What the Law states - Offences by officers of certain companies

CORPORATIONS ACT 2001 - SECT 590

(1)  A person who, being 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 of the company was disposed of within 10 years next before the relevant day, except such part as has been disposed of in the ordinary course of the business of the company; or

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

(i)  engaged in conduct that resulted in the fraudulent concealment or removal of any part of the property of the company to the value of $100 or more; or

(ii)  engaged in conduct that resulted in the concealment of any debt due to or by the company; or

(iii)  engaged in conduct that resulted in the fraudulent parting with, alteration or making of any omission in, or being privy to fraudulent parting with, altering or making any omission in, any book affecting or relating to affairs of the company; or

(iv)  by any false representation or other fraud, obtained on credit, for or on behalf of the company, any property that the company has not subsequently paid for; or

(v)  engaged in conduct that resulted in the fraudulent pawning, pledging or disposal of, otherwise than in the ordinary course of the business of the company, property of the company that has been obtained on credit and has not been paid for;

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

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

(g)  has, within 10 years next before the relevant day or at a time on or after that day, attempted to account for any part of the property of the company by making entries in the books of the company showing fictitious transactions, losses or expenses; or

(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.

(2)  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.

Note: For absolute liability , see section 6.2 of the Criminal Code .

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

Note: A defendant bears an evidential burden in relation to the matters in subsection (3), see subsection 13.3(3) of the Criminal Code .

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

(a)  all the property of the company in the person's possession; or

(b)  all books in the person's possession belonging to the company (except books of which the person is entitled, as against the company and the appropriate officer, to retain possession);

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 under subsection (6), it is necessary to establish that a person has taken property in pawn or pledge, or otherwise received property:

(a)  in circumstances mentioned in subsection (5); and

(b)  with the knowledge mentioned in that subsection;

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