False statements by company directors

– section 85 of the Crimes Act 1958

False statements by company directors

False Statements By Company Directors is when a director of a corporation publishes a misleading or deceptive statement. They do so in order to deceive the members or creditors of the company.

Examples of False Statements By Company Directors
  • A company director sends an untrue email to the members about performance targets being met. When in reality the company is performing badly.
  • The CEO of a company fabricates productivity ratings in a letter to creditors in order to secure further investment.
What are some of the possible defences to a charge of False Statements By Company Directors?
  • No false statements were made.
  • The Director did not intend to deceive members or creditors.
  • The Director had no knowledge the statements were false.

There are other possible defences, depending on the circumstances surrounding the alleged offending. Each matter is unique and requires an individual approach and strategy.

Questions in cases like this
  • Were any statements made to members or creditors that were not correct or accurate?
  • Did you know the statements were false?
  • Was anyone intentionally deceived?

Maximum penalty and Court that deals with this charge

The maximum penalty for this offence is level 5 imprisonment (10 years).

This is a strictly indictable charge which means that your case must be heard in the County Court.

“Were false statements made?”
What is the legal definition of False Statements By Company Directors?

The Prosecution must show that you are a director or officer of a corporation. And you published a written statement or account which may be misleading or deceptive. And did so with intent to deceive members or creditors of the body corporate.

Legislation

The section that covers this offence is section 85 of the Crimes Act 1958.1

What can you be sentenced to for this charge?

In severe cases where the extent of the damage caused by the false statement is significant, you may get a prison sentence if found guilty. In less serious cases, you could get fine.

 


[1] Crimes Act 1958 – Section 85

(1) 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, publishes or concurs in publishing a written statement or account which to his knowledge is or may be misleading, false or deceptive in a material particular, he is guilty of an indictable offence and liable to level 5 imprisonment (10 years maximum).
(2) For purposes of this section a person who has entered into a security for the benefit of a body corporate or association is to be treated as a creditor of it.
(3) Where the affairs of a body corporate or association are managed by its members, this section shall apply to any statement which a member publishes or concurs in publishing in connection with his functions of management as if he were an officer of the body corporate or association.