• Chapter 1 Chapter 1 — Contraventions by Directors and others

    • 244. Fraud in anticipation of winding-up or insolvent administration

      (1) When a Company is ordered to be wound up by the Court, or passes a resolution for voluntary winding-up or enters insolvent administration, any person, being a past or present officer of the Company, commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule if, within the twelve (12) months immediately preceding the commencement of the winding-up, he has —
      (a) concealed any part of the Company's property to the value of $200 or more, or concealed any debt due to or from the Company;
      (b) fraudulently removed any part of the Company's property to the value of $200 or more;
      (c) concealed, destroyed, mutilated or falsified any book or paper affecting or relating to the Company's property or affairs;
      (d) made any false entry in any book or paper affecting or relating to the Company's property or affairs;
      (e) fraudulently parted with, altered or made any omission in any document affecting or relating to the Company's property or affairs; or
      (f) pawned, pledged or disposed of any property of the Company which has been obtained on credit and has not been paid for (unless the pawning, pledging or disposal was in the ordinary way of the Company's business),
      in each case with the intention of defrauding the creditors of the Company or concealing the state of affairs of the Company from any person, or to defeat the law.
      (2) Subsection (1) is deemed to also apply to such a person if, within the twelve (12) month period, he has been privy to the doing by others of any of the things mentioned in subsection (1) with the requisite intent.

    • 245. Transactions in fraud of creditors

      (1) When a Company is ordered to be wound up by the Court or passes a resolution for voluntary winding-up or enters insolvent administration, a person commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule if he, being at the time an officer of the Company —
      (a) has made or caused to be made any gift or transfer of, or charge on, or has caused or connived at the levying of any execution against, the Company's property; or
      (b) has concealed or removed any part of the Company's property since, or within two (2) months before, the date of any unsatisfied judgment or order for the payment of money obtained against the Company.
      (2) A person is not guilty of a contravention if —
      (a) he carried out the conduct under subsection (1)(a) above more than five years before the commencement of the winding-up or entry into insolvent administration; or
      (b) he proves that, at the time of the conduct constituting a breach of these Regulations he had no intent to defraud the Company's creditors.

    • 246. Misconduct in course of winding-up or insolvent administration

      When a Company is being wound up or has entered insolvent administration, a past or present officer of a Company commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule if he —

      (a) does not to the best of his knowledge and belief fully and truly discover to the liquidator or administrator, as the case may be, all the Company's property, and how and to whom and for what consideration and when the Company disposed of any part of that property (except such part as has been disposed of in the ordinary way of the Company's business);
      (b) does not deliver up to the liquidator or administrator, as the case may be (or as he directs), all such part of the Company's property as is in his custody or under his control, and which he is required by law to deliver up;
      (c) does not deliver up to the liquidator or administrator, as the case may be, (or as he directs) all books and papers in his custody or under his control belonging to the Company and which he is required by law to deliver up;
      (d) knowing or believing that a false debt has been proved by any person in the winding-up or administration, fails to inform the liquidator or administrator, as the case may be, as soon as practicable;
      (e) after the commencement of the winding-up or administration, prevents the production of any book or paper relating to the Company's property or affairs; or
      (f) after the commencement of the winding-up or administration, he attempts to account for any part of the Company's property by fictitious losses or expenses,

      and, except in the case of paragraph (f), he does so with the intention of defrauding creditors of the Company.

    • 247. Falsification of Company's books

      When a Company is being wound up or has entered insolvent administration, an officer or contributory of the Company commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule if he destroys, mutilates, alters or falsifies any books, papers or securities, or makes or is privy to the making of any false or fraudulent entry in any register, book of account or document belonging to the Company with intent to defraud or deceive any person.

    • 248. Material omissions from statement relating to Company's affairs

      When a Company is being wound up or has entered insolvent administration, any past or present officer of the Company commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule if he makes any material omission in any statement relating to the Company's affairs (including a Statement of Affairs) with the intention of defrauding the creditors of the Company.

