241. Prosecution of delinquent officers and members of company

If it appears to the Court, in the course of the judicial management or winding up of a company by the Court, that any past or present officer, or any member, of the company has been guilty of an offence in relation to the company for which he or she is criminally liable, the Court may, either on the application of any person interested in the judicial management or winding up (as the case may be) or of its own motion, direct the judicial manager or liquidator to prosecute the offender or to refer the matter to the Minister.

If it appears to the judicial manager, in the course of a judicial management, or the liquidator, in the course of a voluntary winding up, that any past or present officer, or any member, of the company has been guilty of any offence in relation to the company for which he or she is criminally liable, the judicial manager or liquidator must immediately report the matter to the Minister and must, in respect of information or documents in the judicial manager’s or liquidator’s possession or under the judicial manager’s or liquidator’s control which relate to the matter in question, furnish the Minister with such information and give to the Minister such access to and facilities for inspecting and taking copies of any document as the Minister may require.

If it appears to the judicial manager, in the course of a judicial management, or the liquidator, in the course of any winding up, that the company which is in judicial management or which is being wound up will be unable to pay its unsecured creditors more than 50 cents in the dollar, the judicial manager or liquidator must immediately report the matter in writing to the Official Receiver and must furnish the Official Receiver with such information and give to the Official Receiver such access to and facilities for inspecting and taking copies of any document as the Official Receiver may require.

Where any report is made under subsection (2) or (3), the Minister may investigate the matter and for the purposes of such an investigation has all such powers of investigating the affairs of the company as are provided by this Act in the case of a winding up by the Court, but if it appears to the Minister that the case is not one in which proceedings ought to be taken by the Minister, the Minister must inform the judicial manager or liquidator (as the case may be) accordingly, and upon being informed, subject to the prior approval of the Court, the judicial manager or liquidator (as the case may be) may take proceedings against the offender.

If it appears to the Court, in the course of a judicial management or a voluntary winding up, that any past or present officer, or any member, of the company has been guilty of an offence in relation to the company for which he or she is criminally liable and that no report with respect to the matter has been made by the judicial manager or liquidator (as the case may be) to the Minister, the Court may, on the application of any person interested in the judicial management or voluntary winding up or of its own motion, direct the judicial manager or liquidator (as the case may be) to make such a report, and on a report being made accordingly this section has effect as though the report has been made under subsection (2).

If, where any matter is reported or referred to the Minister or the Official Receiver under this section, the Minister or the Official Receiver (as the case may be) considers that the case is one in which prosecution ought to be instituted, the Minister or the Official Receiver (as the case may be) may institute proceedings accordingly, and the judicial manager, the liquidator and every officer and agent of the company past and present, other than the defendant in the proceedings, must give the Minister or the Official Receiver all assistance in connection with the prosecution which he or she is reasonably able to give.

For the purposes of subsection (6), “agent”, in relation to a company, includes any banker or solicitor of the company and any person employed by the company as auditor, whether or not an officer of the company.

If any person fails or neglects to give assistance in the manner required by subsection (6), the Court may, on the application of the Minister or the Official Receiver, direct that person to comply with the requirements of that subsection, and where any application is made under this subsection with respect to a judicial manager or liquidator the Court may, unless it appears that the failure or neglect to comply was due to the judicial manager or liquidator not having in his or her hands sufficient assets of the company to enable him or her to give assistance in the manner required by subsection (6), direct that the costs of the application be borne by the judicial manager or liquidator personally.

The Minister may direct that the whole or any part of any costs and expenses properly incurred by the judicial manager or liquidator in proceedings brought under this section be defrayed out of moneys provided by Parliament.

Subject to any direction given under subsection (9) and to any charges on the property of the company and any debts to which priority is given by this Act, all such costs and expenses are payable out of the property of the company as part of the costs of the judicial management or winding up of the company.