to the extent that Nigerians and residents are being urged to take charge of their personal security. Then, what happens to our collective freedom which we submit to the government in exchange for security, you wonder? In battling to answer this question many Nigerians have ignored personal security to their own peril.

Factors Promoting Violent Crimes in Nigeria

There are a host of factors and circumstances that persistently contribute to violent crimes in Nigeria. Few among are:

a.      Family Breakdown

Evidence suggest that majority of people who commit violent crimes come from broken families. They are mostly children who lack parental care and love. According to Marianito Panganiban, “There is a breakdown of people’s moral fiber in the sense that they have no guidance and then they go astray”.  Poor family relationships and violent family backgrounds are common among aggressive criminals. A known cultist who was fingered in several robbery and murder cases in Eleme boldly told an assembly of traditional rulers, chiefs and elders, opinion leaders, women, and youths, who gathered at the town-square, when asked to show remorse and apologize for various allegations against him, “I am a cultist, no doubt. I am not an ordinary cultist. I am a leader that you all know. I am proud to be a renowned cultist. I have killed severally. No regrets. I will continue to kill till I die. I enjoy seeing my victim die. I am a child of a disorganized home. Please, do not misunderstand me. I am not appealing to your conscience nor do I intend to feel remorse. Just listen; my father disowned me at a very tender age. You all know. You all are also aware that my mother abandoned me as a child, even though she died mysteriously too. I am a very good example of a child who lacks parental care and love. I am not afraid to die. It is cowards that do regret their actions and weaklings that show remorse at every occurrence”. After these words, the young man stepped out of the town-square proudly, accompanied by his group members. 

Other factors responsible for rising cases of violent crimes include:

i.                    A turbulent parent-child relationship;

ii.                  Parents who are unable to recognize problems in their children;

iii.                Lack of closeness

iv.                Parents who set few or no limits on a child’s conduct; and

v.                  Children who are extremely private, leading a double life and thus hiding a part of their life from their parents.

Today, many Nigerian children are victims of family break-up. Others have parents who have little or no time for them. Many others have grown up with inadequate moral and family guidance thus making it easier for them to commit crimes against fellow humans without remorse.

b.      Hatred

Violent crime can also be ignited and fueled by hatred. Those who harbour such hatred live in a world that is coloured by bigotry, shaded by conspiracy, and framed by ignorance. In Nigeria, for instance, terms such as “catchments area”, “quota system”, “state of origin”, “disadvantaged state”, “host community” and so on were fallouts and products of ethnic polarity propagated by the military and their civilian-political collaborators. This altered our psychic, slow down and affected the growth and development of the country, bred hatred, and led to various ethnic, tribal and religious crises, civil disturbances, intolerance, and ideological war like the one being waged by Boko Haram and others being orchestrated by hatred. Regrettable, the pockets of skirmishes and strife had culminated in massive looting, destruction of lives and property, and greatly affected the unity of the country and undermine the socio-economic advancement of Nigeria.

c.       Dangerous Cult

Cults have a strong influence in the commission of violent crimes. Young men and women have been variously influenced to commit murder, rape, robbery, etc. so as to gain membership in certain cult group or to earn a promotion. Others have been urged into offending in order to go to heaven. The disturbances in Kano from December 18 to 29, 1980 in which 4,177 people were killed; 1,652 families displaced and the economic life of Kano City completely paralyzed masterminded by Maitatsine alias Muhammadu Marwa was a case of dangerous cult. His followers who believed that he could guarantee them automatic entrance and eternity in Paradise wee cult inspired. The death in Switzerland, Canada, and France of 69 members of The Solar Temple was cult motivated. If not cult propelled, what do you say is the primary factor behind the rising numbers of Boko Haram’s female suicide bombers? A mention of the 2011 religiously motivated post election crises in parts of northern Nigeria in which many people died and properties worth millions of Naira destroyed is another example. These examples illustrate the fearful influence that certain groups and individuals have had on the thinking of some people. Charismatic leaders have got people to do the “absurd” by tempting them with some supposed benefits.  

d.      Violence in Entertainment

 Regular exposure to violence depicted on television, in movies, in video games, and on the Internet desensitizes the conscience and promotes various types of violent crimes in actual life. It has also been proved that “repeated exposure to entertainment violence in all its forms has significant public health implications”, said Dr. Daniel Borenstein, President of American Psychiatric Association.  In other words, repeated exposure to movies, video games, Internet, etc. that glorify violence and killing can inspire aggressive behaviour.

