Industry – Solar energy
Territory – Spain
Client – Global solar energy group
Post Acquisition Due Diligence – The client acquired a distributer of solar power products in Spain. Following the acquisition process, the client discovered indications of financial irregularities. A. Yakim conducted post-closing due diligence related to validity of presentations, disclosures and financial statements that were used during the due diligence. We examined all documentation and information used at the due diligence stage, together with the due diligence reports that were prepared by Spanish accounting and legal firms. We conducted a comparison between the information and documents provided during due diligence stage to information and documents found at post acquisition stage (accounting data, inventory, agreements with customers, electronic data, etc.). Post “ acquisition due diligence identified financial irregularities:
- False accounting records changed P&L results.
- Current customers’ debts had to be classified under doubtful and bad debts.
- Current inventory items had to be classified under slow moving and dead stock.
- Tax evasion.
Outcome –
- Based on findings and evidence, the client filed a lawsuit against former shareholders and executives. The Court findings were consistent with A. Yakim’s results and decided upon substantial compensation to the client.
- We assisted the client in reporting the findings related to tax evasion to local authorities, in a way that removed liability from the client.