| Ascendant Business Solutions - Discreet Inquiries |
Market Entry - ISSUE 2, APRIL 2007Discreet InquiriesHaving doubts about a potential JV partner? Worried that your corporate disaster preparations or security measures aren't optimal? Recognized experts at gathering business intelligence, assessing and countering risks and parting corporate veils, the operatives of Spectrum OSO Asia provide answers to many of the thornier questions that arise while doing business in Japan and throughout the region. Spectrum OSO, which set up in Japan in November 2004, is essentially a diverse professional collective comprised of former officers of the law, prosecutors, government regulators, investigative journalists, bankers, financial advisers, executives and cultural specialists. The firm has 22 full-time staff in the Asia Pacific and several part-time employees.Operating out of offices in Thailand, Macau, Japan, Hong Kong and Guam, Spectrum OSO performs due diligence investigations, background screening, corporate investigations, disaster recovery and risk assessment, and litigation support. Other arms of the organization provide personal protection services and handle gaming industry issues. The company's managing director in Japan, Geoff Brown, ran his own security consultancy and investigative firm here before merging operations with Spectrum OSO. A 21-year veteran of the New South Wales police, Brown has extensive experience in fraud and commercial crime investigations and is also national director for the International Bodyguard Association (IBA), the world's oldest and most recognized bodyguard organization.  "Much of our work is for foreign companies interested in starting up joint ventures, investing in local companies, or buying out a Japanese entity," Brown says. "We provide background on the target company and its main directors to ensure our clients know all the facts before doing a deal." Spectrum OSO also regularly carries out corporate investigations, both internal and external to client companies, including fraud inquiries and employee vetting. Providing protection services for high-profile people is another primary service. "Our clients range from VIPs from Fortune 100 companies visiting operations within the regions to celebrities and dignitaries," Brown states. "We offer bilingual, IBA-trained executive protection operatives and vehicles such as stretch limousines, Mercedes and Audis." The services Spectrum OSO provides are highly flexible, Brown says, because the client's situation and needs are often fluid. "Companies regularly reinvent themselves, and an assignment can change at a moment's notice. We have to be ready to react to that." While maintaining a discreet public profile is a necessity, relationships with clients must be very open. "We need to know what goals they're trying to achieve so we can determine our role and what services they'll require," Brown explains. "At the same time, we're very mindful of protecting the client's brand and image." Don't Just Do the DealBrown says companies usually contact Spectrum OSO when they want to institute preventive measures, or when a problem is suspected or detected. "We then identify the weaknesses and make recommendations on how to improve their systems and procedures so it can't happen again," he relates. "We've been able to help clients identify internal problems, such as systems and procedures that have broken down. We've also provided major companies with disaster and emergency evacuation plans, running desktop scenarios and assisting them with staff training and so on." According to Brown, the threats companies in Japan face vary quite a bit depending on what the business entails. "Manufacturing firms, for example, have different risks—like supply chain issues, parallel imports, and IP theft and counterfeiting, especially now that Internet shopping is so popular here," he says. "Financial institutions, on the other hand, are more aware of issues relating to mergers and acquisitions, internal fraud and so on. "IT security is always big," he continues. "Technology can be your friend and your foe. Removable media, like what I'd call a 'thumb drive,' have enough memory that you could practically download a whole hard drive's worth of data and walk out the door." Companies leave themselves vulnerable in several other ways, too. "Most companies are profit-driven, and security doesn't generate money," Brown explains. "It's a black hole you pour money into, and you don't really see a return until something happens. Even then the return is that you haven't lost money." Without an obvious return on the investment, he notes, some companies will forego doing a risk assessment or security audit, or fail to pursue evacuation or disaster recovery planning.  "Particularly in the Japanese market, which is very fast-paced, firms may also go into a joint venture without doing proper due diligence, which is really common because the pressure is always on to do the deal." During one due diligence investigation, he relates, Spectrum OSO found a potential joint venture partner here had strong links to organized crime. That got the client's attention. However, even after companies do the due diligence, there's a tendency to simply file the report. "Spectrum OSO does not advise clients on whether to go ahead with plans or deals," Brown stresses. "After we give a client information, it's up to them to assess the risk. When you get a due diligence report, examine it." Skirting DisasterAscendant handles many of Spectrum OSO Asia's back-office administrative functions, as well as providing accounting and tax support. "The earthquake in Taiwan last December that damaged undersea cables brought this necessity home to a lot of companies in Japan," Brown explains. "Many firms here had problems with the Internet, sending emails and data, especially important financial data, both domestically and between Japan and Hong Kong and elsewhere." Fortunately, Brown says, a lot of smaller companies are getting into buildings with established disaster recovery plans and evacuation procedures, so the business can work into that overall emergency plan. "Larger clients with many floors or even an entire building face a whole new set of circumstances, however, and they're becoming more mindful of the importance of implementing these strategies," he notes. Game Time
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"We and our partners in the gaming group recently completed an assignment for the Singaporean government related to the two casinos approved there," Brown relates, "and we're monitoring similar developments within Asia, including Japan. There's a lot of interest being generated about legalized casinos here. When the time comes, I'm sure we'll have a role to play in the ongoing systems and processes for legalization."