A month into its plan to sell J.D. Power to Hong Kong investment firm XIO Group through an offshore private equity fund, the seller, S&P Global Inc., admitted via email that it was unsure about who owned the firm and the source of its funding, The Wall Street Journal reported Wednesday.
Now, XIO is mired in disagreements over where its funding came from, the Journal says. Employees say they had limited knowledge about the source of XIO's funding, while some advisers to XIO received contradictory accounts, the paper reported.
"If legitimate companies like J.D. Power are being bought up or interacting with anonymous companies, it opens the door to increased liabilities about which we have no idea," Gary Kalman, executive director of the Financial Accountability & Corporate Transparency Coalition, a Washington nonprofit that campaigns against corruption, told the Journal.
S&P Global announced in April 2016 that it had agreed to sell J.D. Power to XIO, "a global alternative investments firm."
XIO would handle the purchase using a fund based in the Cayman Islands, which doesn't require firms to publicly disclose their investors, the paper reported. It was during the following month that S&P Global asked XIO for its ownership and funding details as the seller prepared to secure U.S. government approval for the deal, according to emails reviewed by the Journal.
XIO acquired J.D. Power from S&P Global on Sept. 7, 2016, for $1.1 billion.
