Personal/Corporate Due-Diligence, Business-Deal, Real-Estate Investigator Konfirma Reports 45% Growth, Offers Bilingual Services

Medellin-based, national corporate-and-individual risk-management, due-diligence and real-estate investigator Konfirma announced August 29 that its first-half (1H) 2018 revenues grew 45% year-on-year — and the company expects full-year 2018 revenues to rise about 40% year-on-year.

In an August 29 interview with Medellin Herald, Konfirma general manager Sergio Jaramillo Mejia added that upcoming anti-corruption legislation — backed by newly elected Colombia President Ivan Duque as well as Colombia’s main political parties – could very well provide a further boost to revenues in future years.

Konfirma has been involved in numerous Colombian “fourth generation” (4G) highway construction projects as a real-estate-value investigator-and-negotiator, including three such projects in Antioquia: “Pacifico 2,” “Mar 2” and “Conexion Norte,” Jaramillo revealed to us.

Beyond highway-corridor, public-transit and transmission-network real-estate services, Konfirma also offers reputational, financial and legal-history investigative services for both individuals as well as companies considering real-estate acquisitions, corporate acquisitions, business launches, employee hires or business partnerships. Investigative services also can probe a candidate company (or an individual) on relevant experience, quality, security and workplace safety.

For foreign investors, Konfirma also has bilingual staff available, Jaramillo told us.

Such specialized services are especially important in Colombia where anyone (qualified or not) can be a real-estate agent, where mortgage insurance isn’t yet available, where Colombian property-ownership laws and enforcement still lack clarity, where fiduciary obligations are weak, where certain properties earlier might have been seized illegally by criminal or guerrilla groups, or where government-dictated land restitutions to prior owners might be underway.

Hence investors can run huge risks by investing in properties, businesses or persons that may have criminal, illegal or irresponsible histories, Jaramillo explained.

One current example is the “Meritage” commercial real-estate development scandal near Medellin, where both Colombian and foreign investors have lost millions of dollars following the seizure of the Meritage property by Colombia’s Attorney General.

That seizure was the result of the property’s alleged ties to mafiosos (see Medellin Herald on February 02, 2018, “Colombia Supreme Court Ruling: Fiduciaries Hardly Protect Real-Estate Investors.”)  Now those investors are suing the Attorney General in an international tribunal, aiming to recoup their lost investments.

While it’s unclear what Corficolombiana (the fiduciary for the Meritage project) did or didn’t do to discover criminal-history issues — and thus help avoid investor problems with the Meritage project — it’s conceivable that the sort of “deep” investigations in which Konfirma specializes could have discovered problems in time to avoid investor losses, Jaramillo explained to us.

Unfortunately, Konfirma – Colombia’s largest-such investigative services company, owned equally by the Medellin Chamber of Commerce and by local “e-commerce” specialist Cadena — wasn’t hired to investigate the Meritage project.

While Konfirma can’t offer guarantees that its “deep” investigations always would discover and hence avoid disasters like Meritage, its investigative techniques and studies nevertheless could give investors greater peace-of-mind than just the routine “certificate of tradition and freedom of the property” (“certificado de tradición y libertad del inmueble”) studies performed by realtors or fiduciaries, Jaramillo added.

Konfirma’s services also include due-diligence on companies seeking to bid on government-supervised or regulated projects, such as the “4G” highways and electric-power transmission corridors. Such services include investigations into experience and qualifications, as well as possible money-laundering, bribery, terrorism links or other legal problems that might involve candidate companies, individuals, potential employees, suppliers and counter-parties, he explained.

While Konfirma may be best-known for its government- and corporate-client services — with some 112 such clients so far in 2018 — the company also offers investigative services for even the smallest investors, such as those considering buying an apartment or house, he added.

One such corporate client – Colombian fiduciary Fiduprevisora – recently tapped Konfirma to investigate health-insurance plan options for a national teacher’s organization. That investigation analyzed more than 205,000 documents and helped the organization guide its decisions, according to the company.

For various clients, in 2017 alone, Konfirma analyzed 460,000 data sources — and discovered that nearly 25,000 (4.8%) of individuals or counter-parties investigated presented reputational or legal risk, he revealed. Unfortunately, in Colombia, “there’s a relatively high level of illegal activity,” which puts investors at greater reputational and business risk, he said.

What’s more, corruption is now estimated to be robbing Colombia of an estimated 8% of gross domestic product (“PIB” in Spanish initials) – money that could better be directed for all sorts of social improvements including education, health and infrastructure, he added.

Since its launch eight years ago in Medellin, Konfirma has since expanded its operations to some 40 major and smaller cities in Colombia (including Bogota) and is now planning expansions to nearby South and Central American markets, initially in conjunction with expansion plans by Colombian-based companies, he said.

Among its numerous major corporate clients here are EPM, Isagen, ISA, Metro de Medellin, Sura, Proteccion, Bancolombia, AngloGold Ashanti, Antioquia Gold, Coninsa Ramon H, Exito, Argos, Goodyear, Grupo de Energia de Bogota, PIO, Comfama, Agencia Nacional de Infraestructura and ANDI (Colombia’s national industrial trade association), according to Konfirma.