Companies are formed by certificates of incorporation. Laws vary from one country to the other but the principle is that these documents that constitute a company are signed by at least one of its directors and filed with the registry office in the country where the company is set up. The certificate normally gives the date when the company was founded, its name, a unique number given to it by the registry and the identity of its owner.
A company is a legal person. That means that in the eyes of the law the company is like a fictitious human being. It can pay and be paid, it can enter into contracts, it can take someone or some other company to court and someone or some other company can take it to court.
It must also pay taxes.
That is why some countries have less strict rules about the way they register companies.
For example most countries put a limit on how many companies a single person can be director of without being its owner. That’s to make sure every director really knows what’s happening in their company and they can be held responsible for it.
And most countries ask who really owns the company and are not happy merely being told a company is owned by another company without asking who owns that company in turn. That is, they want to know who, ultimately, as a physical breathing human being really is the ultimate beneficial owner.
They put these rules down to make sure companies are not set up for people to avoid tax. Or to use their companies to use them for something illegal like fund terrorism or trade arms or drugs.
Now tax havens are less strict with this. Panama was notorious for it. And Mossack Fonseca was a legal office that used Panama’s relaxed laws in order to attract the custom of people from all over the world who wanted to hide their money: because they should not have had it or because they wanted to avoid paying tax on it.
Panama law required that all the companies within its registry had a Panamanian director. They didn’t care to check if the director was qualified for the job. There was no rule on that.
So Mossack Fonseca hired a bunch of poor, semi-literate people to allow them to use their names on the documents of the companies they register for their worldwide clients. Imagine them asking a little old lady from your street who struggles with her shopping list. They give her a little money and she lets them use her name and gives them a copy of their passport. She never really understands what they use it for but she’s happy getting paid for, apparently doing nothing. And, at least in her country that was not illegal.
Now remember the signature of the director is not only needed on the certificate of incorporation. It is needed for filed accounts, regulatory declarations, banking applications, contracts, court cases, and so on. Dozens of signatures for each company.
And these poor ladies of Panama where each directors of tens of thousands of companies.
The woman whose signature — allegedly forged — appears on the documents filed with the Aaron Bugeja inquiry into Egrant was director of several thousand companies. Her name is Jacqueline Alexander.
When the Panama Papers revealed what Mossack Fonseca was doing, it found that habitually Mossack Fonseca used copies of the signatures of the directors “they hired” rather than getting them to sign each paper individually. It just was not practical and nobody cared anyway.
Is this the alleged forgery that everyone is getting so hot under the collar about? If it is, it might actually suggest that the documents filed with Aaron Bugeja’s inquiry are more likely to be authentic than not.
Watch this video, in French, of journalists looking for a colleague of Jacqueline Alexander, Laetitia Montoya, whose name and ‘forged’ signature was also on tens of thousands of documents of tens of thousands of companies registered at Mossack Fonseca.
This will give you an idea of just where this great forgery might be coming from.