e.      Exposure to Live Violence

Exposures to actual violence promote aggressiveness.  Children who grow up in an aggressive environment tend to be more incline to hostile lifestyle. Parents who quarrel and fight frequently before their children are setting dangerous precedent for those children. Such children grow up to be hostile, apprehensively rough, secluded, easily provoked and always on the defensive; and above all, sad and angry, even when not provoked. Aggressive environment also results in children’s not developing the ability to bond well with others, thereby making it easier for them to commit crimes against others without regret.

f.        Drug Abuse

Drugs are present in an exceedingly high numbers of homicide and other violent crimes. Some people, whose thinking is warped by drug, use to kill while under the influence. Others defend their drugs and human trafficking by using violence and intimidation.

g.      Access to Weapons

Easy access to destructive weapons is another factor in the rise of cases of violent crimes in Nigeria.

h.      Inability to Cope with Problems

When hearing of certain heinous acts, some may react by saying, “That person must be crazy”. However, not all individuals committing such crimes are mentally deranged. Many, though, do have difficulties in coping with life. Personality defects may lead to extreme acts. These include:                     

a.                   Learning and social deficiencies:

b.                  Negative effects of physical or sexual abuse;

c.                   Anti social characteristics;

d.                  Hatred of a certain group or culture or religion;

e.                   Lack of remorse when doing wrong; and

f.                   A desire to manipulate others.

What their problem is, some become so consumed by their difficulty that their thinking is altered, and this can lead them to commit strange acts. For example, in 2005, 30 year old Pastor Ambrose beheaded his only child for money ritual. On his way to the native doctor’s house, he was arrested by the police with the skull. He pleaded that his inability to cope with 17 years poverty led him into committing the heinous act.

i.        Mental Illness

Researches have revealed that certain mental illness can affect the thinking of the sufferers and this can lead them into committing senseless crimes that are not normal. According the FBI, “Homicide is not the act of sober, sane, individuals”.  Something is believed to have affected their reasoning or altered their mind to the point that they will do the outrageous.

Other factors that also contribute to violent crimes in Nigeria include oppression, frustration, and injustice.

Dos and Don’ts of Personal Security during Festive Season

Before now individuals exercise their unrestricted freedom and provided their own security until communities bound together and they surrendered their freedom to the government to supply the needed security for a fee called tax. Unfortunately, governments all over the world have oppressively keep their people’s freedom in captivity and are continually collecting taxes from the people with little or no efforts made to provide real security. No doubt, the powers of our government is limited, no matter how noble their efforts to provide security. They do not have the power and the resources to root out the causes of crimes or provide a stable and secured environment.

As you read this article, bear in mind that violent crimes is fast turning Nigeria into a totally strange and dangerous country where we cannot predict what is going to happen the next day. Therefore as you celebrate this festive season:

1.      Be alert to your surroundings, and trust your instinct whenever you feel uneasy.

2.      Do not walk or jog very early in the morning or late at night alone.

3.      When out at night, try to have a friend walk with you.

4.      When watching television or listening to the radio or entertaining guests, especially at night, make sure all windows and doors are properly locked.

5.      While travelling by public vehicle avoid one chance vehicle outside designated Motor Park.

6.      Do not display your cash, cell phones, jewelries, flash car and other inviting targets.

7.      If you think someone is following you, switch direction or cross the street. If the person continues to follow you, move quickly toward an open store, restaurant or a lighted house. Do not be ashamed or afraid to yell or shout for help.

8.      Try to your park car in well-lighted areas with good visibility and close to walkways, stores, and people.

9.      Always lock your car, even if it is in your own driveway.

10.  Do everything you can to keep a stranger from getting into your car or to keep a stranger from forcing you into his/her car.

11.  If a dating partner has abused you, do not meet him or her alone. Do not let him/her into your home or car when you are alone.

12.  If you are a battered spouse, call the police immediately. Assault is a crime whether committed by a stranger, or your spouse or any other family member. If you believe that your children are in danger, call emergency hotline or the police and leave immediately.

13.  If someone tries to rob you, give up your property; do not give up your life instead.

14.  If you are robbed or assaulted, report the crime to the police. Try to describe the attacker accurately. Your actions can help prevent someone else from becoming a victim.

