The liability is also extended to the directors, managers and chief executives of the company, who will now be liable to imprisonment in case of incurring in these conducts.
On August 17, 2023, the Law on Economic Crimes was published. This new regulation introduces and modifies several provisions regulated in the Criminal Code and other legal bodies, such as Law No. 18,046 which regulates Corporations (LSA).
In relation to the LSA, attention has been focused on the new article 134 bis, which criminalizes “abusive agreements”, i.e. the abuse of a majority position on the board of directors or the condition of controller in a corporation.
However, less attention has been given to the new regulation on the delivery or approval of false information on relevant aspects of the company’s assets and situation. The latter as a result of the replacement of article 134 of said law by the following:
“Article 134.- The directors, managers, administrators or main executives of a corporation who in the annual report, balance sheets or other documents intended for the shareholders, third parties or the administration, required by law or by the applicable regulations, which must reflect the legal, economic and financial situation of the corporation, give or approve false information on relevant aspects to know the assets and the financial or legal situation of the corporation, shall be punished with the penalty of imprisonment or reclusion in the medium to maximum degrees”.
“The same penalty shall be imposed on those who keep the accounts of the company, or on the experts, external auditors or account inspectors outside the company, who collaborate in the act described in the preceding paragraph. The penalty shall also be imposed on those who collaborate in the act on the occasion of the rendering of external auditing services by a legal person”.
“If the act refers to an open corporation, the penalty may be increased by one degree. The provisions of the preceding paragraphs shall be applicable as long as the conduct does not constitute another crime punishable by a greater penalty”, concludes the quotation to the law.
It is important to analyze and understand the new version of Article 134 of the Corporations Law, since the old wording only penalized experts, external auditors or account inspectors outside the company who, with their false reports or certifications, mislead shareholders or third parties.
With this new provision, liability is also extended to directors, managers and chief executives of the company, who will now be liable to imprisonment in case of incurring in these conducts.
On the other hand, it is relevant to take into consideration that the crime is even configured when approving documents, in the exercise of their position, that contain false information, thus raising the standards of diligence that directors and executives of a corporation must comply with.
In addition, the new article will penalize the directors, managers, administrators or main executives of a company for the false information they provide for the report of the corporations that require such documentation.
This becomes especially important if we consider that, at the end of 2021, the Financial Market Commission issued General Rule No. 461. This new rule established new requirements for the preparation of annual reports in order to respond to the need of investors of certain companies to know information related to environmental, social and governance criteria.
Additionally, the wording of the new Article 134 explicitly states that the provisions of the new Article 134 shall apply provided that the conduct does not constitute another offense punishable by a higher penalty.
However, in the case of applying the new criterion, the penalty for this crime is set at imprisonment or reclusion in the medium to maximum degrees (from 541 days to 5 years), which may be increased by one degree in the case of open corporations.
Finally, it is advisable to implement effective control systems to ensure the accuracy and reliability of the information presented by the company in its financial statements, as well as in its annual reports or integrated reports.
To discuss these issues, please contact our Corporate and Business team:
Rodrigo Albagli | Partner | ralbagli@az.cl
Álvaro Rosenblut | Partner | arosenblut@az.cl
Vicente Martínez | Senior Associate | vmartinezw@az.cl
Nicolás Zaliasnik | Associate | nzaliasnik@az.cl
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