Management & Shareholder Verification

To enhance the integrity of financial and related services such as banking, payments, licensing, money transfer, and sponsorship, it is vital for due diligence officers to meticulously verify the identities and associations of individuals mentioned in any relevant applications. This step is crucial to prevent fraudulent activities, identity theft, and to ensure compliance with legal and regulatory standards. Here’s an expanded version of the document checklist for verification:

  1. LinkedIn Profiles: Request the LinkedIn profiles of the individuals involved. These profiles should clearly show their professional association with the company in question. This helps in establishing their current and past professional engagements, thus providing a background check.
  2. Signed Employment Contracts: Employment contracts, duly signed, serve as a formal proof of the individual’s employment status with the company. This document should detail the terms of employment, job role, and duration of employment, which aids in confirming their current position and responsibilities within the company.
  3. Recent Pay Slips: Collecting pay slips from the last three months offers a short-term financial history of the individual, indicating their consistent income from the company. This is a standard practice in financial due diligence to authenticate employment and income claims.
  4. Email Verification: Request a screenshot showing the individual’s email address within the company’s domain. This is to ensure that the individual is currently associated with the company and has been assigned a formal company email address.
  5. Tax Deduction Documentation: Proof of taxes deducted from salaries and subsequently deposited is important. This not only confirms their employment but also provides insight into their financial responsibility and compliance with tax regulations.
  6. Sweat Equity Documentation: If the application involves sweat equity, a signed and apostilled copy of the Registered Shareholders Agreement is necessary. This document is crucial to understand the equity distribution and the terms under which it was granted, ensuring that the equity stakes are legitimate and legally acknowledged.
  7. Identification Documents: Finally, copies of passports and government-issued IDs should be collected. These documents are the most basic yet crucial for identity verification, helping to cross-verify the information provided in other documents.
  8. Liveliness Test: This is an additional step to confirm the physical presence and current existence of the individual. It involves real-time verification, typically using video conferencing or a secure online portal. The individual is asked to perform a series of actions in real-time, such as blinking, smiling, or turning their head, to demonstrate their presence and distinguish them from static images or pre-recorded videos. This test is crucial to prevent identity fraud, where someone might attempt to use stolen or fake identity documents. It ensures that the person presenting the documents is indeed the person they claim to be and is currently alive and actively involved in the application process.

    The liveliness test is a powerful tool in the digital age, providing an additional layer of security and authenticity to the verification process. It’s especially relevant in remote or digital interactions, where physical presence is not feasible. By integrating this with traditional document verification, due diligence officers can achieve a more robust and foolproof verification process.

Collectively, these documents form a comprehensive dossier for each individual, facilitating thorough scrutiny and validation of their association with the company. This rigorous process is essential to safeguard the financial services industry from fraudulent practices and to maintain trust and credibility in the system.

This page was last updated on November 23, 2023.

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