Companies Act, 1973 (Act No. 61 of 1973)Chapter XVB: Financial reporting standards440FF. Offence and penalty |
| 1) | A widely held company which issues a financial report that fails to comply with a financial reporting standard, and every director of the company who has signed or was party to the preparation or approval of the financial report, shall be guilty of an offence. |
| 2) | A company under investigation may with the agreement of the Minister- |
| a) | pay an administrative penalty; |
| b) | revise and republish the financial report: |
| c) | take any other remedial action; or |
| d) | undertake any combination of the measures listed in paragraphs (a) to (c), within a designated time. |
| 3) | The amount and action contemplated in subsection (2) shall be decided by the nominated officer in consultation with the executive officer and the chairperson of the Panel, and be based on- |
| a) | the nature, extent and materiality of the failure; |
| b) | whether the failure was deliberate or reckless; |
| c) | any prospective loss or damage to users as a result of the failure: |
| d) | the probable influence of the failure on the economic decisions of users; |
| e) | any previous failures of the same company: |
| f) | any other relevant factor. |
| 4) | If a company and the Minister do not reach agreement under subsection (2), or if the company fails to pay or take remedial action as agreed, the Minister must refer the matter to the National Director of Public 25 Prosecutions. |
| 5) | A court shall not convict a company or director of an offence under subsection (1) or section 287 if- |
| a) | it is satisfied that the company has performed substantially in terms of an agreement under subsection (2); or |
| b) | the company or director has been convicted of an offence under section 287A. |