What should novices pay attention to when doing due diligence on non performing assets?

Generally speaking, during due diligence, efforts should be made to understand the relationship between the parties involved in the project and their specific circumstances, and it is not possible to rush to conclusions about the project without questioning. Treat every information inquiry and data collection seriously and responsibly, and comprehensively analyze the possible risks of the project. If you feel that your due diligence skills are not mature enough, you can search for "Tejinhui" and register as a certified special broker, which will have perfect online due diligence training and professional due diligence report templates.

1Q] What are the principles of due diligence?

1A] There are generally three principles of due diligence: (1) the principle of prudence; (2) confidentiality; (3) The principle of objectivity.

2Q] What is the specific content of the prudential principle?

2A] The prudential principle means that the scope of due diligence should be as comprehensive as possible, adopt a reasonable skeptical attitude towards the information provided by the information provider, cross-verify the information through other channels, and judge the validity of the materials based on legal facts.

3 Q] What is the specific content of the principle of confidentiality?

3A] The principle of confidentiality refers to the confidentiality of the debtor's relevant information and the company's internal information (especially valuation information).

4 Q] What is the specific content of the principle of objectivity?

4A] The objective principle refers to the overall consideration of acquisition and disposal, and the judgment of the value of the asset package based on objective information and legal facts.

5Q] What are the roles and perspectives of due diligence?

5A] Due diligence is the basis of valuation and pricing, acquisition decisions and disposal strategies, which requires legal due diligence as the basis of work, especially to confirm the legal effect of relevant rights, obtain information through file reading, interviews, surveys and inquiries from relevant departments, focus on the legal status, physical status, business situation (repayment ability) and willingness to repay the relevant assets and debtors, and finally classify and sort out the materials to corroborate each other. For those with a large amount of asset package information accumulation, the method of resume information database can be adopted to provide information verification for the acquisition and disposal of non-performing assets in the later stage.

6 Q] What are the methods of due diligence?

6A] Due diligence is mainly based on on-site investigations, supplemented by off-site investigations, and supplemented by external investigations when appropriate. The survey methods are divided into three methods: comprehensive survey, focused survey and sample survey.

7 Q] What is the specific content of off-site due diligence?

7A] The main objective of off-site due diligence is to ensure that the appropriate dossier is authentic, complete and valid. Including loan and guarantee related information: whether the debt and guarantee relationship exist and are valid; Information related to the collateral:

8 Q] What is the specific content of on-site due diligence?

8A] The main purpose of on-site due diligence is to properly verify the relevance and authenticity of the data. Loan bank, debtor and related visits: the debtor and the guarantee company's business status, assets, etc.; Collateral Site Survey:

Clarify the location, basic situation, surrounding facilities, property and actual utilization of the collateral; Comparative case verification: For example, the surrounding similar assets** are used as a reference when valuing the collateral.

9 Q] What is the specific content of external due diligence?

9A] The main purpose of external due diligence is to verify the information of file reading and on-site investigation. Comprehensive interviews and field surveys, comprehensive analysis and cross-validation of industrial and commercial institutions, taxation, courts, banks and peers.

10 Q] What is the specific content of the comprehensive investigation?

10A] Comprehensive investigation is a separate investigation of each item in the asset package, which is suitable for the situation of a small asset package;

11 Q] What are the key contents of the investigation?

11 A] The key investigation is to select representative large creditor's rights, important collateral claims and important real equity assets that can reflect the overall situation of the assets for investigation;

1. The purpose of due diligence.

Non-performing assets refer to financial non-performing assets, which refer to subordinated, doubtful and loss-making loans held by banks, financial non-performing loans acquired or taken over by financial asset management companies, and non-performing loans held by other non-bank financial institutions.

The main task of the lawyer in the due diligence of the disposal and acquisition of non-performing assets is to make full use of its professional skills to investigate the legal existence of the main debtor and the guarantor through open channels, to check and understand the major property situation of the principal debtor and the guarantor, to find out the litigation stage, execution status and other relevant information of the realization of the claims involved in the litigation, and to review the case file materials of each claim to make a detailed review of the legality of each loan claim and the various types of secured claims attached to it. The validity and legal defects are determined by professional law, and the solvency of each debtor, the possibility of realizing the creditor's rights and the degree of realizability are judged, and the dossier materials and legal basis related to debt repayment are provided for the client to reasonably determine the value of the creditor's right.

The direction of due diligence of non-performing assets is classified into the following two categories:

The first bend is to adjust the debt assets. According to the revitalization criteria, both the borrower and guarantor at the first level (the first-level debtor) and the second-level new debtor (the second-level debtor) must have debt-bearing assets.

Second, due diligence of new debtors. In the case that the first-level debtor is unable to bear the debt, we need to find a new debtor, and the evidence and legal basis for the due diligence of the new debtor is the main direction of due diligence.