Good faith, use of position and use of information—criminal offences

Offence title:

Good faith, use of position and use of information—criminal offences

Act:

184 Corporations Act

Offence:

(1)   A director or other officer of a corporation commits an offence if they:

(a)   are reckless; or

(b)   are dishonest;

and fail to exercise their powers and discharge their duties:

(c)    in good faith in the best interests of the corporation; or

(d)   for a proper purpose.

(2)   A director, other officer or employee of a corporation commits an offence if they use their position dishonestly:

(a)   with the intention of directly or indirectly gaining an advantage for themselves, or someone else, or causing detriment to the corporation; or

(b)   recklessly as to whether the use may result in themselves or someone else directly or indirectly gaining an advantage, or in causing detriment to the corporation.

(3)   A person who obtains information because they are, or have been, a director or other officer or employee of a corporation commits an offence if they use the information dishonestly:

(a)   with the intention of directly or indirectly gaining an advantage for themselves, or someone else, or causing detriment to the corporation; or

(b)   recklessly as to whether the use may result in themselves or someone else directly or indirectly gaining an advantage, or in causing detriment to the corporation.

Penalty:

(1), (2) and (3) – 15 years imprisonment.

Summary/Indictable/mixed:

Indicatable

Jurisdiction:

District or Supreme Court

How committed:

(1)   A director who falsely states the value of the business to obtain finance.

(2)   An employee who deals with invoicing, approves false invoices and has the payment deposited into their own account.

(3)   A past employee keeps a password to the accounting system and creates false payments which are then made to the former employee’s bank account.

Important note:

It is not a defence to ss. (2) that the director or officer or employee use/d the information dishonestly to seek to gain an advantage for the corporation, whether directly or indirectly, or that an advantage was actually gained in any way.

It is not a defence to ss. (3) that the person use/d the information dishonestly to seek to gain an advantage for the corporation, whether directly or indirectly, or that an advantage was actually gained in any way.