Fascinating article from the New York Times on the difficulties and dangers of acquiring information for corporate due diligence in a country with opaque corporate and credit institutions. I especially liked this comment on when crack-downs occur against investigators who do this work:
An arrest like Mr. Humphrey’s is “never about the legal issues. It’s always about who has an interest in suppressing information,” a Western consultant in Beijing said.
That is, who did he piss off.
The article also discusses how these investigators are particularly vulnerable at the moment because of changes to the formal and informal rules governing access to personal and corporate information that would allow one to detect fraud. This probably also needs to be seen in the broader context of a government crack-down on corruption.
This resonates with dangers of conducting research on other opaque institutions—for example, it’s generally well known amongst those who research mafias and organised crime that one should avoid conducting field research in locations where inter-group territorial conflict is underway.
Article link here: In China, The Danger of Due Diligence