383 Court may disqualify directors

(1)

Where—

(a)

a person has been convicted of an offence in connection with the promotion, formation, or management of a company (being an offence that is punishable by a term of imprisonment of not less than 3 months), or has been convicted of a crime involving dishonesty as defined in section 2(1) of the Crimes Act 1961; or

(b)

a person has committed an offence for which the person is liable (whether convicted or not) under this Part; or

(c)

a person has, while a director of a company and whether convicted or not,—

(i)

persistently failed to comply with this Act, the Financial Markets Conduct Act 2013, the Takeovers Act 1993, or the takeovers code in force under that Act or, if the company has failed to so comply, persistently failed to take reasonable steps to obtain compliance with those Acts or the code; or

(ii)

been guilty of fraud in relation to the company or of a breach of duty to the company or a shareholder; or

(iii)

acted in a reckless or incompetent manner in the performance of his or her duties as director; or

(ca)

a person has been prohibited in a country, State, or territory outside New Zealand from carrying on activities that the court is satisfied are substantially similar to being a director or promoter of or being concerned or taking part in the management of a body corporate; or

(d)
[Repealed]

(e)

a person has become of unsound mind,—

the court may make an order that the person must not, without the leave of the court, be a director or promoter of, or in any way, whether directly or indirectly, be concerned or take part in the management of, a company permanently or for a period specified in the order.

(1A)

The court may make an order under this section permanent or for a period longer than 10 years only in the most serious of cases for which an order may be made.

(2)

A person intending to apply for an order under this section must give not less than 10 days’ notice of that intention to the person against whom the order is sought, and on the hearing of the application the last-mentioned person may appear and give evidence or call witnesses.

(3)

An application for an order under this section may be made by the Registrar, the FMA, the Official Assignee, or by the liquidator of the company, or by a person who is, or has been, a shareholder or creditor of the company.

(3A)

Subsection (3B) applies on the hearing of—

(a)

an application for an order under this section by the Registrar, the FMA, the Official Assignee, or the liquidator; or

(b)

an application for leave under this section by a person against whom an order has been made on the application of the Registrar, the FMA, the Official Assignee, or the liquidator.

(3B)

The Registrar, the FMA, the Official Assignee, or the liquidator (as the case may be)—

(a)

must appear and call the attention of the court to any matters that seem to him, her, or it to be relevant; and

(b)

may give evidence or call witnesses.

(4)

An order may be made under this section even though the person concerned may be criminally liable in respect of the matters on the ground of which the order is to be made.

(4A)

If conduct by a person constitutes grounds for making an order under any 1 or more of this section, section 44F of the Takeovers Act 1993, and subpart 6 of Part 8 of the Financial Markets Conduct Act 2013, proceedings may be brought against that person under any 1 or more of those provisions, but no person is liable to more than 1 order under those provisions for the same conduct.

(5)

The Registrar of the court must, as soon as practicable after the making of an order under this section, give notice to the Registrar that the order has been made and the Registrar must give notice in the Gazette of the name of the person against whom the order is made.

(6)

Every person who acts in contravention of an order under this section commits an offence and is liable on conviction to the penalties set out in section 373(4).

(7)

In this section, company includes an overseas company.

Compare: 1955 No 63 s 189; 1988 No 236 s 4

Section 383(1): amended, on 1 April 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Section 383(1)(a): replaced, on 1 May 2015, by section 54 of the Companies Amendment Act 2014 (2014 No 46).

Section 383(1)(c)(i): replaced, on 25 October 2006, by section 25 of the Securities Amendment Act 2006 (2006 No 46).

Section 383(1)(c)(i): amended, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Section 383(1)(ca): inserted, on 22 November 2006, by section 14 of the Companies Amendment Act (No 2) 2006 (2006 No 62).

Section 383(1)(d): repealed, on 29 February 2008, by section 25 of the Securities Amendment Act 2006 (2006 No 46).

Section 383(1A): inserted, on 1 April 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Section 383(3): replaced, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).

Section 383(3A): inserted, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).

Section 383(3B): inserted, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).

Section 383(4A): inserted, on 25 October 2006, by section 25 of the Securities Amendment Act 2006 (2006 No 46).

Section 383(4A): amended, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).