Companies - Offences And Penalties (Ss 492-507)

Link to law: http://www.elaws.gov.bw/desplaylrpage1.php?id=1330

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[Ch4201s492]492. Penalty for failure to comply with Act

(1) A

person convicted of an offence against any of the provisions of this Act which

state that on conviction the person shall be liable to the penalty set out in

this subsection, shall be liable to a fine not exceeding P10,000.

(2) A

person convicted of an offence against any of the provisions of this Act which

state that on conviction the person shall be liable to the penalty set out in

this subsection, shall be liable to a fine not exceeding P20,000.

(3) A

person convicted of an offence against any of the provisions of this Act which

state that on conviction the person shall be liable to the penalty set out in

this subsection, shall be liable to a fine not exceeding P100,000 or to

imprisonment for a term not exceeding two years.

(4) A

person convicted of an offence against any of the provisions of this Act which

state that on conviction the person shall be liable to the penalty set out in

this subsection, shall be liable to imprisonment for a term not exceeding five

years or to a fine not exceeding P200,000.

[Ch4201s493]493. Penalties in cases of failure by board or

company to comply with Act

(1) A

director of a company who is convicted of an offence against any of the

provisions of this Act which state that on conviction the person shall be

liable to the penalty set out in this subsection, shall be liable to a fine not

exceeding P10,000.

(2) A

director of a company who is convicted of an offence against any of the

provisions of this Act shall be guilty of an offence and liable to a fine not

exceeding P20,000.

(3)

Section 332(1) of the Criminal Procedure and Evidence Act, Cap. 08:02 providing

for the criminal liability of certain officers of a company charged with an

offence, shall not apply to criminal proceedings under any of the provisions of

this Act.

[Ch4201s494]494. Additional powers of enforcement

(1)

Where any company is in default in filing, delivering or sending any return,

account or other document required to be filed, delivered or sent to the

Registrar under this Act, or is in any other respect in breach of any of the

provisions of this Act, and where the Minister can satisfy the High Court that

the provisions for enforcement contained in this Act (otherwise than as

provided in this section) are impracticable of enforcement by reason of the

fact that no officer of the company is resident in Botswana or for any other

sufficient reason, the court may, on the application of the Minister, appoint a

receiver to assume control of the company’s assets located or situated in

Botswana with full power to conduct the affairs of the said company in Botswana

as if he were a judicial manager of a company under judicial management.

(2)

The said receivership may be discharged by the court, on application made by -

(a) the receiver; or

(b) the company, when the court is satisfied

that all of the following conditions are met, namely -

(i) there has been full compliance with all

the provisions of this Act, including the filing, delivery or sending of all

returns, accounts and documents required to be so filed, delivered or sent,

(ii) the payment by the company of all

expenses and costs of the said receivership, including any remuneration due to

or paid to the receiver and including any costs incurred by the Minister in

obtaining the appointment of the receiver or in the discharge of the

receivership, and

(iii) the payment by the company of such sum by

way of penalty as the court may consider appropriate in the circumstances:

Provided that

no such penalty shall be in excess of the fine or fines which might be imposed

by the court on conviction of the company, or any of its directors or officers

individually, in accordance with the provisions of this Act, in respect of the

default or defaults in question.

[Ch4201s495]495. Defences

(1)

It is a defence to a director charged with an offence in relation to a duty

imposed on the board of a company if the director proves that-

(a) the board took all reasonable and proper

steps to ensure that the requirements of this Act would be complied with; or

(b) the director took all reasonable and proper

steps to ensure that the board complied with the requirements of this Act; or

(c) in the circumstances the director could not

reasonably have been expected to take steps to ensure that the board complied

with the requirements of this Act.

(2)

It is a defence to a director charged with an offence in relation to a duty

imposed on the company if the director proves that-

(a) the company took all reasonable and proper

steps to ensure that the requirements of this Act would be complied with;

(b) the director took all reasonable steps to

ensure that the company complied with the requirements of this Act; or

(c) in the circumstances the director could not

reasonably have been expected to take steps to ensure that the company complied

with the requirements of this Act.

[Ch4201s496]496. False statement

(1)

Every person who, with respect to a document required by or for the purposes of

this Act-

(a) makes, or authorises the making of, a

statement in it that is false or misleading in a material particular knowing it

to be false or misleading; or

(b) omits, or authorises the omission from it,

any matter knowing that the omission makes the document false or misleading in

a material particular,

shall be guilty of an offence, and liable to the penalties set out in

section 492(3).

(2)

Every director or employee of a company who makes or furnishes, or authorises

or permits making or furnishing of, a statement or report that relates to the

affairs of the company and that is false or misleading in a material

particular, to -

(a) a director, employee, auditor, shareholder,

debenture holder, or trustee for debenture holders of the company;

(b) a liquidator, or liquidation committee of

property of the company;

(c) if the company is a subsidiary, a director,

employee, or auditor of its holding company; or

(d) a stock exchange or and an officer of a

stock exchange knowing it to be false or misleading,

shall be guilty of an offence, and liable to the penalties set out in

section 492(3).

