Emerging market risks often ignored

Friday, October 6, 2006

A significant proportion of European companies making investments in emerging markets are ignoring serious risks that would be deal killers in their own markets, according to a new survey published on Friday.

The findings of the study by Deloitte, the business advisory firm, suggests that in their rush to tap into new growth opportunities, more than 20 per cent of the top 100 of Europe?s top infrastructure companies polled are undeterred by bribery, corruption or money-laundering. More than 25 per cent are not discouraged by criminal connections.

The results come in spite of what has been an increase since 1999 in the number of foreign direct investors that conduct integrity due diligence, or pre-investment background checks, before going after acquisition targets in the emerging markets of eastern Europe, Asia, South America and Africa.

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Source: Financial Times (link opens in a new window)