The responsibilities of a company director are not only towards the company and its shareholders but also to the company’s creditors. A company director must, above all, possess the quality of honesty.
It is the duty of a company director to disclose only truthful information about the company and not information that is misleading, false or deceptive. Dishonesty by publishing false written statements is punishable by a maximum of ten years imprisonment.
The applicable law is Section 85 of the Crimes Act 1958. The law provides in part:
“Where an officer of a body corporate or unincorporated association (or person purporting to act as such), with intent to deceive members or creditors of the body corporate or association about its affairs...”
A close inspection of the provision above of law shows that intent is an element of the crime. Thus, the police and the prosecution need to prove that there was intent on the part of the company director to deceive members or creditors of the company by publishing false information. Without the element of intent, the prosecution’s case would not have a leg to stand on. The element of intent includes the knowledge that such information is misleading, false or deceptive.
There are other important points to take note of this crime. A company director can also be held guilty if he concurs in publishing a false written statement or account about the company’s affairs. Therefore, the act of consenting to the publication of false information is just as punishable as if the company director was the one who revealed the false information. Also, another important point is that the information disclosed by the company director is “material particular” which means that the information must be material to the company’s affairs.
As an integral element of the crime, the intent would be difficult to prove, whereas the offender enjoys the presumption of innocence until proven guilty. The offender can raise the defence that there was a lack of intent.
Another defence that can be raised by the company director is duress, meaning he was forced against his will to publish the false information. A company director can also allege that there was absence of knowledge that the information disclosed was misleading, false or deceptive.
Disclaimer : This article is just a summary of the subject matter being discussed and should not be regarded as a comprehensive legal advice for you to defend yourself alone. If you are charged with criminal offences, it is recommended that you seek legal assistance from criminal lawyers.