Khristenko, A. post-graduate
student
Supervisor:
Yrysh L. , Senior Lecturer
Donetsk
National University of Economis
and Trade
named
after of Mikhail Tugan-Baranovsky Donetsk.
DUE
DILIGENCE PROCESS IN UKRAINE.
Introduction. In the
world market there should be noted sucha fact as a merger,
amalgamation, resale of companies,
with either its expansion or acquisition, is the tendency to increase the
number of such transactions. By studying the process that occurs auring the purchase or sale of a business
there should be explored the Due Diligence process, which is an integral and
important part of the merger and takeover.
The purpose of this research is the study of
the procedure Due Diligence at the merger of business of the corporation on
the Ukrainian market, the definition of its basic stages in conduct.
Due diligence (due diligence) is checking
for compliance with the actual status of the company claimed. Appointment of the Procedure
"due diligence" is the assessment of benefits and obligations of the
proposed transaction. Such an assessment is carried out by analyzing all
aspects of the past, present and forecast future of the acquired business and
identifying any possible risks [1-2].
During the study of
mergers in the corporate enterprise on the territory of Ukraine, it should be noted that the procedure "due diligence" is almost not
practised, in comparison with
foreign enterprises. This must be due to the cost of the procedure, duration,
professionals who have a practice of carryingout such a procedure.
Duration of
treatment "due diligence" takes from
several weeks to a year, depending on the structure and size of business.
There
should be noted
the importance of this procedure, despite the cost associated with hiring
lawyers, accountants, financiers and other professionals, which in any case
should not cause failure in the quality of "due diligence", since
such savings could lead to a loss of more than major resources.
In conducting the "due
diligence" on the basis of practice
of professionals from LLC "Profkonsalt"
should be divided into six main phases of the "due diligence" [3].
Ø
Creating a skilled team "due diligence". For
the procedure "due diligence" a
buyer attracts consultants and experts. At least, the team "due diligence" should include legal and financial /
accounting staff. It also may include economists, engineers and other
professionals taking into account the specifics of the company. The more
skilled team of "due diligence", the more adequate and accurate report
will be in the future and,
accordingly, the fewer problems the buyer may face in the future.
Ø
Prepare a questionnaire. A good procedure "due diligence" must begin with the
preparation of a detailed checklist of "due diligence" (questionnaire).
Ø
Talks
and interviews with the seller. The buyer should obtain information not
available in the documents, in the course of negotiations and interviews with officials from the seller. This is an
important part of the "due diligence".
Ø
Data room. Available premises, places where all the necessary documents in the so-called
special room (data room). A special room should be as equipped with all
necessary equipment: aspossible
phone, fax, printer, copier, modem, etc. It is important that each team member of "due diligence" had
a regular access to the room at any time.
Ø
Materiality. Quite important in the process of "due
diligence" is to check the in-house operations: any contracts concluded by
the company (mortgages, loans, contracts, leases and other civil contracts),
including any letters of intent, money transfers, the proposed public offering
of shares ( IPO). A thorough analysis of the legal risks of the target company,
verification of intellectual property, competition law issues, protecting the
environment. At the same time legal counsel must determine what legal actions are significant, that of course, is relative.
Ø
Receiving confirmation of information from state agencies. For a
complete study of the state of the company, first and foremost, you must make
sure that the company was established in accordance with the law and continues
to exist. For this the charter are studied documents of the company and any amendments
thereto, for example a change of name. The constituent documents should be
checked in the original, either in the form of notarized copies.
To obtain supporting
information from public bodies, be sure you must have authorization from the
seller to obtain such data.
Ø
Preparation of the report. After reviewing and analyzing
all the information, interviews, a report "due diligence" is prepared. The report should always be in writing. Reports of lawyers, accountants,
financiers and other professionals have to be separate. For international
transactions, when in command of "due diligence" there are several
law firms, a report form must be agreed between them.
From the foregoing material it is necessary to highlight that the success of a successful procedure "due
diligence" depends on many factors, internal and external environment of
the Seller, as well as the knowledge and skills of professionals who are
members of the team "due diligence", therefore the Buyer must have a very serious approach to the selection of the bought object and recruitment of the team "due diligence".
It should be noted
that the procedure "Due Diligence" is
studied as a procedure
that is used in a merger or sale of businesses, the basic steps of this
procedure are determinid.
Using
literature:
1.
Дроздовская Н.В. Что такое due diligence?// Н.В.Дроздовская. - [Електронний
ресурс]. – Режим доступу: www.elitclub.u/back/tmp_file/4247 baeb4a8f9.doc
(48 КБ).
2.
Мальцева, М.А. Due diligence как проверка должной добросовестности/
М.А. Мальцева // Аудитор. – 2010. - №8 – С. 32-36.
4. http://www.ifac.org/publications-resources/proposed-changes-code-ethics-professional-accountants-addressing-conflicts.