The situation
A mid-market private equity fund had agreed terms to acquire a majority stake in a regional logistics group that operated a fleet of 31 vessels and a network of bonded warehouses. Database screening of the company, its directors and its declared shareholders returned no sanctions matches and little adverse media. Signing was scheduled in three weeks.
The fund's deal team had seen enough transactions to know that a clean screen is not the same as a clean company. They asked us for an enhanced review focused on ownership and conduct.
The question
Who ultimately owns and controls the target? And are there undisclosed relationships or activities that would expose the fund to sanctions, legal or reputational risk once it became the majority owner?
What we did
A lead due diligence investigator, two registry researchers, a maritime analyst and two linguists worked the case, with an independent red-team reviewer.
1. Rebuilt the ownership chain from source documents
The declared structure showed a holding company owning the operating group, itself owned by three individuals and a corporate minority shareholder holding 24 percent. Rather than rely on aggregated databases, we pulled original filings for every entity from corporate registries in four jurisdictions, including historical filings and scanned documents. The 24 percent shareholder sat on top of a chain of 11 entities.
2. Followed the nominees
Six of the 11 entities shared the same two directors. Each of them held directorships in more than 400 companies, a hallmark of professional nominee services, and all six appointments had been filed by the same corporate services provider. Nominee structures are built to conceal, but they rarely conceal perfectly. One entity's annual return, filed late in a jurisdiction that publishes scanned documents, carried a signature block for someone else: the individual who had also signed a share pledge over the stake as its beneficial owner. We refer to that person as Subject C.
3. Identified who stood behind the owner
Subject C did not appear on any sanctions list. But court records in a second jurisdiction showed Subject C acting under a power of attorney for a sanctioned individual in a property dispute, and historical corporate records showed the two as co-directors of a company dissolved two years earlier.
4. Checked conduct, not just ownership
Ownership tells you who could direct a business. Conduct tells you what it actually does. Our maritime analyst reviewed 24 months of vessel tracking data for the fleet. Four vessels showed 23 transmission gaps of 12 hours or more, each beginning near ports subject to sanctions measures. Commercial satellite imagery from two of those gaps showed a fleet vessel moored alongside another ship for periods consistent with a ship-to-ship transfer.
5. Challenged the conclusion
The red-team reviewer put forward the strongest innocent explanation: Subject C is a professional representative with many clients, and the court record reflects legal work, not shared control. The reviewer accepted that this was plausible on the court record alone. It did not explain the earlier co-directorship, the signature on the share pledge or the behavior of the fleet. The control finding was reported at moderate confidence rather than high to reflect the remaining uncertainty.
| Layer | Record | What it showed |
|---|---|---|
| Declared shareholder | Shareholder register | Corporate holder of 24 percent |
| Entities 1 to 11 | Registry filings, 4 jurisdictions | Recurring nominee directors, one filing agent |
| Late annual return | Scanned registry document | Signature of Subject C |
| Share pledge | Security filing | Subject C declared as beneficial owner |
| Property dispute and dissolved company | Court and historical corporate records | Subject C linked to a sanctioned individual |
What we found
- High confidence: Subject C is the beneficial owner of the 24 percent stake, held through 11 entities in four jurisdictions.
- Moderate confidence: Subject C acts on behalf of, or in coordination with, a sanctioned individual.
- High confidence: four vessels in the fleet repeatedly stopped transmitting near ports subject to sanctions. We judged it likely that at least some of those gaps concealed sanctioned trade.
Screening tools match names against lists. Nominee structures exist so that no listed name ever appears. The decisive evidence here sat in a scanned annual return and in court records that commercial databases do not index. It took people reading primary documents in their original languages to find it.
The outcome
We delivered the report on day 14, a week before the scheduled signing. The fund's counsel used it to renegotiate the transaction.
- The 24 percent stake was excluded from the deal and bought out by the other shareholders before closing.
- The four vessels were withdrawn from the routes in question, and the purchase agreement added specific warranties, indemnities and post-closing monitoring of the fleet.
- The fund estimated the exposure avoided at $180M, the value of an investment that could otherwise have been frozen or forced into divestment.
What made the difference
Three things. We went to primary filings in every jurisdiction instead of trusting aggregated data. We looked at what the business did, not only who owned it, and the vessel tracking turned a paper ownership concern into an operational one. And we were precise about confidence. Counsel could act decisively on what was established with high confidence and negotiate protections around what was not.