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Insolvency - Offences (Ss 137-150)

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Offences Prior to Sequestration or Assignment (ss 137-140)

 

137.   Concealing, etc., books, assets, or destruction or disposition of same

 

            A person shall be guilty of an offence and liable to imprisonment for a term not exceeding three years if at any time before or after the sequestration or assignment of his estate he does any of the following acts, unless he satisfies the court that he had no intention to defraud, that is to say, if he-

     (a)     conceals, parts with, destroys, mutilates, falsifies or makes any false entry or erasure in any book or other document relating to his business, property or affairs or permits any other person to commit any such act in regard to any such book or document;

     (b)     conceals or permits the concealment of any assets which ought to be placed at the disposal of the trustee or assignee;

     (c)     otherwise than in the ordinary course of business makes, or permits the making of, a disposition of any property which he has obtained on credit and has not paid for; or

     (d)     otherwise than in the ordinary course of business destroys, damages, removes, or makes a disposition of, or permits the destruction, damage, removal or the making of a disposition of, any assets in his estate if such destruction, damage, removal, or disposition has prejudiced or is calculated to prejudice his creditors:

            Provided that-

      (i)     whenever in any proceedings for a contravention of paragraph (a) any act described in that paragraph is proved to have been committed in regard to any book or other document relating to the business, property or affairs of the insolvent or debtor who has assigned his estate, he shall be deemed to have committed or permitted such act unless he satisfies the court that he neither committed it nor could have prevented the commission;

      (ii)     in any proceedings for a contravention of paragraph (c) or paragraph (d) any disposition, destruction, damage or removal of assets proved to have been committed shall, unless the contrary is proved, be deemed to have been otherwise than in the ordinary course of business;

     (iii)     if it appears by reference to any book or document relating to the business, property or affairs of the insolvent, or debtor who has assigned his estate, or if it is proved in any other manner whatsoever that, in the assets found in the estate by the trustee or assignee, there is a general deficiency not clearly and fully accounted for, of one-tenth or more of the total value of assets so found in the estate, such insolvent or debtor shall be deemed to have removed or made a disposition of assets to the value of such deficiency in contravention of paragraph (d) unless he fully and accurately accounts for or explains the deficiency and satisfies the court that the deficiency was not caused by his action and that he could not have prevented it.

 

138.   Concealment of liabilities or pretence to existence of assets

 

            A person shall be guilty of an offence and liable to imprisonment for a term not exceeding three years if, within two years immediately preceding the sequestration or assignment of his estate, when making any statement either verbally or in writing in regard to his business, property or affairs to any person who is a creditor or to any person who has become his creditor on the faith of such a statement he conceals any liability present or future, certain or contingent, which he may then have contracted, or fails to disclose the full extent of his liability, or mentions, as if it were an asset, any right or property which at the time is not an asset, or represents that he has more assets than he in fact has, or makes any false statement in regard to the amount, quality or value of his assets, or in any way conceals or disguises or attempts to conceal or disguise any loss which he has sustained, or gives any incorrect amount thereof, unless he satisfies the court that he had no intent to defraud.

 

139.   Failure to keep proper records

 

            (1) A person shall be guilty of an offence and liable to imprisonment for a term not exceeding one year if, being an insolvent or having assigned his estate, and his occupation or transactions having been such that he might reasonably be expected to keep a record of his transactions, he has failed to keep a proper record of his transactions in the English language.

            (2) For the purposes of this section a proper record of transactions includes all such books containing entries which set forth clearly the nature of all such person's transactions as (regard being had to his occupation) he can reasonably be expected to have kept.

