When Is Due Diligence Done and Who Is Responsible for It – Welcome to SIEMA KONSULTAN, your trusted partner for comprehensive information about the due diligence process for companies and individuals across Indonesia. Are you considering investments, business acquisitions, or other significant transactions? If so, understanding when and who is responsible for conducting due diligence is crucial. Let’s explore this in detail so you can maximize the benefits of this vital process.

What Is Due Diligence?

Simply put, due diligence is a thorough investigation and evaluation of a company, asset, or individual prior to entering into a business transaction. Its purpose is to ensure that all related information is accurate, complete, and reliable, enabling decision-makers to reduce potential risks in the future.

When Is Due Diligence Conducted?

Typically, due diligence takes place before a final agreement is reached in transactions such as acquisitions, investments, mergers, or major procurement. Here are the common stages when due diligence is performed:

1. Pre-Negotiation Stage
   At this point, prospective buyers or investors start gathering initial information about the target. If they decide to proceed, due diligence becomes a key strategic step.
2. After the Letter of Intent (LOI) or Preliminary Agreement
   Once both parties agree to continue with the transaction, in-depth due diligence is carried out. During this stage, detailed information is collected and evaluated.
3. Before Final Contract Signing
   When all data has been verified and risks minimized, the parties prepare the final documents and conduct last-minute assessments before signing the official agreement.
4. Post-Transaction
   Although less common, there are cases where due diligence continues after the transaction to ensure all terms and conditions are met.

Who Is Responsible for Due Diligence?

Responsibility for conducting due diligence depends on the type of transaction and the agreement between parties. Generally, the following parties are involved:

• The Buyer or Investor
  They usually appoint an internal team or external consultants to carry out due diligence. Ultimately, they are responsible for ensuring all aspects are thoroughly checked.
• Legal and Accounting Firms
  Professional law firms and accounting firms play crucial roles by performing legal, financial, and operational due diligence.
• The Target Company
  In some cases, the company being acquired or audited is responsible for providing the necessary data and documents and assisting the process.
• Third Parties
  If needed, independent auditors, industry consultants, or government agencies may also be involved.

Key Steps in the Due Diligence Process

1. Planning and Scope Definition
   Determine which areas will be examined, such as financial, legal, operational, technological, and compliance aspects.
2. Data Collection
   Gather relevant documents, financial statements, contracts, permits, and other pertinent data.
3. Data Analysis
   Conduct in-depth evaluation to identify risks and opportunities.
4. Reporting and Recommendations
   Prepare a comprehensive report outlining findings and suggested actions.
5. Decision-Making
   Based on the due diligence results, the buyer or investor can proceed, negotiate adjustments, or cancel the transaction.

Why Is Due Diligence Important?

Due diligence is vital because it:

• Helps identify hidden risks that might not be apparent initially.
• Protects investments and ensures the company’s or asset’s value aligns with expectations.
• Builds trust among involved parties.
• Prevents legal, financial, or reputational damages in the future.

Conducting due diligence without sufficient expertise and experience can be risky and time-consuming. Therefore, selecting professional consulting services is highly recommended to ensure the process runs smoothly, efficiently, and reliably.

As an experienced due diligence consulting firm, SIEMA KONSULTAN is ready to assist you in executing this process professionally and reliably. Located at Sampoerna Strategic Square South Tower, Level 30, Jl. Jend. Sudirman Kav. 45, Jakarta 12930, we serve clients across Indonesia with comprehensive services tailored to your needs.

For a free consultation and more information, contact us via phone or WhatsApp at 0813 1114 2228. Trust the experts for your due diligence needs, and ensure every step of your transaction proceeds securely and smoothly with SIEMA KONSULTAN.

For more information

Please visit:

www.siemakonsultan.com

Jakarta Office:

Sampoerna Strategic Square

South Tower Level 30,

Jl.Jend.Sudirman Kav.45

Jakarta Selatan – DKI Jakarta

Bali Office: 

Jl. Cokroaminoto No.212,

Ubung, Denpasar Utara,

Bali – Indonesia

Contact Us:

Imam Budiharto
imam@siemakonsultan.com

Telpon: 021 2992 7844

Whatsapp: 0813 1114 2228