(3)

For the purposes of this section, a person who voted in favour of the making of

a statement at a meeting is deemed to have authorised the making of the

statement.

(4)

If any person, on examination on oath authorised under this Act, or in any

affidavit or deposition in or about any matter arising under this Act, wilfully

and corruptly gives false evidence he shall be guilty of an offence and liable

to the penalties prescribed by law for perjury.

[Ch4201s497]497. Fraudulent use or destruction of property

Every

director, employee, or shareholder of a company who -

(a) fraudulently takes or applies property of

the company for his own use or benefit or for a use or purpose other than the

use or purpose of the company; or

(b) fraudulently conceals or destroys property

of the company,

shall be guilty of an offence and liable to the penalties set out in

section 492(4).

[Ch4201s498]498. Falsification of records

(1)

Every director, employee or shareholder of a company who, with intent to

defraud or deceive a person -

(a) destroys, parts with, mutilates, alters, or

falsifies, or is a party to the destruction, mutilation, alteration, or

falsification of any register, accounting records, book, paper, or other

document belonging or relating to the company; or

(b) makes, or is party to the making of, false entry

in any register, accounting records, book, paper, or other document belonging

or relating to the company,

shall be guilty of an offence, and liable to the penalties set out in

section 492(4) of this Act.

(2)

Every person who, in relation to a mechanical, electronic, or other device used

in connection with the keeping or preparation of any register, accounting

records, index, book, paper, or other document for the purposes of a company or

this Act-

(a) records or stores in the device, or makes

available to a person from the device, matter that he or she knows to be false

or misleading in a material particular; or

(b) with intent to falsify or render misleading

any such register, accounting records, index, book, paper, or other document,

destroys, removes, or falsifies matter recorded or stored in the device, or

fails or omits to record or store any matter in the device, shall be guilty of

an offence and liable to the penalties set out in section 492(4).

[Ch4201s499]499. Carrying on business fraudulently

Every

person who is knowingly a party to a company carrying on business with intent

to defraud creditors of the company or other persons or for a fraudulent

purpose in circumstances not coming under section 481 shall be guilty of an

offence and liable to the penalties set out in section 492(4).

[Ch4201s500]500. Persons prohibited from managing companies

(1)

Where -

(a) a person has been convicted on indictment

of any offence in connection with the promotion, formation, or management of a

company;

(b) a person has been convicted of an offence

under any of sections 496 to 499 or of any crime involving dishonesty

punishable on conviction by imprisonment for three months or more;

(c) a person has been convicted under section

324 as an insider trading; or

(d) a person who has been convicted under any

of sections 325, 326, 327 or 328,

that person shall not, during the period of five years after the

conviction or the judgment, be a director or promoter of, or in any way,

whether directly or indirectly, be concerned or take part in the management of

a company, unless that person first obtains the leave of the court which may be

given on such terms and conditions as the court considers appropriate.

(2) A

person intending to apply for the leave of the court under this section shall

give to the Registrar not less than 10 days’ notice of that person’s intention

to apply.

(3)

The Registrar, and such other persons as the court considers appropriate, may

attend and be heard at the hearing of any application under this section.

(4) A

person who acts in contravention of this section, or of any order made under

this section, shall be guilty of an offence and liable to the penalty set out

in section 492(3).

(5)

In this section, the term "company" includes a foreign or external

company that carries on business in Botswana.

[Ch4201s501]501. Court may disqualify directors

(1)

Where -

(a) a person has, while a director of a company

and whether convicted or not in circumstances not coming under section 50 -

(i) persistently failed to comply with this

Act, the repealed Act, or the Botswana Stock Exchange Act, Cap. 56:08 or where the

company has failed to so comply, persistently failed to take all reasonable

steps to obtain such compliance,

(ii) been guilty of fraud in relation to the

company or of a breach of duty to the company or a shareholder, or

(iii) acted in a reckless or incompetent manner

in the performance of his duties as director;

(b) a person who while a director of a company

was wholly or substantially responsible for the company -

(i) being wound up because of its inability

to pay its debts as and when they become due,

(ii) ceasing to carry on business because of

its inability to pay its debts as and when they become due, or

(iii) entering into a scheme of compromise or

arrangement with its creditors; or

(c) a person who has been convicted of an

offence in connection with the promotion, formation or management of a company

under the Collective Investment Undertakings Act, Cap. 56:09

the court may make an order that the person shall not, without the leave

of the court, be a director or promoter of, or in any way, whether directly or

indirectly, be concerned or take part in the management of a company for such

period not exceeding five years as may be specified in the order.

(2)

Where within the period of seven years before the making of an application

under this section a person was director of two or more companies to which

subparagraphs (i), (ii) or (iii) of subsection (1)(b) apply, the court

may make an order that the person may not be a director or promoter of or in

any way directly or indirectly be concerned in the management of a company for

such period not exceeding five years as may be specified in the order unless

that person satisfies the court -

(a) that he was not wholly or substantially

responsible for the insolvency of those companies; or

(b) it would not be just or equitable for the

power to be exercised.

