NZ Shareholders Members Area

NZSA Policy Statements

Criminal Matters before the Court


NZSA will not comment on a specific criminal charges (for example an employee fraud against a company) while legal action over that activity is ongoing.  

We may however comment in a general sense about the systems and processes we expect companies to have in place to minimise or mitigate activities that result in criminal actions being brought. This will not extend to speculation about whether or not these were relevant to the specific case before the court.
Reasons;

1) Regardless of the circumstances, anyone accused has a presumption of innocence until proven otherwise. Any comment NZSA makes prior to the judgment  could be construed as implying guilt.

2) Any comment NZSA made prior to judgment in regard to specific or perceived problems with the companies systems would be based on speculation. In most cases, we do not know how any alleged offence has occurred until a judgment has been entered.

3) All the systems in the world will not prevent fraudulent activity if the perpetrator is hell bent on carrying it out.   There are many ways this can be done (some very sophisticated) and NZSA accepts that audit and risk processes may take some time to pick them up.

4) Whistle blowing is a very effective way to minimise fraud and show up significant shortcomings. We expect companies to have a suitable policy around this. Please refer to our policy statement titled "Employee Engagement/Whistle Blowing".

5) The NZSA would not generally hold  management or directors responsible providing there were sound protocols and systems in place to prevent fraudulent activity. However, we will look at each instance on its merits at the time a court judgment is made.  Should it transpire that the company did have poor systems and a relatively unsophisticated fraud was perpetrated as a result, NZSA will consider whether to vote against a responsible director or seek disciplinary action against a responsible manager. We would require proof that the company has subsequently instituted suitable policies and protocols to prevent a recurrence and may publicize our position as required.

(Introduced March 2016)