For obvious reasons, the concealment, destruction, mutilation or falsification of a company’s books is capable of being an offence under the Corporations Act 2001 (Cth). The Australian Securities & Investments Commission (ASIC) has reported that a director who pleaded guilty to falsifying the books of a company controlled by him has been convicted and sentenced following charges being brought against him.
In an attempt to curtail or delay the creditors of the company (now in liquidation) from taking further action to recover debts owed, the director sent emails to the creditors attaching bank remittances implying payments to the creditors had been processed by the company. ASIC undertook an investigation after the liquidators of the company raised concerns in their report as to the bank remittances sent to creditors. As a result of ASIC’s investigation, it was found that the payments referred to in the remittances had not, in fact, been processed and that the director had created the remittances to keep the creditors at bay.
The director entered a plea of guilty to 9 charges of falsifying company books and was convicted and fined $25,000. In addition, the director has been disqualified from acting in the management of a corporation for the next five years.
It goes to show, honesty is always the best policy! For more information, please contact ERA Legal.