Wall Street firms are increasingly turning to former spies and enforcement officials for doing background checks on emerging markets companies in which they want to invest. Not only Wall Street firms, but also rating agencies are known to use private investigators on rare occasions. Richard Gugliada, a managing director at Standard & Poor's, told wire services that his firm "used investigators to check up on managers in young private companies that are first-time issuers of certain types of securities." 

     The need arose because in the early 1990s the emerging markets were so hot that most Wall Street firms invested in companies without doing due diligence. But much to their dismay, they later discovered that good governance was sorely lacking in these companies. So, not surprisingly, now they are beating a path to firms such as CTC International Group, Strang Hayes Consulting and Kroll Associates, which specialise in background checks. These firms in turn are hiring spies and enforcement officials from agencies such as KGB, the US Drug Enforcement Administration, the CIA, British intelligence, the FBI of the US and Internal Revenue Service. 

     Robert Strang of Strang Hayes Consulting feels that spies and enforcement officials are best bets for background checks. "You need international contacts and the only way to get these contacts is to have a background in this business," he says. Once retained, these sleuths make it their business to pull any skeletons out of the cupboards of companies such as undisclosed bankruptcies, fraud, misrepresentation of assets and ties to organised crime. So the next time any Indian company goes to the US for funds, it should expect a visit from not James Bond, but someone in the same trade.