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With so many mergers and acquisitions, IPOs and investment going on in the global economy as well as the increasing regulatory environment, the demand for due diligence and compliance screening is high.
One company which provides those services in Japan and South Korea is J-Screen KK. Established in 2008, J-Screen uses an extensive legal database of litigation records, criminal records and organized crime information, as part of its screening process, to provide reports to clients such as financial institutions and multinational companies.
J-Screen is headed by Tris Fenwick who has 25 years public and private sector investigation experience in Asia, the last 14 years spent in Japan. After completing seven years as a detective senior inspector in the Royal Hong Kong Police investigating large-scale commercial fraud, Fenwick joined Pinkerton Malaysia. In 1999, he came to Japan and established Brooke Consulting to provide pre-employment screening and due diligence services in Japan and Korea. In 2006 he sold the employment screening side to a U.S. listed company and subsequently established J-Screen KK to take over the due diligence side.
J-Screen’s newest business division is Tokyo Property Search, a unique tenant screening business, which has just been launched.
Japan Today visits Fenwick at the J-Screen offices in Shibuya to hear more.
What sort of due diligence does your company provide for clients?
A lot of our clients are foreign financial companies involved in M&As, while others use us for pre-IPO screening, vendor or client account screening. They need to know about the business partners they are dealing with. For example, do they have shady connections, have they been involved in criminal activities or any regulatory issues, and have they been involved in litigation. For U.S. clients, in particular, this sort of due diligence is essential due to the international reach of the U.S. Foreign Corrupt Practices Act.
Where do you get your information?
We get our information comes from five main sources. First is is the publicly available information which is accessible from the Internet. Secondly, we search the various public records such as the Japanese government gazette, company registration records, directorship records etc. Thirdly, we subscribe to various private databases such as Teikoku, Japanese press and media. Fourthly, and probably the most important information, is the proprietary information that we have collected over years such as court records, criminal information etc. Lastly we also gather information from human intel sources.
It’s important to emphasize that everything we do is legal and transparent and we assure clients that the information we give them is legally obtained. We present the information as it is, although we will always attempt to verify through third party sources. However, we do also include market rumor information even if it cannot be independently confirmed. In all cases, we explain the exact source of the information and it is up to the client to decide how to use the information and whether to go ahead with their deals or not.
How do you market your services?
A lot of business comes through referrals. It is a very trust-based industry and we have a lot of repeat business. I’ve been in this business for 25 years and have made a lot of contacts.
Do you still do pre-employment screening?
Yes. This is particularly important for financial services companies, which are highly regulated and have to do pre-employment screening. Sometimes, candidates for high-level jobs do fabricate their CVs. It happens but not often.
How many due diligence cases do you usually handle a month?
We have 20 people, mainly researchers, so we can handle 500-600 cases a month. Some of those might just be an account opening screening that can be done in a few hours and some may be a pre IPO project which can take 2-3 weeks.
Has 2014 been a good year so far?
Yes, sales are up 30% over 2013, partly due to the boom in certain sectors such as renewable energy and partly due to an expanding client base.
Tell us about your latest business, Tokyo Property Search.
In the U.S., if you are renting a property, you can check a database to see if your prospective tenant has ever been evicted or been involved in property related legal issues. Up until now, there hasn’t been any available way of screening a tenant in Japan. You wouldn’t know if the tenant had been previously evicted from a property or not. So we are providing a unique service. We’ve been collecting court data from the Tokyo District Court since 2004 and out of that data, we have taken all the cases related to property, so we can search if any company or individual has previously been involved in a property dispute or been evicted from a premises in Tokyo. Our clients are mainly Japanese property management companies. We are just starting to market the service now and have had a very positive response so far.
What is a typical day for you?
I get up about 5:30 a.m. and go running or go to gym for kickboxing or yoga. I get here about 830 a.m. I’ve got two young boys, so I try to leave about 6 p.m. and spend time with them.
For further info, visit www.j-screen.jp and https://www.tokyopropertysearch.com
© Japan Today
1 Comment
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M3M3M3
In my opinion these screening services compound the problem they are trying to solve and there might be a certain degree of hypocrisy involved.
On the one hand, they exist because in Japan it's expensive, slow and stigmatizing to enforce your legal rights through the courts. Therefore, you had better carefully screen people ahead of time to avoid having to sue or being sued. On the other hand, if a company or individual actually attempts to enforce their legal rights through the courts (which is why courts exist), they will turn up on these databases.
I'm curious as to what happens then? Do these types of companies provide their clients with a legal opinion which explains the legal issues in the case? I highly doubt it. They are probably not legally qualified to do so. Most likely, the fact that the company or individual simply appears as a party to a legal dispute will suggest that this is a valid reason to disqualify them from consideration.
While the courts are by no means perfect, this could just add to the stigma and further undermine the legal system for ordinary people in Japan.
In any event, the value of these legal databases as a screening tool is highly questionable as the vast majority of legal disputes in Japan never see a court room. Many companies are also using arbitration to keep their disputes private. I hope foreign clients of these services are aware of this.