By: José Rafael Rivera and Jeovanny Hernández
The term corporate criminal law evidently alludes to the admissibility of the criminal capacity or criminal liability of legal persons, which has generated a whole doctrinal and jurisprudential discussion about the reasons or grounds for it, viz: whether to adopt a model of transfer of liability for the act performed by a third party (legal representative or administrator), also called heteroresponsibility or vicarious liability, or the model of liability for the own act of the legal person, known as the model of self-liability, due to defects in organization and control, which, since it goes beyond the purpose of this article, we will not delve into it.
It is important to express that, despite the fact that the National Congress repealed the articles of the Criminal Code that regulated the criminal liability of legal entities, several crimes that can be committed within legal entities, for example, “corporate crimes”, remained in force. Therefore, it can be argued that the new Honduran Criminal Code, with these criminal types, intends to implement the concept of company handled by the doctrine “determined teleologically”, “to break the paradigms in the definition of the concept of company, moving towards the notion of economic and legal unit that includes the internal law of the company (corporate law) and the external law of the company (commercial and economic law), in which the ultimate subject of the regulation is the company itself and not only the trader” (Sergio S. Zarina Cortés, Derecho Corporativo, edit. Porra, pp. 12-13).
This teleological treatment of the company is what has come to be called corporate law, and it is in the light of this concept that we will analyze the provisions related to “corporate crimes”. Therefore, it is no coincidence that Article 427 of the new criminal law defines “company” for these purposes as “any cooperative, financial or credit entity, foundation, mercantile society or any other entity of analogous nature that participates permanently in the market”, in clear reference to a “corporate”, and not traditional, regulation of the subject. However, our focus will remain on the commercial company as such, on this occasion.
The corporate crimes regulated by the New Penal Code are the following:
Article 422 PC (FALSENESS OF ACCOUNTS, FINANCIAL INFORMATION OR OTHER. The de facto or de jure administrators of a company incorporated or in formation, who falsify the annual accounts or financial information or other documents that should reflect the economic or legal situation of an entity, in a manner suitable to cause economic damage to the same, to any of its partners or to a third party, must be punished with a prison sentence of one (1) to four (4) years and a fine of two hundred (200) to six hundred (600) days, as well as special disqualification for twice the duration of the imprisonment.
In the event that economic damage is caused, the penalty shall be increased by one third (1/3) unless the application of other precepts of this Code results in a more serious penalty, in which case these shall be applied): In the first instance, the concept of “company in formation” jumps to the attention, given that the legal concept of company implies the formalization of a corporate contract or the registration of a program, in the case of the company by public subscription, from which the concept of an entity “in formation” is surpassed. Therefore, the precept seems to be oriented to punish unlawful conducts in the pre-operative stage of a company, attending more to a concept of organizational behavior than legal, since it seems to be a contradiction to speak of a “de jure” administrator or of “partners” of a company not yet incorporated. In any case, this precept, as regards the “company in formation”, must necessarily be related to the concept of “irregular company” regulated by Article 17 of the Code of Commerce and the regulations of the company by public subscription.
Finally, it is important to point out that the same Article punishes the conduct of falsifying information related to the “legal” situation of the company, for example, altering the number of members or the percentage of participation, not limited to the financial accounts, which alters the economic situation of the company, and refers only to those who administer the company in fact or in law with the intention of causing economic damage to the company, its members or third parties, for example, creditors or potential investors. This includes the members of the administrative body of the company, who have participated in the commission of the criminal act, in view of the fact that, in Criminal Law, the presumptions of joint and several liability do not apply, for the decisions adopted by the members of the Board, if any of them did not participate or voted against.
Article 423 PC (ABUSIVE MANAGEMENT. Those who, taking advantage of their majority position in the general meetings of partners or shareholders or in the administrative body of any company constituted or being formed, impose abusive agreements, for their own or another’s profit, to the detriment of the other partners or shareholders and without any benefit to the company, shall be punished with a prison sentence of one (1) to four (4) years or a fine for an amount equal to or up to three times the profit obtained, and special disqualification for profession, trade, commerce or industry for twice the term of imprisonment): This is the criminal type that evidently has more implications, since due to the generally family or closed structure of our mercantile companies, in many instances there is an easily identifiable majority shareholder, with clearly determined interests in relation to the rest of the shareholders in the assembly and in the administrative body. Once again, the concept of “company in formation” jumps out, since it seems to be a contradiction to speak of a meeting or administrative body of a company not yet incorporated. In this sense, we refer to the previous commentary. Likewise, the provision does not seem to take into account the case of the sole director, who alone forms the will of the administrative body without the need to take advantage of a majority situation, and the case of companies with the issuance of preferred shares that do not have the right to vote.
