If a person is convicted of an offence against section 58 of the Securities Act 1978 (Securities Act), under section 60E of the Securities Act they are automatically banned for a period of 5 years from the date they are convicted, from being:
- a director or promoter; or
- directly or indirectly concerned or taking part in the management of an incorporated or unincorporated body.
The FMA considers that this means that they are not permitted to do any of the following:
- Occupy the position of director in relation to a company
- Be a partner in a partnership or a general partner in a special partnership or limited partnership
- Occupy a position comparable to a director of a company in relation to a corporate or unincorporated body
- Do any of the following in relation to securities offered to the public for subscription,—
- Being instrumental in the formulation of a plan or programme pursuant to which the securities are offered to the public; and
- Being a director where the promoter is a body corporate
- Make, or participate in making, decisions that affect the whole, or a substantial part of the business of the corporation
- Exercise the capacity to affect significantly the company’s financial standing
- Communicate instructions or wishes to the directors of the company where:
- They are not acting merely in a professional capacity
- They know that the directors are accustomed to act in accordance with their instructions or wishes
- They intend that the directors will act in accordance with those instructions or wishes.
The following activities may be permitted:
- Executing decisions or carrying out directions as an employee / agent
- Merely administrative work of the kind performed by a company secretary or accountant
- Carrying out day-to-day routine functions in accordance with predetermined policies of the company
- Giving professional advice, where decisions in relation to the company are plainly made by others.
[1] Tregurtha v Police HC Auckland AP123/93, 15 October 1993.