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Business Booms for Corporate Investigator

Ray Chan
Central Business Information (CBI) President Ray Chan says the company has offices in Beijing, Shanghai, Guangzhou and Xi’an in addition to its Hong Kong headquarters

Twenty-two years ago, the city was buzzing with anticipation as the transfer of sovereignty drew near. That same year, in 1996, Central Business Information (CBI) set itself up in Hong Kong at just the right place and the right time. CBI investigates firms for potential investors as part of the due-diligence process, making sure the business is sound and all the numbers add up before the stake purchase, merger or acquisition goes ahead.

No sooner had CBI begun operations in 1996 than the flood began – Mainland Chinese companies poured south for initial public offerings (IPOs), creating ample work for a firm whose core business is assisting sponsors to perform due diligence on listing candidates.

CBI President Ray Chan said the company’s position in internationally focused Hong Kong goes hand in hand with its extensive presence in the mainland in driving its core business – conducting due diligence on mainland companies for its clients, which are often international investors. 

CBI has offices in Beijing, Shanghai, Guangzhou and Xi’an in addition to its Hong Kong headquarters. The company also has investigators in 57 mainland cities to carry out the investigations, Mr Chan said. High costs in the first-tier cities led the company to site its production centre in Xi’an – which happens to be China’s ancient capital and starting point of the original Silk Road.

Greater Bay Area

CBI was established shortly before the change of sovereignty for Hong Kong

The central government’s drive to integrate Hong Kong into the Guangdong-Hong Kong-Macao Greater Bay Area has also generated a great deal of activities for CBI, Mr Chan said. The project involves much infrastructure investment, such as the Hong Kong-Zhuhai-Macao Bridge and High-Speed Rail link, in addition to intense investment activities in the nine Guangdong cities.

CBI has seen a big rise in demand for their due-diligence services from professional clients such as certified public accountants (CPAs) lawyers, bankers and financial institutions, he said. These professional clients need CBI’s services when conducting due diligence on mainland firms.

Another government programme that has created a great deal of business for CBI is the Belt and Road Initiative, Mr Chan said. In addition to its intensive operations in Hong Kong and the mainland, CBI has a presence in 214 economies on all continents, enabling it  to supply detailed information on any of these economies’ local conditions and legal systems.


Authorities worldwide have applied stricter regulations on the financial industry, especially following the financial crisis which broke out in 2008. Individual and corporate investors have become much more cautious recently and are looking for measures to prevent losses. Companies in their turn have put a lot of effort into complying with regulations, in many cases appointing a chief compliance officer. This had increased demand for the depth of regulatory knowledge CBI could offer clients, Mr Chan said.

Hong Kong’s Securities and Futures Commission (SFC) had revamped its approach in the past two years, which in turn drove demand for CBI’s compliance and due diligence services.

“The SFC has switched from a passive to an active approach,” Mr Chan said. “Previously they would wait for problems to surface but now the SFC runs ahead of the problems.

“For example, with IPO approvals, previously Hong Kong Exchanges and Clearing (HKEX) would run the approval process and the SFC would only come in at the end. Now HKEX and the SFC work simultaneously, taking front-end and real time regulatory approach,” Mr Chan said.

Another regulatory change – allowing biotechnology firms in the pre-revenue phase to apply for listings – posed a challenge for CBI because traditional approaches to evaluating companies and performing due diligence did not work with such young enterprises working on complex technologies. Mr Chan said biotechnology firms were completely a different landscape, with key new areas including patent and investors’ background. Investors in biotechnology companies had to be knowledgeable in the field to properly assess a company’s prospects.


The trade dispute between the United States and the mainland, along with a sharp increase in many countries’ regulatory scrutiny of merger and acquisition (M&A) deals involving mainland companies, had also affected CBI.

“In the past nine months, several M&A deals have been cancelled including those in Malaysia, Germany and Australia,” Mr Chan said.

To safeguard their US market, many clients wanted to move their production facilities out of the mainland and into other countries such as Vietnam, Cambodia, Thailand or the Philippines. They asked CBI to investigate potential production countries, looking into such issues as the local economies, politics and infrastructure.

Big Data

CBI had invested a great deal in information technology (IT) as the amount of information that can be cheaply stored and retrieved has shot up, Mr Chan said. The IT revolution had a strong influence on information providers, he said: “From print to microfilm, digital to internet, hard data to cloud platform, technology is working its way.”

Big data posed a challenge to CBI – many prospective clients questioned why they should use a business information investigation service provider when they could access such a wealth of data themselves. But the data revolution also brought opportunities, Mr Chan said – the massive amount of data required analysis and filtering for valuable intelligence, and CBI can help them with this.

The data flood has led clients to demand rapid, efficient service. CBI uses artificial intelligence (AI) to automate data processing and has set up a Business Lab for research and development. A team of programmers in Xi’an develops internal information infrastructure and applications.

Mr Chan said CBI is set to launch an integrated collaborative platform on which clients can access information directly. The firm will hire a chief information officer to handle the architecture of this platform. CBI needed to plough substantial resources into big data to maintain its competitive edge, he said.

Related Link
Central Business Information (CBI)

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