ZENON Partners

Financial growth for foreign investments in Asia

Financial solutions for your peace of mind

Business Diagnostics

When we conduct a due diligence on your subsidiary, business unit or joint venture you own a share in, it is a comprehensive deep-dive into the governance, financial performance and transaction analysis with key business partners it does business with.
Our due diligence not only reveals the root cause for performance findings, but also provides insights into changes that are due. We look what is behind the numbers and the decisions that were made. Our due diligences are delivered for the purpose of giving you insights to make decisions.
As Western capital owners have increasingly invested in Asia, they often overlook the implications of governance gaps when running their local businesses. The result is that the financial performance of Asia-located operations is increasingly impacted by conflicting interests of those in charge on the ground.
ZENON Partners focuses on revealing embezzlement of assets and cash flows that belong to your subsidiary, joint-venture or portfolio company. According to the Association of Certified Fraud Examiners, most perpetrators of fraud are in an executive role when they engage in fraudulent activities. From our perspective, foreign investors often react too late and only after they have received a hint from whistleblowers through email or a phone call. ZENON, instead, can quickly see suspicious financial activities and transactions based on our experience from having looked at hundreds of cases in Asia.
Our fraud investigations aim at identifying performance impairing practices, design of governance changes and implementation of those by our team, to create quick, measurable financial improvements subsequently.
We provide CFOs, family-owned companies and private equity investors with a financial diagnosis of a subsidiary/portfolio in a way that they will never obtain from their own finance and/or controllers team.
We can see and say things which subordinates cannot. When we provide a financial diagnostics report, it provides a holistic view at how decision making is done and how the financial performance is to be assessed in the local/industrial context.
Finance team members of corporate organizations often only know their own organization at Headquarters well but struggle to see their own subsidiary in the local context or they might not dare to report critical findings.
In many of our cases, a financial diagnostics exercise is the start of a journey to a comprehensive change management to boost financial performance.
One of the largest areas for capita expenditures of foreign investors in Asia are new plants or premises. The ZENON team includes seasoned architects from China and Europe who have inspected factories and other commercial structures for our clients.
Whether you want to be able to assess the viability of a local construction proposal or a due diligence on a constructed building to make sure it was built according to specification makes a fundamental differences to whether what is recorded in your balance sheet is what it is or whether conflicting interests have caused over charging.
With our combined knowledge of all major accounting standards, local practices and technical expertise, we can create a substantial value to your capex plans.

Book a call

Financial Growth

Many foreign investors are increasingly facing declining profits and liquidity with their subsidiaries in Asia, particularly in China. Our experience with such cases shows that changes of the competitive or regulatory landscape are not the main reason for this trend. In fact, governance issues and oversight gaps have allowed unfavorable management decisions to unfold locally.
We are familiar with the root cause for impaired financial performance of Asia-based operations. Whether undetected conflicts of interests or unethical conduct, we find the source of the issue.
In all previous cases we worked on, we were able to identify the reasons for underperformance, design and execute a change process. After our business recovery, profits and liquidity increased again.ption text goes here
Many clients are helplessly facing declining cash flows of their operations in Asia. In many cases, foreign investors are unable to distribute profits through dividends, either because there is not sufficient liquidity to do so or because they face resistance from their local management team if they want to declare dividends. Misaligned performance measurement and lack of governance create wrong incentives for the local management team to generate cash flows and let liquidity go to the mothership.
The lack of sufficient insight makes it impossible even for large corporates, to increase profitability and liquidity to create dividend potential.
We are familiar with the common practices which prevent cash profits to be generated and distributed. After we have conducted a thorough diagnosis why profitability and cash flows are insufficient, we design and execute a change plan for the governance and business transactions practices. We initiate the necessary board decisions and formalities to declare dividends.
Contact us if you wish to find out more about our track record how we have created dividends for our clients.
Joint Ventures (JV) are challenging everywhere and not very common in Western countries. With the large FDI flows from developed countries into Asia, local players and influential groups are often favored by forcing foreign investors to team up with them to do business in a certain Asian jurisdiction. This has created a significant number of ailing JV which do not perform well, particularly not for the foreign shareholder. Because dysfunctional JV usually do not have their root cause in legal issues but commercial misalignment, to tackle the recovery from a legal perspective is usually not effective, but very costly.
Team members of ZENON Partners have been involved in 50+ JV transactions, including formation, buy-out of one JV partner or financial conflict resolution.
We have enabled several clients to mitigate their JV issues and even leave JV with a considerable financial outcome. If you have a share in a JV that has outlived its commercial purpose and is now a constraint to your financial and management resources or a ticking time bomb in your balance sheet, we would be happy to engage in a conversation with you how to stop this disruption and turn it into a successful sale or buy-out or restructure the JV to rejuvenate the commercial usefulness to all shareholders.
A new investment in an Asian market might be the most promising option for your company. Starting from scratch without legacy issues and unwanted partners has numerous advantages and is now the preferred option by most foreign investors. These investments are called “green field” because investors can start with a clean slate.
Despite the challenges, we at ZENON Partners see numerous advantages of green field investments in Asia because mature markets, such as Europe and the US, have lost competitiveness in many areas, especially when it comes to manufacturing. We recommend that you develop the strategy in-house as your company knows its own products best.
Once your company has made the decision to launch a green field investment in a certain location, we assist you with designing the investment plan and governance that guarantee your control over that new investment. ZENON executes and monitors your investment. Everything else follows your strategy and governance model: tax, required audits, licensing etc. Do not let professional services firm take over control. It will delay reaching profitability and your investment plan will follow their agenda, not yours.
What matters is early cash flow generation, which we will enable you to achieve. Follow that order and you will always be able to react when things do not develop as wanted. Our team members live in the main Asian markets, and we have the local networks to execute your investments. ZENON behaves like shareholders with eyes on the ground, and we serve our clients exactly that way.