            (3) A trader shall not be deemed to have kept a proper record unless it includes-

     (a)     detailed stock-sheets and balance-sheets completed for each of his three financial or business years immediately preceding the sequestration or assignment of his estate or, if he commenced business less than three years before the sequestration or assignment of his estate, completed at the commencement of his business and thereafter for each financial or business year preceding the sequestration or assignment;

     (b)     books exhibiting for the period since the commencement of business or since the commencement of the financial or business year next but one before the financial or business year current with the sequestration or assignment (whichever period is the less) the following particulars-

           (i)       all goods or property purchased in the course of the business duly supported by the original invoices;

          (ii)       all cash receipts and disbursements and the dates thereof;

          (iii)       a daily record of all goods or property sold on credit, and such a continuous record of all transactions as a trader may be expected to keep in the ordinary course of business; and

         (iv)       in addition to the other particulars usually contained in a ledger the name and address of every person indebted to the trader at the time when he became so indebted; and

     (c)     all cheques drawn during the period mentioned in paragraph (b) in payment of disbursements, showing clearly, in the case of each cheque, the name of the payee and the date thereof, together with the counterfoils of all cheques, such counterfoils showing in each case the name of the payee, the amount of the cheque, and the date thereof:

            Provided that a trader whose turnover for the two years immediately preceding the sequestration or assignment of his estate or since the commencement of the business (whichever period is the less) was at the rate of less than P2000 per annum shall be deemed to have kept a proper record, if the court, having regard to the nature and circumstances of the business, is satisfied that he had kept a sufficient record of his transactions, including a list of his debtors and creditors and their addresses.

 

140.   Undue preferences, contracting debts without expectation of ability to pay, etc.

 

            (1) An insolvent or a debtor who has assigned his estate shall be guilty of an offence and liable to imprisonment for a term not exceeding one year if, prior to the sequestration or assignment of his estate, he made a disposition of any part of his property so as to cause an excess of his liabilities over his assets, or a greater excess of his liabilities over his assets than existed prior to the making of the disposition, with the intention of preferring one or more of his creditors above the others or any other:

            Provided that-

      (i)     any such disposition which had the effect of preferring, or was calculated to prefer one or more creditor above the others or any other shall, unless the contrary is proved, be deemed to have been made with the intention of preferring such creditor or creditors above the others or any other;

      (ii)     any such disposition made within a period of six months immediately preceding the sequestration or assignment shall, unless the contrary is proved, be deemed to have caused such excess or greater excess; and

     (iii)     for the purposes of this subsection "creditor" includes a surety for the insolvent or debtor as well as a person who in law is in a position analogous to that of a surety.

            (2) An insolvent or a debtor who has assigned his estate shall be guilty of an offence and liable to imprisonment for a term not exceeding two years if, prior to the sequestration or assignment of his estate-

     (a)     he contracted any debt of P30 or more or debts in the aggregate of P100 or more without any reasonable expectation of being able to discharge such debt or debts; or

     (b)     at a time when his liabilities exceeded his assets or during the period of six months immediately preceding the sequestration or assignment of his estate, he diminished his assets by gambling, betting, hazardous speculations or expenditure not reasonably necessary in connection with the business or vocation or for the maintenance of himself and his dependants:

            Provided that in any proceedings for a contravention of paragraph (a), the insolvent or debtor shall, unless the contrary is proved, be deemed to have contracted the debt or debts without having had a reasonable expectation of discharging the same, if the debt or debts were contracted-

      (i)     at a time when his liabilities exceeded his assets; or

      (ii)     within a period of six months immediately preceding the sequestration or assignment of his estate.

 

Offences after Sequestration or Assignment (ss 141-150)

 

141.   Failure to give information as to or delivery of assets, books, etc.

 

            A person shall be guilty of an offence and liable to imprisonment for a term not exceeding three years-

     (a)     if at any time during the sequestration or assignment of his estate, he, knowing or suspecting that a false debt has been or is about to be proved against his estate, fails for a period of seven days to inform in writing the Master and his trustee or assignee;

     (b)     if within 14 days after the appointment of the trustee or assignee-

           (i)       he fails to deliver to the trustee or assignee, or as the trustee or assignee may direct, any such assets of whatever nature in the estate as may be in his possession or custody or under his control;

          (ii)       he fails to inform the trustee or assignee of the existence and whereabouts of any asset in the estate (other than an asset referred to in subparagraph (i)), which is not fully disclosed in his schedules framed under this Act, or which is not already in the possession of the trustee or assignee;

