Corporate Secrecy and Red Footed Boobies

The Cayman Islands is a British Overseas Territory, comprising three islands in the western Caribbean. Best known for beach resorts, scuba diving, snorkelling sites, deep-sea fishing, endangered iguanas, red-footed boobies and corporate secrecy.

To date only limited information has been available about companies registered in this Caribbean idyll, typically a brief summary of registration details.

UK government’s requests to a number of British Overseas Territories to develop fully public registers of ownership have traditionally been met with reluctance by the government of the Cayman Islands, concerned about the privacy of beneficial owners. Now however there are plans to introduce a beneficial ownership register that seeks to strike an acceptable balance between transparency and privacy. The UK government has accepted the compromise proposed by Cayman.

The forthcoming legislation will require certain Cayman Islands companies to be included on the UBO (ultimate beneficial ownership) Register. It will list those who ultimately own or control more than 25 per cent of the equity, or voting rights or have the right to appoint or remove a majority of a company’s directors or LLC managers. Intermediate holding companies, through which other companies may be held, may also be listed.

The proposed system will allow the UK government, and other foreign authorities and Cayman domestic bodies with agreements in place, to access a UBO Register, via a Competent Authority i.e. any person or organisation that has the legally delegated authority to perform this particular function.

The register will not be publicly accessible, unless and until such access becomes an international standard.

So, one small step forward for law enforcement agencies in their fight against tax evasion and money laundering, but no great leap forward for those businesses involved in international trade who need to Know Their Customers. One wonders whether such a regulatory regime has a more or less promising future than the boobies and the iguanas.

BVD and Armadillo – Document retrieval, super-fast turnaround times and the dark practice of share-raiding

12 May 2017

By Alistair King, content manager, Bureau van Dijk
1977 was, like most, a year of mixed fortunes.
While Elizabeth II celebrated her silver jubilee and Star Wars was released, it also saw the deaths of Elvis Presley and Charlie Chaplin.
But for Emmanuel “Manny” Cohen, 1977 is remembered as the year he started in business – making 2017 his ruby jubilee.
“Today I celebrate 40 years as an entrepreneur,” he wrote on his blog on 6th January. “Always interesting, never boring. I wrote out a list of businesses that I have either started and dropped or am still doing. Amazingly it came to 40! From health screening and photography to business information and a law firm. I’m still at it.”
And it’s through business information that Manny is associated with Bureau van Dijk.
His company document retrieval service – built and maintained by aRMadillo, a company he owns and chairs – has been a feature of Orbisfor several years.
But for our latest Orbis release, which went live last month, we’ve reengineered it, making it more prominent, accessible and easier to use, something that Manny sees as a “really exciting development”.
To discuss aRMadillo’s offerings and find out more about the man behind them, I met Manny at our offices a few weeks ago.
The first thing that strikes me is how young he looks for someone with such a long professional backstory. You must have started when you were barely out of school, I suggest.
“Yes, I was 19,” he says. “I worked as a researcher for RM [the company his father started, recently rebranded as aRMadillo]. I’d spend my early days sorting through documents at Companies House – hard files, paper, then microfilm.”
Technology moved on to disks and then online but Manny had long since risen in the company, focusing – among other things – on building a team that would deliver a super-fast and reliable reports-on-demand service.
You can order documents directly from aRMadillo. But users of Orbis, our database of around 220 million private companies across all countries worldwide, can order documents through our platform. This keeps their research processes in one place, making things run more smoothly. Charges apply only for the documents requested.

Reintroducing the Orbis document ordering module

The Document ordering module is available from Orbis’s Tools page.
Through this module, you can obtain documents such as annual reports, shareholders’ details, certificates of incorporation, and so on, for any company you are researching.
A crucial point to note is that in certain types of compliance and third-party due diligence, researchers must obtain copies of original documents.
This is one of the main things that this module delivers – and, according to Manny, it safeguards against risks such as document forgery by going through an official source.
What’s more, if you enter a company name into the quick search or the name search of Orbis and your chosen company cannot be found, you’re prompted to use the Document ordering tool as an option.
Given the many millions of companies already on Orbis, catering for that pool – not to mention extending beyond it – must mean that Manny has had to develop a huge and intricate network, as aRMadillo doesn’t hold these documents or scans of them itself.
So, is that at the heart of Manny’s operation?

Global network and broad expertise

In a word, yes.
Manny tells me that aRMadillo can source and supply company documents from anywhere in the world, accessing up to 1,000 registries in more than 200 countries. They can reach most jurisdictions in less than an hour, he says, assisted in part by a network of “more than 50 associated offices, a multilingual team and inhouse solicitors,” both those working in document retrieval and as part of RM Group’s own law firm.
“All of our documents are sourced directly from official sources – where they physically scan the original documents – so you can be sure of their provenance,” Manny adds.
It’s a tough process, as Bureau van Dijk’s own network of information providers will attest from their dealings with the many registries around the world.
Manny points out that “while there’s one central registry of companies in the UK, there are 50 in the US, 28 in Brazil and 32 in Mexico,” for example. “People assume that because it’s so simple here [in the UK], it must be as easy elsewhere,” says Manny. “It isn’t.” But the company has been building this network since 1973, so it knows how to navigate the variable terrain.
Of course, it might be (relatively) simple in the UK for a reason – or reasons.
One of them – cultural – we discuss in our white paper, Untangling the world of private company information.
But it’s also a question of necessity. And here we slip into another area of Manny’s expertise.

Global company formation services

On top of company document retrieval, aRMadillo helps new companies register themselves.
It’s quite an involved process, and through his dealings Manny has made a couple of related observations: the UK is perceived to be relatively incorruptible, hence a disproportionately high number of companies registering with the UK’s Companies House; and, so he suggests, judicial corruption in many countries that he’s reluctant to name can force non-British business owners to register their businesses in the UK simply to guard against “share-raiding”.
This dark practice involves the bribery-induced shifting of ownership on the official records. Registering elsewhere can significantly reduce this risk.
I decide to round off with a more innocent question: why the strange typographical style in “aRMadillo”?
“Well, it just looks more like an armadillo that way,” says Manny.
It’s hard to argue with that. If only everything were as simple.
Here’s to your next 40 years in business, Manny. Let’s catch up in 2057.