4 February 2011

“Look before you leap” is a survey published by Deloittes in the US. It indicates that almost two thirds of North American companies have renegotiated or cancelled potential mergers or acquisitions with offshore companies over the last three years because of corrupt practices uncovered during due diligence processes. The survey reports that … “Increased governmental crackdowns on corporate corruption and foreign bribery issues are dramatically changing the playing field for potential transactions. As such, companies are either re-evaluating the costs and benefits of these deals, or are outright scuttling those that present unacceptably high risks.” As the Transparency International Corruption Perceptions Index shows that the majority of public administrations around the world do not rate a 5 out of 10 rating, the extent of corruption in the business sector is unsurprising. It is heartening that US businesses are reluctant to buy into companies with shonky practices.