All well said and done, I must state here that the first and chief security officer in individual’s endeavour is the individual himself. The higher you go in life, the more vulnerable you become. But the more security consciousness you acquire, the less victim you become. Therefore, make security a daily affairs; it prolongs life and sustains assets. Your security is your life!


Business Intelligence

Business Intelligence




Before delving into business intelligence, let us examining briefly the basic roles of security in business.

Security Primary Function in an Enterprise

Security Primary functions in a business enterprise are: assets protection, crime prevention and loss prevention. While protection guarantees effective interface between assets and the environment to generate wealth, ensure growth and development, loss prevention safeguards organizational assets. In other words security is a prerequisite for business profitability and is calculated using the following formula: P+LP = BP. Where: P       = Protection; LP     = Loss Prevention; and BP = Business Profit.


Protection is one major function of security. There will be no such thing as security if protection is not mentioned. We have known from the beginning that our responsibilities are how to reduce or eliminate the opportunities for crime or loss that affects business assets (both tangible and intangible).


And so we must have a good grasp of the business and culture of the organization, that is organizational behaviour as well as the environmental circumstances or prevalence that will necessitate business profit. It is absolutely important for security professionals, consultants or managers to realize that skills and competencies are essential to active protection and those measurable effective responses to the modern threat environment are far more critical than ever before.

Although, the diversity of today’s risk comes in a complex matrix of interrelated threats, vulnerabilities, and impacts, safeguards for which must therefore be interdependent. The ability to influence business strategy and address matters of internal risk exposure requires a security chief at the appropriate level in the organization. This should be achieved through the restructuring and focusing of current efforts through this single senior management function. The interaction with senior executives and board members means that the security challenges concerning the proposals and recommendations can be presented. The protective functions of security consist mainly of strategy development, information gathering and risk assessment; organizational preparedness; securing people, core business, information, and reputation; incident responses, management, and recovering; and investors relations, public affairs, and government relations coordination among others.

a.         Strategy Development

A key responsibility of the security manger is to develop and implement a strategy that demonstrates the process in understanding the nature and probability of catastrophic and significant security risk events. This involves:


Ø  Outlining in detail the plans to prevent and prepare for an adverse event, including state-of-the-art awareness, training, exercises, and methodologies to include contemporary security programmes and process throughout the organization.

Ø  Continuity of business operations from a security-related attack or catastrophic event.

Ø  Communicating this strategy, costs and related impacts to the highest levels of the organization and the Board of Directors and its operating interface department like safety, community relations, field operations, etc.


b.         Information Gathering and Risk Assessment

This is an essential protective role of security in an organization. It is the department for gathering and assessing information related to the development of a wide range of security-related events, assessing information and its various operations that can adversely affect the security and safety of personnel and the profitability or reputation of the organization.



This involves:

Ø  Logically determining the probability of these security-related incidents and development of appropriate preventive strategies consistent with sound business judgment and internal controls.

Ø  The information to develop these assessment and preventive strategies may come from multiple sources, including organization records, government and law enforcement agencies, news organization, existing security bodies of knowledge, and elsewhere within the environment.

Ø  The capability to make the links between often-disparate pieces of information from multiple sources to understand and assess their importance to the security of the enterprise.

Ø  The ability to understand and be familiar with the people; skills and technological aids that will assist in this process and the development of appropriate prevention strategies across the organization.


c.         Organizational Preparedness

The security manager is responsible and accountable for ensuring that the enterprise is prepared for a possibility of attack, catastrophic event, or related significant security incident (major fraud, product tampering, youth restiveness, kidnapping, industrial unrest, civil unrest, bomb attack, etc.)


This also involves:

Ø  Ability to successfully operate independently in fast paced, matrix-management environments, requiring driving programmes and projects to completion.

Ø  Identifying the nature of security risks in the business environment and the application of appropriate administrative, organizational, procedural and technical controls to mitigate those pure risks.

Ø  Understanding how and when to enlist the support of risk management, internal audit, finance controllers, outside resources, legal, human resources, and other staff functions also engaged in mitigating various risks to the business


d.         Securing People, Core Business, Information, and Reputation

Protection of the company’s integrity, image, people, processes, and assets from harm and loss is also a key responsibility of security management.


