Controversy deepens around DD firm as CBI vetting practices come under wider scrutiny

A growing controversy surrounding SR-M Intelligence & Risk Consulting is now threatening the wider Citizenship by Investment (CBI) industry. This comes after an ongoing legal dispute and increasing concerns about the firm’s due diligence standards are coming to light.  

Globally, there are seven countries which operate the Citizenship by Investment Programmes, five of which are located in the Caribbean. Sources claim that one of the seven countries has already taken the step of blacklisting SR-M as a due diligence provider.   

The decision was reportedly based on concerns that the firm failed to meet required investigation standards which included the verification of documents with local authorities of the applicants and the undertaking of in-country or field-based checks. 

Sources indicate that SR-M’s vetting process relied heavily on online research and desktop reviews rather than comprehensive and on-the-ground investigations. Critics argue that this approach does not meet the international standards for due diligence on applicants seeking second citizenship.  

With one country already blacklisting SR-M, experts say that it is likely that other CBI-offering countries are expected to follow the trend.  

Industry experts further warn that inadequate due diligence poses a direct threat to the integrity as well as sustainability of CBI programmes. When background checks fail to properly authenticate documents, verify sources of wealth or independently verify an applicant’s personal and business history, experts say that the risk of admitting individuals who may present legal, financial or reputational risks increases significantly.  

Further concerns have emerged around outstanding payments allegedly owed to SR-M by certain CBI-participating governments. According to reliable industry sources, some governments are now considering blocking or withholding these payments. This comes after some contract related issues as sources say that SR-M failed to disclose in their contracts that commissions would be paid to individuals within CBI units.  

SR-M is currently in a legal case with Chorex Consultants Limited before the London Circuit Commercial Court where allegations have been raised regarding improper conduct linked to CBI due diligence contracts. While the matter remains before the court, the case has intensified scrutiny of SR-M's operations and the broader vulnerabilities within CBI vetting systems.  

While the legal proceedings involving due diligence firm SR-M continues, the controversy has already casted a shadow on the CBI industry as a whole. As one senior industry source put it, “In today’s environment, a single weak link can damage not just one programme, but an entire region.”