          (iii)       he fails to deliver to the trustee or assignee or sheriff or bailiff or as any of them may direct, all books, documents, papers and writings in his possession or custody or under his control, relating to his assets or affairs; or

         (iv)       he fails to inform the trustee or assignee of the existence or whereabouts of any such book, document, paper or writing not in his possession or custody or under his control, if the same is not already in the possession of the trustee or assignee, unless, in any such case, he satisfies the court that he had a lawful excuse for the failure; or

     (c)     if, at any time after the sequestration or assignment of his estate, he fails to furnish at the request of the trustee or assignee complete and truthful information regarding any asset in his possession or custody or under his control or which was at any time in his possession or custody or under his control, or regarding the time when or the manner or circumstances in which he disposed of such assets or ceased to be in possession, custody or control thereof, unless he satisfies the court that he had a lawful excuse for such failure.

 

142.   Obtaining credit during insolvency, offering inducements, etc.

 

            A person shall be guilty of an offence and liable to imprisonment for a term not exceeding one year-

     (a)     if, during the sequestration or after the assignment of his estate, he obtains credit to an amount exceeding P20 without previously giving information to the person from whom he obtains credit that he is insolvent or has assigned his estate, unless he satisfies the court that such person had knowledge of that fact;

     (b)     if he grants, promises, or offers any gift, payment or security or any consideration whatever in order to procure the consent of any creditor to an assignment or offer of composition or to prevent opposition to a rehabilitation or, during the sequestration or after the assignment of any estate, to induce any person to refrain from investigating any matter relating to that estate or from disclosing any information in regard thereto;

     (c)     if he contravenes the provisions of section 16, 22(2) and (3) or 77(11), unless he satisfies the court that he had a lawful excuse for such contravention; or

     (d)     if he makes any false statement in the schedules or statement referred to in section 4(2) and (3), 16 or 119, or in the statement referred to in proviso (ii) to section 22(2):

                      Provided that in any proceedings for an offence against paragraph (c) for failure to comply with section 16, a certificate under the hand of the Master to the effect that the accused has failed to lodge with the Master his schedules or statement of his affairs, as required by the said section 16, shall be prima facie evidence of such failure.

 

143.   Failure to attend meetings or give explanation of insolvency

 

            A person shall be guilty of an offence and liable to imprisonment for a term not exceeding six months-

     (a)     if, being by this Act required to attend at the first or second meeting of creditors in an estate or an adjournment thereof, or, in the case of a further meeting, being duly required in writing by the trustee or assignee to attend, he absents himself without the written permission of the presiding officer;

     (b)     if, being an insolvent or having assigned his estate and being thereto required by the trustee or assignee, he fails to give a true, clear and detailed explanation of his insolvency or assignment or fails to account correctly and in detail for the excess of his liabilities over his estate;

     (c)     if, being an insolvent or having assigned his estate and being under examination at a meeting and being thereto required by the trustee, the assignee or the officer presiding, or any creditor or by the agent of any of them, he fails to account for, or to disclose what has become of, any of his property which is proved to have been in his possession so recently before the sequestration or the assignment that in the ordinary course he ought to be able to account for the same; or

     (d)     if, being an insolvent or having assigned his estate, he fails to keep the trustee or assignee informed of his residential address.

 

144.   False answers on oath while under examination

 

            A person shall be guilty of an offence and liable to the punishment provided by law for the crime of perjury if, when being examined on oath under this Act, he makes a false answer to any lawful question, knowing such answer to be false, or he makes any false statement whatever relative to the subject matter of the inquiry knowing such statement to be false.

 

145.   Failure to appear before meeting of creditors or before the court or a magistrate

 

            Any person referred to in section 56 or in section 131 and any person who has assigned his estate shall be guilty of an offence and liable to imprisonment for a term not exceeding six months, if, being summoned to appear at a meeting of creditors or before the court or any magistrate under either of those sections, he conceals himself or quits Botswana, or without reasonable excuse fails to appear.