This involves:

Ø  Classification and protecting the financial and physical assets of the enterprise (cash, facilities, equipment, people and reputation),

Ø  Providing countermeasures to counter the potential risks involved in the loss of intangibles (reputation), intellectual property, and trade secrets.


e.         Incident Response, Management, and Recovery

In case of incident of attack or catastrophe, the security department will be responsible for coordinating efforts within the organization to restore critical system and provide facilities needed by the organization to function. There are three types of operations: Normal, Emergency and Post-Emergency.


These involve:

Ø  Coordinating with internal and external resources to ensure adequate medical, financial, and emotional support assistance is provided to employees, customers, and others involved in a catastrophic event or an attack on the organization.

Ø  Liaison with local, state, federal, and international government agencies as required.


f.          Investor Relations, Public Affairs, and Government Relation Coordination

The security management must closely coordinate with those responsible for investor relations, public affairs, finance, human resources, operations, and government relations. The security manger may be required to participate in the development of media interviews and testify before government regulatory agencies. Having come to terms with the importance of security and the expectations placed on the security manager in the organization, it is imperative we return to the topic at hand – Business Intelligence.



What is Business Intelligence?

Business intelligence can be defined as a processed information or act, which may serve as the base for further business actions. Mere raw information gathered cannot be called business intelligence, until it is well processed or analyses and presented in a form that serves as basis for business action or inaction.


Espionage in Politics and International Affairs

Intelligence and espionage are terms most common associated with national foreign policies; yet secret information is needed to make decisions in politics, commerce, and industry. Political parties have always been interested in the strategic plans of their opponents or in any information that might discredit them – Watergate was one that failed.


Most large corporate enterprise today has division for strategic planning that requires intelligence reports. Competitive enterprises are undeniably interested in the plans of their competitors; despite laws against such practices, industrial espionage is difficult to detect and control and is know to be an active tool for gaining such foreknowledge. Many of the tools of government intelligence work are used, including electronic surveillance and aerial photographic reconnaissance, and attempts are even made to recruit defectors.


Implications of Modern Technology

All forms and techniques of intelligence are now aided by an accelerating technology of communications and a variety of computing and measuring devices. Miniaturized cameras and microfilm have made it easier for people engaged in all forms of espionage to photograph secret documents and conceal the films. Artificial satellites also have espionage function – that of aerial photography for such purpose as detecting secret military installations. Information held or programmes running on computers are vulnerable to penetration by hackers, whether acting independently or for other bodies. The vanguard of these developments is highly set, but it is known that telephones can be taped without wires, room can be bugged (planted with electronic listening and recording devices) without entry, and photograph can be made in the dark. Of course, this same technology is used in countermeasures, and the competition escalates between those seeking information and those to protect it.


In foreign embassies in sensitive areas, confidential discussions routinely take place in plastic bubbles encasing secure room, to protect the confidentiality of information. Intelligence agencies have long been known to be staffed with expert lip readers. Privacy of communications remains under constant assault by technological developments that offer threat to, but promises for, human progress.


Principles of Intelligence

It is essential to collect good information regarding the market in which an organization operates, its competition, economic factors affecting operations, business trends, international affairs, political risks, and any other aspect of the environment affecting current or future activities of the organization.


Consequently the collection of intelligence information is a universal aspect of business operations. The key questions are not: Do you need to collect intelligence? If so, what kind does your organization need? Rather, how much is enough? What are the best methods to obtain it in a cost effective manner?


The key to any intelligence programme is the mission statement and cost list. The mission statement or strategic plan for information collection should be developed based upon the current and projected information requirement of the organization. Major business issues should drive this process. Based upon these issues, a priority list of information categories, functional activities, and specific collection assignments can be developed and managed.


The collection of information is then determined by the sensitivity of the information required. As in government intelligence collection, 90% to 95% of all information required by an organization is located in open sources. That is sources of information that can be identified and collected using normal research methods and analytical techniques. The remaining 5% to 10% is the sensitive information and can include due diligence questions, competitor strategies, political-risk issues, and answers to specific questions related to sensitive corporate activities.


Information of all types is collected in many departments of the organization to satisfy their requirement for timely intelligence. Departments, such as corporate planning, marketing, finance, legal, special projects, research and developments, strategic planning, and mergers and acquisitions may all be collecting both open and sensitive information on a continuing basis. Several methods are used to make sure that this information gets to the correct user on a timely basis and that collected data are properly analyzes, coordinated and presented.


