Digital signature
Corporate Securities Info

Digital signature

Time was when business agreements and letters were written on paper, signed by the parties and hard copies delivered to them. For good measure, they had to be stamped “received” and dated by the receiving party.

With the advent of the internet, that practice has ceased to be standard operating procedure in many business transactions.

Today, email and short messaging service (SMS), or text messaging, are considered acceptable means of communication in local and international business circles because of the ease and speed in using them and, most importantly, the savings on paper and delivery services.


On condition that they are capable of independent authentication or verification, the contents of email and SMS can be presented as evidence in court if they are relevant to the subject of a litigation.


Unlike written documents that can be made to disappear or conveniently mislaid, email and SMS have “footprints” that, to some extent, allow their recovery even if they are deleted by their sender or recipient.

Under ordinary circumstances, putting the name of the sender of an email at the end of the message is sufficient to establish the identity of the person or entity that sent it.

If a sender wants to put some flourish or a personal touch on the email, he or she can attach his or her digital signature.

In some cases, when time is of the essence in getting some important documents signed and quickly submitted, digital signatures are used on their soft (or computer) copy and then printed as if they were personally signed by their signatories.

The persons or parties to whom digitally signed documents are submitted can accept them at their face value and consider them as having been validly executed or signed. Those documents are valid and binding on the contracting parties. Besides, they would not know the difference and often couldn’t care less.

Convenient or practical digital signatures may be, there is a hidden dark side to their use.


In the hands of a computer geek, they can be manipulated to, among others, forge signatures in financial documents, make solicitation letters look authentic and spread false information or defamatory statements under the name of a person who has a reputation for integrity.

By the time the forgery is discovered and the authenticity of the digital signatures publicly disowned, the scam has been consummated or serious reputational damage has been done to the person or party to whom that document was directed.

To avoid the adverse consequences of the misuse of digital signatures, there is a growing practice by companies that are required by law to publish in newspapers notices in regard to some of their actions or regulatory orders pertaining to their operation, to cover or blacken the signatures affixed in those document, including that of the notary public.

Depending on the subject of the notice, the signatories are usually high ranking corporate officers whose signatures can bind the companies they represent.

So what remains to be seen in the notices are either the printed name of the signatories or the positions they hold.

Covering the signatures prevents, or minimizes, the possibility of the signatures being forged and used for unauthorized or illegal purposes by scheming third parties.

Since the documents on file with the government office concerned bear their signatures, their publication with the blackened signatures is considered substantial compliance with the publication requirement.

In this age of false news and rampant disinformation, it makes good business sense for business executives to take appropriate measures to prevent their names or signatures from being used to scam other people.

As the saying goes, there’s a sucker born every minute and scammers are very much skilled in exploiting that naiveté to their advantage. INQ

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TAGS: Business

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