Offences by officers of certain companies

Offence title:

Offences by officers of certain companies

Act:

590 Corporations Act

Offence:

(1)   A person who is a past or present officer or employee, of a company to which this section applies:

(a)   Does not disclose to the appropriate officer:

·       all the property of the company; and

·       how and to whom and for what consideration; and

·       when any part of the property was disposed of in the past 10 years next before the relevant day, except such part as in the ordinary course of the business; or

(c)    has, within 10 years next before the relevant day, or on or after that day:

                                           i.         engaged in fraudulently concealing or removing any part of the property of the company valued at $100 or more; or

                                         ii.         concealed any debt due to or owed by the company; or

                                        iii.         fraudulently parted with, altered or made any omission in, or being party to fraudulently parting with, altering or making an omission in any book affecting or relating to the affairs of the company; or

                                        iv.         by falsely representing or other fraud, secured on credit for on or behalf of the company, that has not been subsequently paid for; or

                                         v.         fraudulently pawned, pledged or disposed of, otherwise than in the ordinary course of business, property of the company that has been obtained on credit and not been paid for;

(d)   fraudulently makes any material omission in any statement or report relating to affairs of the company; or

(f)    behaved in a way that prevented production to the appropriate officer of any book affecting or relating to affairs of the company; or

(g)   entered fictitious transactions, losses or expenses in the books, within 10 years next before the relevant day or at a time on or after that day;

(h)   has, within 10 years next before the relevant day or at a time on or after that day, been guilty of any false representation or other fraud for the purpose of obtaining the consent of the creditors of the company or any of them to an agreement with reference to affairs of the company or to the winding up;

contravenes this subsection.

(4)    A person who is a past or present officer or employee, of a company to which this section applies, does not deliver up to the appropriate officer in accordance with their directions:

(a)   The books if the company in their possession; or

(b)   All books in the person ‘s possession belonging to the company, except those which the person is entitled to, as against the company and the appropriate person;

Contravenes this subsection.

(4A) A person who, being a past or present officer or employee of a company and knowing or believing that a false debt has been proved by a person, fails for a period of one month to inform the appropriate officer of his or her knowledge or belief contravenes this subsection.

(4B) A person must not intentionally or recklessly fail to comply with subsection (4) or (4A).

(5)   Where a person pawns, pledges or disposes of any property in circumstances that amount to a contravention by virtue of subparagraph (1)(c)(v), a person who takes in pawn or pledge or otherwise receives the property knowing it to be pawned, pledged or disposed of in those circumstances contravenes this subsection.

(6)   A person who takes in pawn or pledge or otherwise receives property in circumstances mentioned in subsection (5) and with the knowledge mentioned in that subsection is taken to hold the property as trustee for the company concerned and is liable to account to the company for the property.

(7)   Where, in proceedings against ss. (6), it is necessary to prove a person has received property in pawn or pledge or otherwise received property:

(a)   In circumstances set out in ss. (5); and

(b)   With knowledge;

The matter referred to in (b) of this subsection may be proved on the balance of probabilities.

Penalty:

(1)   2 years imprisonment.

(5)   1 year imprisonment.

Summary/Indictable/mixed:

Mixed

Jurisdiction:

Local, District or Supreme Court

How committed:

A managing director knowingly makes a fraudulent entry in the accounts of the company.

Important note:

(4)   Absolute liability applies to so much of an offence based on paragraph (1)(c), (g) or (h) as requires that an event occur within 10 years next before the relevant day or at a time on or after that day.

(5)   Paragraph (1)(a) does not apply to the extent that the person is not capable of disclosing the information referred to in that paragraph.