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Deposit Takers Act 2023

Enforcement - False or misleading declarations, representations, and other information

176: Liability of directors if licensed deposit taker or associated person commits offence

You could also call this:

"Directors can be in trouble if their company breaks the law and they knew or should have known about it"

Illustration for Deposit Takers Act 2023

If you are a director of a licensed deposit taker or an associated person, you can be guilty of an offence if your company breaks the law. This can happen if the law-breaking act was done with your permission or consent. You can also be guilty if you knew, or should have known, that the law was being broken and you did not try to stop it.

You must have known that the offence was happening, or about to happen, and not done anything to prevent it. If you did not take reasonable steps to stop the law-breaking, you can be held responsible.

The offence in question is against section 175, and if you are found guilty, you will be liable as a director.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS571049.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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Part 5Enforcement
False or misleading declarations, representations, and other information

176Liability of directors if licensed deposit taker or associated person commits offence

  1. If a licensed deposit taker or an associated person is convicted of an offence against section 175, every director of the deposit taker or associated person is guilty of the offence if it is proved—

  2. that the act that constituted the offence took place with the director’s authority, permission, or consent; and
    1. that the director—
      1. knew, or could reasonably be expected to have known, that the offence was to be or was being committed; and
        1. failed to take all reasonable steps to prevent or stop it.