    • 249. False representations to creditors

      Any past or present officer of the Company commits a contravention and is liable to a fine at the relevant level set out in the Fines Schedule if —

      (a) when a Company is being wound up or has entered insolvent administration, he makes any false representation or commits any other fraud for the purpose of obtaining the consent of the Company's creditors or any of them to an agreement with reference to the Company's affairs or to the winding-up or administration; or
      (b) prior to the winding-up or administration, he has made any false representation or committed any other fraud for that purpose.

    • 250. Summary remedy against delinquent officers or liquidators

      (1) Subsection (3) applies if in the course of the winding-up of a Company it appears that a person who —
      (a) is or has been an officer of the Company;
      (b) is a liquidator or administrative receiver of the Company; or
      (c) is or has been concerned, or has taken part in the promotion, formation or management of the Company,
      has misapplied or retained, or become accountable for, any money or other property of the Company, or been guilty of any misfeasance or breach of any fiduciary or other duty in relation to the Company.
      (2) Subsection (1) includes, in the case of a person who has acted as a liquidator of the Company, any misfeasance or breach of any fiduciary duty in connection with the carrying out of his functions as a liquidator of the Company.
      (3) The Court may, on the application of the Registrar, the liquidator or of any creditor or contributory, examine into the conduct of the person falling within subsection (1) and compel him to —
      (a) repay, restore or account for the money or property or any part of it, with interest at such rate as the Court thinks just; or
      (b) contribute such sum to the Company's assets by way of compensation in respect of misfeasance or breach of fiduciary or other duty as the Court thinks just.

    • 251. Fraudulent trading

      (1) If in the course of the winding-up of a Company or while it is in administration it appears that any business of the Company has been carried on with intent to defraud creditors of the Company or creditors of any other person, or for any fraudulent purpose, subsection (2) applies.
      (2) The Court, on the application of the liquidator or the administrator, as the case may be, may declare that any persons who were knowingly parties to the carrying on of the business in the manner mentioned are liable to make such contributions (if any) to the Company's assets as the Court thinks proper.

    • 252. Wrongful trading

      (1) Subject to subsection (3) below, if in the course of the winding-up of a Company or while it is in administration it appears that subsection (2) applies in relation to any person being a past or present Director of the Company, the Court, on the application of the relevant Officeholder, may declare that person is to be liable to make such contribution (if any) to the Company's assets as the Court thinks fit.
      (2) This subsection (2) applies if —
      (a) the Company has gone into an insolvent liquidation or has entered insolvent administration;
      (b) at some time before the commencement of the winding-up of the Company or before the Company entered administration, as the case may be, the person knew or ought to have concluded that there was no reasonable prospect of the Company avoiding going into insolvent liquidation or entering insolvent administration; and
      (c) the person was a Director of the Company at that time.
      (3) Subsection (1) shall not apply to any person if the Court is satisfied that after the Director first knew or ought to have concluded that there was no reasonable prospect of the Company avoiding going into insolvent liquidation, he took every step with a view to minimising the potential loss to the Company's creditors as (on the assumption that the person had knowledge of the matter mentioned in subsection (2)(b)) he ought to have taken.
      (4) For the purposes of this Section, the facts which a Director of the Company ought to know, the conclusions which he ought to reach and the steps which he ought to take are those which would be known, or reached or taken, by a reasonably diligent person having both —
      (a) the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that Director in relation to the Company (including functions which he does not carry out but which have been entrusted to him); and
      (b) the general knowledge, skill and experience that Director has.
      (5) This Section is without prejudice to Section 251 (Fraudulent trading).
      (6) In this Section, Director includes a shadow director.

    • 253. Proceedings under Sections 251 and 252

      Where the Court makes a declaration under either Section 251 (Fraudulent trading) or Section 252 (Wrongful trading), it has wide powers to give such further directions as it thinks proper for giving effect to the declaration.