Directors who resign may escape liability for misconduct if application to declare them delinquent is not launched soon
Acting Chief Justice Raymond Zondo has repeated details of meetings with former president Jacob Zuma, after a news report. Picture: GCIS
Behaviour that would support a finding of delinquency would include a director or prescribed officer who has intentionally, or by gross negligence, inflicted harm upon the company or a subsidiary, contrary to the provisions of the act, or acted in a manner that amounts to gross negligence, wilful misconduct or breach of trust in relation to the performance of the director's duties.
The clock is ticking to act against those directors that remain directors and who did not resign from relevant company boards within a period of two years. As an alternative to a declaration of delinquency a court may make an order placing a director under probation instead. This would occur under circumstances where the court is satisfied that the declaration is justified, having regard to the circumstances of the company’s conduct and the person’s conduct in relation to the management, business or property of the company at the time.
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