 

146.   Failure of debtor or spouse to appear to give evidence in proceedings

 

            Any person who is insolvent or has assigned his estate and the spouse of any such person shall be guilty of an offence and liable to imprisonment for a term not exceeding six months if, being duly summoned to give evidence in any proceedings either for or against the trustee or assignee he conceals himself or herself or quits Botswana or without reasonable cause fails to attend those proceedings or refuses to answer any question which may lawfully be put to him or her.

 

147.   Inducement by consideration or promise to do or omit certain acts in relation to insolvent estate

 

            A person shall be guilty of an offence and liable to imprisonment for a term not exceeding six months if he suffers himself to be induced by any gift, payment, security or any consideration whatever or by any promise or offer of any gift, payment, security or consideration to discontinue or abstain from any proceedings for the sequestration of an estate or to agree to or not to oppose any composition in an estate or the discharge or rehabilitation of an insolvent or to refrain from investigating any matter relating to an insolvent or assigned estate or from disclosing any information in regard thereto.

 

148.   Removing or concealing property to defeat an attachment or failure to give information

 

            (1) A person shall be guilty of an offence and liable to imprisonment for a term not exceeding three years if, either before or after the sequestration or assignment of any estate, he removes, conceals, disposes of, deals with or receives any asset belonging to that estate with intent to defeat an attachment under section 6, or by virtue of a sequestration order, or with the intent to defraud the creditors in the estate:

            Provided that in any proceedings for an offence under this subsection any such removal, concealment, disposal of, dealing with or receipt of assets which has the effect of defeating or is calculated to defeat such attachment or which prejudices or is calculated to prejudice the creditors in that estate, shall, unless the contrary is proved, be deemed to have been committed with intent to defeat the attachment or (as the case may be) to defraud those creditors.

            (2) A person who has in his possession or custody or under his control any asset belonging to an insolvent or assigned estate shall be guilty of an offence and liable to a fine not exceeding P600 or to imprisonment for a term not exceeding one year if, knowing of the sequestration or assignment of the estate and that the asset belongs to it, he fails to inform the trustee or assignee of the estate as soon as possible of the existence and whereabouts of the asset and to deliver it to, or place it at the disposal of, the trustee or assignee.

            (3) The provisions of this section shall not apply to the insolvent or debtor who has assigned his estate, but nothing in this subsection shall prevent the application of the section to an insolvent or such a debtor in respect to assets belonging to another estate which has been sequestrated or assigned.

 

149.   Liability of partners or administrators

 

            A partner who does, or omits to do in relation to the property or affairs of the partnership, and any person charged by law with the administration of an estate who does, or omits to do, in relation to the affairs of that estate, any act which if done or omitted by him under the like circumstances in relation to his private estate would have been punishable under this Act, shall be guilty of the same offence.

 

150.   Liability of agents and managers and evidence of liability or date thereof

 

            (1) Any servant, agent or manager having the sole or practical control of the affairs of his employer or principal shall, upon the sequestration or assignment of the estate of his employer or principal, be liable to criminal proceedings and punishment for all offences under this Act to the same extent as if that servant, agent or manager were the insolvent or the debtor whose estate has been assigned:

            Provided that the liability of the insolvent or debtor to criminal proceedings for any such offence shall not thereby be affected.

            (2) Whenever in any criminal proceedings under this Act any liability incurred by the insolvent or by a debtor who has assigned his estate, or the date or time when the debt or liability was incurred, is in issue or relevant to the issue, proof that liability has been admitted under any of the provisions of sections 43 to 49 shall be sufficient evidence of the existence of the liability and the liability shall be deemed to have been incurred upon the date or at the time alleged in any document submitted in accordance with the provisions of any of those sections in support of any claim in respect of the liability:

            Provided that any party to such criminal proceedings may prove that no such liability or that a lesser or a greater liability was incurred or that it was incurred on a date or at a time other than as so alleged.