Tunneling of the Czech companies professionally

In the year 2011, during the solution of problem receivables from some Czech debtors KUPEG identified a growing number of professionally tunneled companies.
Unlike individual isolated cases we noted in the past, today we face a whole strings of companies that were destroyed by a specialized company or person.

Scheme

The winding up procedure usually takes place in three steps

1. Medium and smaller company which has been functioning for a long time and which does not show financial problems. The company owner decides to sell and dispose of the company.
2. The company buys a specialized company that dominates company´s statutory authorities. Usually by this moment the company ceases to communicate, to pay, to work…
3. After one to two months, the company is further transferred to the White Horse where it remains

Risk

This procedure is very risky especially since liquidated company in any way does not indicate problems or intention to close down. It works quite normally till the last moment.

• The company is relatively stable
• It has history and traditional supplier and customer relationships

Prevention

Against that scheme a creditor protection is very difficult. Standard stability analysis of the company not reveal similar threat. The only prevention is the care and attention in the realization of each transaction:

• Close contact with the owners of the customer. In addition it improving business relationships, it can help to detect changes in behavior and show the threat.
• If your business partner with whom you normally communicate is at once unavailable or refuses to meet, it is a warning signal.
• Sudden change in ownership of a business partner may relate to the described scheme.
• Especially if you also receive an extraordinary order.

The described approach can slightly reduce the risk of becoming victims of such a procedure. The most effective tool to minimize the possible losses is insurance.