Likewise, since there is no “abuse of rights” in our legal system, as there is in other latitudes, the term “abusive agreements” leaves greater interpretative doubts. In our opinion, the main reference that the Judge can make use of in this case is Article 193 of the Code of Commerce when regulating the assembly agreements that are sanctioned with nullity, and the liability of the administrators regulated in Article 210 and following of the same code. Likewise, the vote in conflict of interest and the so-called “resistance test”, which are mainly regulated in Articles 151, 154 and 210 of the same commercial code, must be referents in the determination of the now called “abusive agreements”. In any case, if the partners agree in the articles of incorporation and bylaws the definition of an “abusive agreement”, or its exceptions, since it is a valid social and contractual agreement in the light of private law, in our opinion it would be valid to qualify the animus doli, so it seems a sensible practice to include such definition in the articles of incorporation and bylaws to escape from the interpretative doubts that will undoubtedly arise.
The precept can undoubtedly be seen in contrast to the rules of the Code of Commerce that regulate the actions to claim the nullity of the assembly resolutions, of the resolutions of the Board of Directors and the liability of the administrators, which prudently impose numerus clausus, procedural assumptions and requirements for the standing of whoever attempts such actions, in order to protect the continuity of the company and the company that owns it, and the third parties in good faith in relation precisely to the resolutions adopted by the company. It will surely open the doors to legal conflicts affecting the operation of commercial companies and their corporate governance.
On the other hand, the precept refers only to those who take advantage of their majority position in meetings or administrative bodies of the company, make the abusive agreement for their own or another’s profit, to the detriment of the other partners and without benefits for the company itself.
It should be noted that many experts believe that these actions should not constitute a crime, because as previously stated, the commercial legislation already establishes the means or remedies that shareholders or partners who consider themselves affected may avail themselves of. However, it should be noted that the doctrine sustains that the criminal offense in reference, more than protecting the loyalty in the corporate relations, protects the patrimonial interests of the minority partners. In order to incur in the crime, it is necessary to take advantage of that majority to impose an abusive agreement, which, as inferred from the article itself, is one that benefits the majority that imposes it, harms the other partners and does not bring any benefit to the company. The agreement is, in any case, legal, and must be produced in accordance with the procedures that empower the majority to adopt it; therefore it is abusive, not harmful or illegal. On the other hand, if the agreement, even if it harms the other partners, represents benefits for the company, the conduct would be atypical (Juan José Gonzales Rus, 2005).
OBTAINING AN AGREEMENT BY MEANS OF A FICTITIOUS MAJORITY. The above penalty shall be increased by one third (1/3) in those cases in which the abusive resolution is adopted, to the detriment of the corporation or any of its partners, by a fictitious majority, obtained by executing any of the following conducts: 1) Denying the right to vote to persons who legally have it; 2) Granting the right to vote to persons who legally lack this right; 3) Abusing blank signatures; or, 4) By any other means similar to the above. The above must be applied without prejudice of the corresponding penalties, as the case may be, for the commission of other crimes.
This criminal offense imposes the same penalties of the previous article increased by one third (1/3), when the abusive agreement is adopted by a fictitious majority, obtained by means of any of the mentioned hypotheses. It should be noted that the difference with the previous criminal offense is that in this case the abusive agreement is adopted in violation of the rules established to achieve the majority, either by denying the vote to those who have the right, granting it to those who do not have the right, abusing blank signatures or by any other similar means. As can be inferred from the article itself, the agreement, besides being abusive, could also be said to be illegal and harmful. The doctrine sustains that in this type of criminal offense the protected legal right is the proper functioning of the company and the rights of the partners.
It is important to point out that there are other criminal offenses that can also be committed within legal entities, namely: Usury, Agreements and Practices Restrictive of Competition, Agiotage, Crimes against Workers, Malicious or reckless Money Laundering, among others. The question is, who should be held criminally liable, the answer is simple, according to the provisions of article 27 of the Criminal Code, the legal representative or administrators, de facto or de jure, who have participated in the punishable action or omission. Therefore, businessmen must take the appropriate measures to avoid the commission of these crimes within their company, and what is the way to do it? Well, it is nothing more than implementing compliance programs that allow them to identify the risks inherent to their business, evaluate them and manage or prevent them.