Source of Intelligence Information

Open and sensitive sources are used on a regular basis. These sources include the following:-

a.         Magazine Subscriptions

b.         Internet

c.         Databases and Bulletin Boards

d.         Seminars

e.         Competitor Annual Reports

f.          Consultant Reports and Surveys

g.         Special Studies

h.         Consultant Projects

i.          Competitor Products

j.          Government Fillings

k.         Patent Fillings

l.          Legal Fillings

m.        Court Documents

n.         Freedom of Information Act Requests, etc.


Key elements or development of a comprehensive intelligence-collection programme tailored to organization priorities is essential to keep a business viable. These key elements include the following:-

1.         Getting priorities right;

2.         Establishing sources to provide continuing ability to scan the environment for important issues;

3.         Answering specific questions; and

4.         Assisting on specific projects.


Business and organization can go to many sources for assistance in the legal and ethical collection of necessary information. This discussion will provide the basic tools to get started and the sources to contract for comprehensive assistance.

The four types of business intelligence most often required are:-

(a)        Market Intelligence or Market Research,

(b)        Competitor Intelligence

(c)        Due Diligence, and

(d)       Political Risk.

Each organization has different information requirements and uses different means for collection and dissemination within the organization. Collection is carried out through both an internal organization and though the use of consultants. In small organizations, the functional departments responsible for the project requiring information will normally do the collection.


They might employ consultants to assist in these activities if workload, difficult of access or timing requires it. Large organizations often have a competitor intelligence function, whether called by that name or not, in the security department, or on a research staff. The objective of the intelligence collection function is to ensure that timely, reliable, and useable information is provided to the organization to assist in decision-making.


How the information is collected, verified, and presented is the responsibility of the purchaser of the information or data collection department.


Market Intelligence

Market intelligence or market research as is popularly known is a focused look at the market place. Depending on the aspect under consideration, it seeks to understand the market place for an organization. It is concerned with the demographics, market definition, end users of the products, pricing, promotion, and distribution channels, product design, impact of advertising, or any other related aspect of the customer- product or company competitor relationship.


Market research is very often conducted in the field using survey, such as consumer testing, market surveys, advertising questionnaires, etc. It seeks a through understand of the marketplace or the reaction to specific products in it. In effect, research answers specific questions about an industry, consumer, market, or product line.


Competitor Intelligence

Every business organization is concerned about industry and what the competitors are doing in the marketplace; their new products or services being introduced and their pricing policies. Since sales and marketing are local issues in a world where competition is global, understanding what a competitor is doing worldwide is critical to a thorough understanding of its current strategy. If actions in one market are compared with those of different markets, a much clearer picture of a business strategy can emerge.


New product development and introductions are much sought after information. Strategy plans; product pricing, or customer development plans can assist in formulating more effective marketing programmes for competitive products. Getting at this information requires creativity, access to a wide variety of information sources, and a broad range of contact in the industry under investigation.


Competitive Intelligence (CI) is not to be confused with Industrial Espionage (IE). There are many legal and ethical but creative ways to get competitive information.


They do not include the following:-

(1)        Stealing business secrets from competitors.

(2)        Inducing key employees to resign and bring sensitive information with them,

(3)        Buying needed information from the staff of a competitor’s organization or

(4)        Violating the law or morality.


Collecting Competitor Intelligence is a challenging, creative, and necessary adjunct to the information requirements of an organization. It is often considered more of an art than a science. This art involves selecting, manipulating, and using a variety of techniques to obtain the required information on behalf of the organization. The sources and methods used are the keys to a successful collection effort.



Remember that while your organization is trying to collect required information, your competitor is probably doing the same thing. You also are vulnerable to the attempts by others to collect required information about your business. Perhaps the competitor is not as ethical as your organization in their collection technique. Can you determine if you are being targeted, and if so, what can you do about it.


A counter intelligence review of your organization, its paper tray in open literature and industry sources might be very instructive. What do your competitors already know about your organization? You may as well find that there is a very small percentage of information that is really sensitive and is not easily collected. You must make every effort to protect it while you are collecting as much as possible about your competitor(s).


Due Diligence

Due Diligence assignment and activities include the following:-

1.         Background Investigators;

2.         Reviews of Commercial Histories;

3.         Analysis of Litigation Fillings; and

4.                  Interview with Customers, Vendors, Suppliers, Partners, Investors or Takeover Possibilities, or Clients of Potential Target.


