Page 48 - Profmark_2024_Directors Guide

■ Is a party to the preparation, approval, dissemination or publication of a prospectus
or a written statement contemplated in Section 101, that contains an untrue
statement as defined and described in Section 95.
Any such offences must be referred by the Commission to the National Prosecuting
Authority (NPA) for trial in the Magistrate’s Court.
It is also an offence to fail to satisfy a compliance notice issued in terms of this Act,
however should an administrative fine have been imposed by a court in respect of the
non-compliance, then no person can also be prosecuted for such an offence.
In terms of Section 214(4), if a company contravenes Section 99(1) (2), (3), (4),
(5), (8) or (9) (which deals with general restrictions on offers to the public), then
every director or prescribed officer of the company who knowingly was a party to the
contravention is guilty of an offence and liable to any other person for any losses
sustained as a consequence of that contravention.
Such offences may also lead to directors also incurring civil liability.
All other offences may lead to a fine or up to twelve months imprisonment (or both).
Civil Liability
A Breach of Fiduciary Duty
A director is generally liable for a breach of fiduciary duty (in accordance with the
common law principles relating thereto), for any losses damages or cost sustained by the
company from breach of Sections 75, 76(2), 76(3)(a) or (b) (relating to non-disclosure
of personal financial interests, misusing the position as director to gain personal
advantage, or not acting in good faith and for proper purpose or in the best interests of
the company).

Delict
A director is generally liable, in accordance with the principles of common law relating
to delict for any loss, damages or costs sustained by the company as a consequence of
any breach by the director of a duty contemplated in Section 76(3)(c) (acting with the
degree of care, skill and diligence that may be reasonably expected of such a person),
or a duty as set out per the MOI, or any provision of the Act not otherwise mentioned in
Section 77.
The code of conduct for directors as set out in Section 76 of the Act is extended to
members of committees even if the member is not a director on the board, and thus the
consequent liability relating to the transgression of any such duties will also apply to
members of the committees.

46