More than a third of UK companies fail to carry out anti-bribery and corruption checks during mergers and acquisitions

 
Lucy White
More than half of the companies surveyed had gone ahead with a merger or acquisition despite high bribery and corruption risk (Source: Pixabay)

UK multinationals are falling behind in completing anti-bribery and corruption due diligence before high risk mergers and acquisitions (M&A), according to a new study.

Only 58 per cent of respondents in large UK companies complete the checks, the research from law firm Hogan Lovells revealed, as opposed to 85 per cent in each of the US, China and Germany.

Read more: Watchdog plans to force firms to make anti-corruption and anti-bribery disclosures

This was despite that fact that 64 per cent of respondents globally said M&A gives rise to some of the biggest anti-bribery and corruption risks.

“Too few companies do enough to counter bribery and corruption in M&A and private equity investments,” said Hogan Lovells' Crispin Rapinet.

“Instead they busy themselves with due diligence on tax, antitrust, legal, financial, intellectual property, and other asset or industry-specific areas. None of which makes a difference if the company you're after is corrupt.”

More than half of the companies surveyed (57 per cent) had gone ahead with a merger or acquisition despite high bribery and corruption risk, with the US and Germany reporting 71 per cent and 78 per cent respectively.

Read more: Two Samsung execs stand down amid a corruption scandal that led to boss Jay Y Lee's arrest

Almost three quarters of large companies around the world were failing to involve their anti-bribery and corruption compliance teams “in good time” during M&A discussions, Hogan Lovells found, while 54 per cent said their pre- and post-M&A due diligence was not thorough enough.

Multinationals in the US were most concerned about their due diligence quality, at 76 per cent, compared to France at the bottom with 56 per cent.

And in a year of uncertainty stimulated by Brexit, President Trump and North Korea, 36 per cent of the big businesses still saw M&A as one of the biggest external risks to their company.

Read more: Rolls-Royce to pay £671m to settle corruption probes with three global fraud squads

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