(3) A

person intending to apply for an order under this section shall give not less

than 10 days’ notice of that intention to the person against whom the order is

sought, and on the hearing of the application the last-mentioned person may

appear and give evidence or call witnesses.

(4)

An application for an order under this section may be made by the Registrar,

the Master, or by the liquidator of the company, or by a person who is, or has

been, a shareholder or creditor of the company; and on the hearing of-

(a) an application for an order under this

section by the Registrar or the Master or the liquidator; or

(b) an application for leave under this section

by a person against whom an order has been made on the application of the

Registrar, the Master, or the liquidator,

the Registrar, Master, or liquidator shall appear and call the attention

of the court to any matters which seem to him to be relevant, and may give

evidence or call witnesses.

(5)

An order may be made under this section even though the person concerned may be

criminally liable in respect of the matters on the ground of which the order is

to be made.

(6)

The Registrar of the court shall, as soon as practicable after the making of an

order under this section, give notice to the Registrar that the order has been

made and the Registrar shall give notice in the Gazette of the name of

the person against whom the order is made.

(7)

Every person who acts in contravention of an order under this section shall be

guilty of an offence and liable to the penalties set out in section 492(4) of

this Act.

(8)

In this section, "company" includes an external company.

[Ch4201s502]502. Liability for contravening sections 500 and

501

A

person who acts as a director of a company in contravention of section 500 of

this Act or an order made under section 501 of this Act is personally liable

to-

(a) a liquidator of the company for every

unpaid debt incurred by the company; and

(b) a creditor of the company for a debt to

that creditor incurred by the company, while that person was so acting.

[Ch4201s503]503. Improper use of "Limited"

Any

person who, not being incorporated with limited liability, whether alone or

with other persons, carries on business under a name or title of which

"Limited" or a contraction or imitation of that word is the last

word, shall be guilty of an offence and liable to the penalty set out in

section 492(2).

[Ch4201s504]504. Failure to keep accounts

(1)

Where on an investigation under Part XXI or where a company is wound up, it is

shown that proper books of account were not kept by the company throughout the

period of two years immediately preceding the commencement of the investigation

or winding up or the period between registration of the company and

commencement of the investigation or winding up, whichever is less, every

officer who is in default shall, unless he acted honestly and shows that in the

circumstances in which the business of the company was carried on the default

was excusable, shall be guilty of an offence and liable to the penalty set out

in section 492(2).

(2)

For the purpose of this section, proper books of account shall be deemed not to

have been kept in the case of any company -

(a) where there have not been such books of

account as are necessary to exhibit and explain the transactions and financial

position of the trade or business of the company, including books containing

entries from day to day in sufficient detail of all cash received and cash

paid, and, where the trade or business has involved dealings in goods,

statements of the annual stock takings and except in the case of goods sold by

way of ordinary retail trade, of all goods sold and purchased, showing the

goods and the buyers and sellers thereof in sufficient detail to enable those

goods and those buyers and sellers to be identified; or

(b) where such books for accounts have not been

kept in such manner as to enable them to be conveniently and properly audited,

whether or not the company has appointed an auditor.

[Ch4201s505]505. Other offences

Every

person who -

(a) issues or makes use of a document or

certificate kept or given under this Act which does not comply with this Act;

(b) fails to do any act within the time within

which it is required by this Act to be done;

(c) fails to comply with a request, direction

or order issued under this Act by a court, by the Registrar or by any other

person;

(d) makes use of any name or title which he is

not under the Act authorised to use;

(e) divulges or makes use of any information

obtained under this Act which he is not otherwise authorised to disclose;

(f) uses the seal of a company (if it has one)

or issues any letter, bill or document relating to a company otherwise than in

accordance with this Act; or

(g) in the exercise of any powers or functions

conferred upon him by this Act or by any subsidiary enactment made under this

Act, fails to act in accordance with the instrument which confers the function

or power, shall be guilty of an offence and be liable to the penalty set out in

section 492(2).

[Ch4201s506]506. Reports of offences and production and

inspection of books

(1)

Where the court, the Master, the Registrar or a liquidator is of the opinion

that an offence against the Act has been committed by any persons, it shall

forthwith refer the matter to the Attorney-General.

(2)

If on application made to the court by the Registrar or a police officer of or

above the rank of Assistant Superintendent, there is shown to be reasonable

cause to believe that any person has, while a director or other officer of a

company, committed an offence in connection with the management of the

company’s affairs and that evidence of the commission of the offence is to be

found in any books or papers of or under the control of the company, the court

may make an order-

(a) authorising any person named therein to

inspect the said books or papers or any of them for the purposes of

investigating and obtaining evidence of the offence; or

(b) requiring the secretary of the company or

such other officer thereof as may be named in order to produce the said books

or papers or any of them to a person named in the order at a place so named by

a special date.

(2)

An auditor of a company shall for the purposes of this section be deemed to be

an officer of the company.

[Ch4201s507]507. Inducement to be appointed liquidator

Any

person who gives or agrees or offers to give to any member or creditor of a

company any valuable consideration with a view to securing his own appointment

or nomination, or to securing or preventing the appointment or nomination of

some person other than himself as the company’s liquidator shall be guilty of

an offence.