Jul 11, 2016 News
Instead of criminal charges, the Police Legal Advisor believes that those officials of the National Industrial and Commercial Investments Limited (NICIL) who created fake minutes for Annual General Meetings (AGMs) and annual returns should at this point, only face civil proceedings.
Former Justice of Appeal, Claudette Singh in her advice to the investigators at the Special Organized Crime Unit (SOCU) used Section 525 of the Companies Act to support her case in this regard.
Section 525 says, “A prosecution for an offence under this Act or the Regulations may be instituted at any time within two years from the time when the subject matter of the prosecution arose.”
Singh said that the subject matters of the prosecution in relation to NICIL’s non submission of financial and annual reports between 2002 and 2013 would have arisen more than two years to date. In this regard, she believes that no charge can be instituted against the Directors and Secretary.
The Police Legal Advisor added, “While the criminal charges cannot be instituted due to the limitation period, the civil remedies, however, can still be pursued.”
In the case of the fake minutes for the AGMs, investigators found that the back-up hard drive on which documents are stored by NICIL revealed that the minutes for the years 2002, 2003, 2004, 2005, 2011 and 2012 were all created on November 2, 2015.
The Police Legal Advisor concluded that the minutes for those years were computer generated on that very date and were not in existence prior to that date. These documents were therefore false, the Advisor said.
NICIL also gave bogus information to the Registrar of Companies.
This newspaper understands that the false information given to the Registrar pertained to meetings which were “supposedly” held on specific dates when this was not true.
According to legal advice received by SOCU, this would constitute an offence under Section 518 of the Companies Act Chapter 89:01.
That Section of the Act says that a person who makes or assists in making a report, return, notice or other document that is required to be sent to the Registrar and contains an untrue statement of a material fact shall be guilty of an offence and shall be liable on summary conviction to a fine of $15,000 and to imprisonment for six months.
In addition, a statement which was provided by Joel Freeman, Legal Assistant to NICIL, said that he would usually prepare the draft annual returns in hard copies from the information in the yearly reports which were specially provided to him by the former Deputy Chief Executive Officer, Marcia Nadir-Sharma.
He would then give this to the Company Secretary for perusal and correction. Once the adjustments are inserted he would correct and print the document and return it to Nadir-Sharma for her signature. He would then file same.
The Police Legal Advisor said, “Ms. Nadir by inserting her signature on the document would have adopted the contents and therefore such a document would be her document. She would therefore have been liable for any false information.”
The Police Legal Advisor noted too, “It is obvious that the Registrar of Companies did not exercise his/her power under Section 487 of the Act to strike the company off the register for its failure to file its returns within the time prescribed by the Act. The Registrar failed to send a notice within section 487(2) advising the Company of its default.”
She said that the Registrar, no doubt might have been reluctant to act due to the fact that the former Minister of Finance, Dr. Ashni Singh was the Chairman of NICIL’s Board of Directors.
The officials agreed that the Directors of the Company breached the nation’s financial laws, specifically, Section 107 (1) (a) of the Companies Act Chapter 89:01.
This part says that the Directors of a Company shall call an Annual General Meeting of shareholders not later than 18 months after the Company comes into existence and subsequently not later than 15 months after holding the preceding Annual General Meeting.
Legal advice on the matter indicates that the word “shall” used in the section makes the holding of the Annual General Meeting mandatory in that the Company has an obligation to hold such a meeting.
Kaieteur News understands that the main purpose of such a meeting is to consider the financial statements of the Company; the auditor’s report; election of Directors and the re-appointment of the incumbent auditor.
Legal advice given to SOCU also indicates that if a company defaults in holding such a meeting, the company and every officer of the company shall be guilty of an offence and shall be liable under section 107 (5) on summary conviction to a fine of $15,000.
Additionally, SOCU officials were informed that NICIL was also in breach of Section 153 (3) of the Act. This section stipulates that the annual return should be lodged 42 days after the Annual General Meeting.
The Police Legal Advisor said that the Directors of NICIL no doubt have a fiduciary duty to the Company and the Shareholders. By failing to hold annual general meetings they would have been in breach of their fiduciary duty to the Company and its members.
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