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Due Diligence

Industry- Telecommunications

Country of Operation- India

Assignment- To carry out enhanced due diligence on a prospective distributor.

TACT India was assigned to carry out an enhanced due diligence to assist a Fortune 100 MNC in screening and appointing distributors across India. The due diligence was aimed at verifying the claims made by some prospective distributors in the short listing process. As the due diligence exercise panned out, TACT’s financial investigators came across several non disclosures. It transpired that some of the claims made were contrary to what had been submitted. TACT’s investigators focused on the financial credibility and the sources of the funds to be invested, the reputation of the business group and to assess the ethical standards of the potential partner’s business operations. The firm also chose to verify the mandatory compliances and to carry out a criminal and civil litigation check as a measure of abundant caution.

The major findings included the following:-

       The financial status was assessed from the balance sheets and the profit and loss accounts provided by the subject for the previous three years. It was observed that the working capital gap demonstrated a declining trend wherein the current liabilities were increasing. The capital from the business was withdrawn in the last financial year for investments that were not compatible with the ongoing business operations. The prerequisite ratio of equity to debt in investment and derivation of equity from legitimate sources as disclosed in tax returns also had gaps. Verifications of the source of funds for the investment in the proposed business prompted the subject to alter the investment plan which apparently could not be verified/tracked down to disclosed sources.

  Verification of the compliances led TACT’s financial investigators to identify an error in the payment of Octroi tax (an inter state tax levied in India for movement of goods). The firm also established that a criminal case had been filed against the potential distributor and linked the case to a live litigation in the High Court.

Incisive enquiries revealed that motorbikes that were being transported from one state to another attracted a particular amount of Octroi tax whereas they were camouflaged as onions to lower the Octroi charge.  The tax evasion ran into several thousands of dollars and was eventually reported to the local police station following which a case against the subject was lodged by the municipal corporation.  The subject was subsequently arrested and later released on bail. It is pertinent to mention here that the subject did not disclose this incriminating information in his submission to the principal.


The potential risks of consummating a business relationship with the prospective partner were highlighted to the MNC principal as part of TACT’s case report. The firm’s astute advice convinced the client to disengage from the potential partnership.  



Brand Protection

Industry - Electrical

Country of Operations - India

Assignment – Anti Counterfeiting Operations

An electrical major was experiencing rampant counterfeiting of some of its more popular brands. The resultant loss in terms of market share was in millions of dollars. The company’s goodwill was also under severe threat owing to the inferior performance of the counterfeits.

TACT’s brand protection team, comprising highly decorated former army men & officers along with retired police officers was mandated to assess the magnitude of the problem, generate workable solutions and implement corrective measures.

The firm conducted more than thirty high intensity raids to identify the illicit value chain.

With leads from these disclosures, enforcement action led to twenty operatives being arrested and machines and material of significant value seized.

Thanks to the presence of retired senior police officers within TACT’s leadership team, the law enforcement authorities across India extended the highest level of cooperation.

TACT’s legal team featured prominently in this operation and indeed played a decisive role in the litigation.

The client admitted to TACT that a sustainable level of deterrence had been achieved and entrusted the firm with an ongoing mandate. Independent market surveys conducted by third parties later revealed that the company’s market share had expanded by more than 15% over the following twelve months.

The firm is currently engaged with a dozen brand owning clients on a pan-India basis in similar anti-counterfeiting operations on a retainer format.


Employee Screening 

Over the last three years, TACT’s specialist employee screening practice, TRACE, would have screened the backgrounds of more than ten thousand potential recruits prior to hiring by their client companies.

In the process, TACT is endowed with a deep insight into the common malpractices employed by potential hires. Some of them are listed below –

  • Exaggeration of resumes 
  • Faking names of employers & employment dates –                   particularly in the IT industry where there are far too many       nondescript companies  
  • Doctoring of educational certificates & employment/release       letters 
  • Concocting salary slips  
  • Providing ghost references 
  •  Non disclosure of exact residential address & acts of               criminality

The highest incidence of non disclosure or incorrect disclosure is in terms of employment history (almost 65% of rejected candidates were culpable of this act) followed by discrepancies in educational attainments (close to 25%). The remaining 10% of discrepancies were related to residential addresses, references and criminal history.

Unlike many other background screening companies that rely overly on public databases, TACT follows the more challenging path of verifying facts in the physical environment to the extent possible.

Very few Indian universities provide the facility of electronically verifying educational data. The police has not even contemplated an online database of charge sheeted and convicted persons. Compounding the challenge is the absence of an equivalent of an electronically administered social security system in India.

Several foreign background screening firms have been known to limit their Indian operations to online verification which does not address even one percent of the target population.

The more intuitive MNCs have realized the limitation of using these firms and progressively, home grown background screening firms are winning market share from these “limited capability” foreign firms.

TACT is a clear front runner among the Indian background screening firms and is committed to enhancing its processes to ensure foolproof verification.

For more details on TACT’s employee screening practice, please follow the link



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