A good investigation is an essential business success factor in that:-

v  It can actively support the investment process;

v  It can provide ongoing intelligence about the marketplace, the subject of a possible investment; cover or uncover previously undisclosed problems.

v  It can provide insights into previously undetected opportunities; add-value to relationships discovered in the course of the inquiry, or locate new investment opportunities.


Knowing when not to do the deal is sometime more important than doing the deal. To prevent mistakes, it is essential to learn more about potential acquisition targets, merger partners, investors, etc.


Background inquires are now a regular and preliminary part of the deal review process. Consequently, if routine inquires reveal significant discrepancies between representations and actual findings, the process can be terminated before significant costs are incurred.


An organization is often face with a decision about whether to invest considerable amount of time in financial analysis, due diligence, and staff expenses to prepare the deal for financing and integration into the operation of the organization. The organization may be concerned that after all the analysis they might loss not only their current expenses but also other equally attractive opportunities if the results turned out to be less than hoped for.


Using investigative service firms to support investment activities is not much more common than when it was pioneered for this activity in the mid-1980s. In 1987 to 1990, it was very common for 35% to 40% of the assignments to result in some type of major question being identified that either stopped the deal or resulted in modified terms being required by the lender. Fortunately, this high-risk ratio is much lower today (20% to 25%) because investigations are more often conducted at a very early stage of the review process.


The information required and the questions asked relating to a potential investment opportunity must include the following:-


a.         What is the subjects’ commercial history, e.g. are they good people to do business with?

b.         Does management really has the background and skill they claim?

c.         What does the marketplace really think about the subjects, e.g., are they respected (as competitors, for product quantity, etc)?

d.         What is the subject’ real strategy? Why are they trying to get a capital infusion? Do they plan to do what they are telling the client or do they really have an ulterior motive?

e.         Are there hidden liabilities in the product; obsolesce factor not disclosed, pending legal, tax, or regulating matters not disclosed.

f.          What are key employee attitudes towards the deal? Will key employees continue to work afterwards?

g.         Are there any organized crime connection or questionable sources of existing capital or investment involved?

h.         Do political problems exist that may affect the operations after the investment that may not exist now?


Knowing when to ask the right questions about the representations in a potential transaction often spells success or failure.


Sources of Due Diligence Information

Sources of due diligence information can be extremely broad, depending on the type of investigative questions to be answered, where the subject is located, and how quickly the information is required. The degree of discretion required to conduct the inquiry is also extremely important because it can affect both the quality of the information obtained and trust in the potential relationship if not done properly.


Criteria for determining how the investigation should be conducted include four levels of discretion that the due diligence staff managing or conducting the investigation must employ. These levels of discretion in handling the inquiry can raise or lower investigative costs because techniques to be employed will differ significantly.


They are as follows:-

1.         The subject of the inquiry should never know that an investigation has been conducted.

2.         The subject should not know that an investigation was done, but if he or she should find out it would break the deal or relationship.

3.         The subject can find out about the investigation after the deal is concluded.

4.         The subject knows about the investigation and will cooperate or can be contracted by the investigator.


Depending upon what level of sensitivity is required, the cost, time required and, methods of inquiry will be tailored.


Political Risks

Political risks’ reporting seeks to provide an understanding of the threats, vulnerabilities, and risks to your operations in specific locations in the country, foreign countries or area of the world. The collection of time sensitive information related to economic, political, crime, and terrorism issues, business policies, governmental stability, and corruption are all basic elements of these reports.


Reporting is providing by the following:-

Ø  Corporate employees;

Ø  Travelers;

Ø  Foreign operations;

Ø  Purchased reporting services report; and

Ø  Commissioned studies by consultants.


This report can be general in nature and prepared on a specific location or country. The report covers all key economic indicator, political conditions, business, and commercial factors, government stability, peace and order, and social factors. These reports require analysis for a specific organization by internal staff to determine the implications of the information contained in the report.


Consultant reports can also be tailored to a specific organization and its activities in a country and the impact of current conditions on the organization. Sometime combinations of both corporate and purchased reports are used to ensure redundancy and cross check recommendations and conclusions. A political risk report often is based upon the following types of specific criteria:-


a)         Crime and risk to personnel in the area.

b)         Corruption issues affecting business operations.

c)         Government stability and intervention in operations.

d)         Information protection and product/brand integrity.

e)                  Operational integrity – protection of business operations among others.