CMS Expert Guide To Mandatory Reporting Of Criminal Offences For Companies And Their Responsible Persons in South Africa

In South African law, the obligation to report corporate crimes such as corruption, theft, fraud, extortion, forgery or uttering a forged document involving an amount of R 100,000.00 or more, is regulated by the Prevention and Combating of Corrupt Activities Act (“the Act“).  

Section 34 of Act confers certain obligations on persons that hold a position of authority.

These obligations require any person who holds a position of authority who knows or ought reasonably to have known or suspected that any other person has committed an offence of corruption, theft, fraud, extortion, forgery or uttering a forged document involving an amount of R 100,000.00 or more is required to report such knowledge or suspicion, or cause such knowledge or suspicion to be reported to the Directorate for Priority Crimes Investigation.

A ‘person who holds a position of authority’ includes the manager, secretary or a director of a company; any person who has been appointed as chief executive officer or equivalent officer of any corporation, entity or organisation; any other person who is responsible for the overall management and control of the business of an employer; or any other person who has been appointed in an acting or temporary capacity in relation to the positions referred to above.

The failure to report in terms of section 34 of PACCA is a criminal offence and carries the penalty of a fine or imprisonment of a period of up to ten years.

The crimes mentioned above must be referred to the Directorate for Priority Crimes Investigation. Depending on the company and the individuals involved, certain information might be reported in the media and the company might suffer reputational damage. Further to this, and to the extent that certain statutory obligations and/or contractual obligations are contravened as a result of the criminal offence in question, this may expose a company to further civil and/or statutory liability.

Yes, in terms of South African law, if a person belonging to a company unlawfully and intentionally engaged in conduct that furthers the commission of a crime by somebody else, they can be held liable as an accomplice.

In addition, helping someone who committed the crime to evade justice can further result in an individual working for a company being charged with the crime of being an accessory after the fact.