Book a call

Mergers & Acquisitions

ZENON provides financial and commercial buy-side due diligences to foreign investors who plan to acquire a company in Asia. Our M&A clients are typically family or private-equity owned and see us as their team on the ground. Thus, we conduct the due diligence and report about the findings as if we were the buyers.
Our due diligences are designed and conducted from the perspective of our clients. We look what is behind the numbers and commercial practices to understand what it means for the valuation when the potential acquisition target is owned by them.
Our reporting is to the point and conclusive so that our customers can use the due diligence findings directly as basis for their negotiations and to-do-list for changes post acquisition. This is very different from the sanitized language and disclaimer “gobbledygook” in reports prepared by accounting and law firms nowadays, which shy away from meaningful conclusions or practical recommendations to avoid any form of accountability.ere
Our clients are typically family-owned or portfolio companies of private-equity companies. What they need is a cost-effective outcome when the deal size is below USD 20 million. ZENON provides end-to-end M&A advisory services including due diligence, deal negotiations/SPA advisory and post-closing separation/integration for small-cap transactions.
ZENON team members have worked on more than 500 M&A transactions in the region during their professional career. We are well connected with capable, outcome-centric local lawyers and certified tax advisors so that we can deliver a cost- and time-efficient M&A process, where the various findings are integrated.
Deal terms for our clients are much better that way. It also avoids the inefficiencies of the common silo-approach, where various professional services providers deliver their content in an uncoordinated and out-of-context fashion to a deal team separately that is then left to make the best out of it.

Book a call

A message from Mike Braun, ZENON’s founder

ZENON specializes in financial recovery for foreign investments in Asia.

These are the areas where foreign investments encounter challenges to generate cash flows:

Local managers of foreign invested companies are often conflicted with putting their own interests above the financial performance of their employer. Excessive forms of “corporate welfare”, overstaffing and transactions with special interest groups locally at the expense of the company are common.
Overseas Headquarters often struggle to identify the magnitude of financial leakage due to governance conflicts. Their governance structure fails to see the cultural behavior gaps and to implement effective controls. Not being familiar with the details of local business practices, executives at Headquarters are often unable to understand reported financials or other information with sufficient depth.
Foreign-owned operations in Asia are notoriously exposed to incompliant behavior at their operations in Asia.
While awareness has been created among foreign companies who are subject to the US Foreign Corrupt Practices Act, the vast area of other, serious incompliant behaviors are often unknown at Headquarters.
Compliance violation of local tax, anti-trust or anti-bribery (commercial and governmental) legislation can trigger existence-threatening consequences in a jurisdiction or market.
Also often overlooked is behavior that causes financial damages to the company caused by embezzlement, kick-back practices, “ghost” employees or long-term contracts to favor outside parties related to the individuals working for your company.
Foreign investors are increasingly facing declining profitability across their operations in Asia. The reasons for that is often not understood at global Headquarters.
There are numerous reasons for this disconnect: insistence by HQ to apply processes that do not work locally, conflicts of interests, leadership issues on the ground, lack of understanding of regulatory factors, insufficient knowledge of local business practices or markets.
Foreign companies often underestimate the universe of red tape that exists in most Asian countries.
Audit requirements, special filings, endless numbers of licenses to be obtained (usually for a limited time period) corporate secretary requirements, various local levies and taxes, required minimum equity, local hiring requirements, allocation of annual profits to reserves, dividend taxes or currency controls are just the most common examples.
Foreign capital is often lured into a country without the investors knowing the details about Red Tape that can massively increase administrative costs or cause profits to be trapped there.
Another issue with Red Tape is that local management often uses the existing intransparency to avoid the execution of certain measures Headquarters wants to implement, such as operational restructuring or dividend payments.

Why choose ZENON over a Big 4?

The team that secures your future

Mike was with Deloitte’s financial advisory practice in Germany and China for over 20 years, 15 years of which as equity partner of the Greater China region.es here

Wolfgang Haselberger studied business administration and Chinese language in Germany and China. After graduation, his professional career began as Finance Controller in Shanghai for a subsidiary of a German stock-listed engineering company.

As a practitioner today he acts as a business consultant, board adviser, mentor and investor to high-growth businesses and start-ups particularly in the Fintech space.

Carlos has over 15 years’ experience in accounting, financial advisory and investment banking in the Greater China region with two major “Big 4” professional firms, multinational companies and banks.