MENU

Section 500 of Insolvency Act CAP 53: Offences involving transactions to defraud creditors of company in liquidation

    

(1) This section applies in relation to a company that is in liquidation, whether voluntary or by the Court.
(2) An officer or former officer of the company commits an offence if the officer or former officer—
(a) does not to the best of the officer's or former officer's knowledge and belief fully and truly disclose to the liquidator all of 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 course of the company's business);
(b) does not deliver to the liquidator, or in accordance with the directions of the liquidator, all such part of the company's property as is under the control of the officer or former officer, and that the officer or former officer is required by law to deliver to the liquidator;
(c) fails to deliver to the liquidator, or in accordance with the liquidator's directions, all documents under the control of the officer or former officer that belong to the company and that the officer or former officer is required by law to deliver to the liquidator;
(d) knowing or believing that a false debt has been proved by any person in the liquidation, fails to inform the liquidator of that knowledge or belief as soon as is practicable; or
(e) after the commencement of the liquidation, prevents the production of any document affecting or relating to the company's affairs or property.
(3) An officer or former officer also commits an offence if, after the commencement of the liquidation, the officer or former officer attempts to account for any part of the company's property by means of fictitious losses or expenses.
(4) An officer or former officer is presumed, in the absence of evidence to the contrary, to have committed an offence under subsection (3) if the officer or former officer has made an attempt of the kind referred to in that subsection at a meeting of the company's creditors held within the twelve months immediately preceding the commencement of the liquidation.
(5) In a prosecution for an offence under subsection (2)(a), (b) or (c), it is a defence to prove that the officer or former officer had no intention to defraud.
(6) In a prosecution for an offence under subsection (2)(e), it is a defence to prove that the officer or former officer had no intention to conceal the state of affairs of the company or to defeat the law.
(7) An officer or former officer found guilty of an offence under this section is liable on conviction to a fine not exceeding two million shillings or to imprisonment for a term not exceeding five years, to both.

« Previous:   Section 499 - Offence involving misconduct committed in course of liquidation of company          Next: »   Section 501 - Offence to falsify documents in relation to company in liquidation

Disclaimer: This document is not to be taken as legal advise.

Enhance Your Research with Bookmarks and Annotations

Here's how you can use these features:

  • To bookmark this page, click the "Bookmark this Page" button below the document title.
  • To add an annotation, highlight text in the document and select "Add Annotation" from the toolbar that appears.
  • These features are great for organizing your research and keeping track of key information.
  • You can view and manage your bookmarks and annotations on your Bookmarks and Annotations page.

Cited By:

More Sections