PART 3PENAL PROVISIONS

It is a criminal offense for the founders, the chief executive officer, the general manager, the general director or the deputy general director of a public limited company to issue shares before the registration of the company or, at any time, when the registration is proved to be fraudulent or that the company is improperly formed.

The following shall face a criminal charge:

1 those who, knowingly, through the notarized statement of subscription and payment or on the depository’s certificate, have certified true and accurate subscriptions they knew were fictitious and have declared that funds that have not been definitely made available to the company, were actually made;

2 those who will have delivered to the notary or to the depositary a list of shareholders or subscription and payment forms stating fictitious subscriptions or payments of funds that have not been definitely made available to the company;

3 those who knowingly, by fictitious subscription or payment or by publication of subscription or payments that do not exist or any other false facts, have obtained or attempted to obtain subscriptions or payments;

4 those who, knowingly, in order to initiate subscriptions or payments, have published the names of designated persons, untruthfully, as being or expected to be related to the company in any capacity; those who fraudulently, have allocated to a contribution in kind, a higher valuation than its real value.

Shall face a criminal charge those who knowingly negotiated:

Shall face a criminal charge, company management, who in the absence of inventory or through fraudulent inventory have knowingly distributed fictitious dividends to shareholders or members.

Shall face a criminal charge, company management who have knowingly, even in the absence of any distribution of dividends, published or presented to shareholders or members, with a view to conceal the real situation of the company, summary financial statements not giving, for each fiscal year, a fair view of transactions of the fiscal year, of the financial situation and of the assets of the company at the expiration of said period.

Shall face a criminal charge, company management who have not filed, in the month following their approval, the summary financial statements.

Shall face a criminal charge, the manager of a private limited company, the directors, the chief executive officer, the general manager, the deputy general manager, the president of a simplified public limited company, the general director or the deputy general director who, in bad faith, have used company assets or credit, knowing that it was contrary to its interests, for for personal material or moral purposes or for the benefit of another legal entity in which they have direct or indirect stake.

Shall face a criminal charge, company management who knowingly:

2 fail to, immediately precede or follow the company name, in legible characters, by the company form, the amount of its stated capital, the address of its headquarters and the registration number at the registry of commerce and securities.

Shall face a criminal charge, company management of a foreign company or a foreign national, whose branch, beyond a period of two (2) years, has neither been attached to an existing company or company to be formed under the laws of one of the States parties, nor had been removed under the conditions set forth in article 120 above.

Shall face a criminal charge those who knowingly prevented a shareholder or a member to attend a general meeting.

Shall face a criminal charge, company management who, knowingly, fail to establish minutes of general meetings in the forms required by this uniform Act.

Shall face a criminal charge, directors, the chairman of the board of directors, the chief executive officer, general manager, deputy general manager, general director, deputy general director of a public limited company or the president of a simplified public limited company who, during an increase of capital, has issued shares or shares denominations:

4 without the payment of at least a quarter of the nominal value of new shares at the time of subscription;

5 where appropriate, without the full payment of the issue premium at the time of subscription. Criminal charges shall also be brought against individuals referred to in this article who failed to maintain cash shares in their nominative form until they are fully paid up.

Shall face a criminal charge, managers of a private limited company who, during a capital increase, have issued equity interests without payment of at least half of their nominal value at the time of subscription.

Shall face a criminal charge company management who, during a capital increase:

1 failed to enable shareholders to benefit from, proportionately to the amount of their shares, a pre-emptive subscription right for shares issued in cash when this right was not repealed by the general meeting and shareholders did not renounce it;

2 failed to allocate a time limit of twenty (20) days at least for shareholders, from the date of the opening of the subscription, unless such deadline was closed early;

3 failed to allot shares which became available, due to lack of sufficient number of subscriptions on an irreducible basis, to shareholders who subscribed on an irreducible basis to a higher number of shares than they could subscribe on an irreducible basis, proportionately to the rights they have;

Shall face a criminal charge company management who, knowingly, gave or confirmed inaccurate information in the reports submitted to the general meeting convened to decide on the removal of the pre-emptive subscription right.

Shall face a criminal charge, directors, chief executive officer, general manager, deputy general manager, president of a simplified public limited company, general director or deputy general director who has, knowingly, carried out a capital reduction:

2 without submitting the capital reduction project to auditors forty-five (45) days before the general meeting was convened to decide thereon.

Shall face a criminal charge, company management who failed to cause the appointment of auditors or failed to invite them at general meetings.

Shall face a criminal charge, whoever, either in his own name or as a member of an audit firm has knowingly agreed to, performed or maintained auditor’s duties notwithstanding legal incompatibilities.

Shall face a criminal charge any auditor who, either in his own name or as a member of an audit firm has knowingly given or confirmed false information on the position of the company, or who did not disclose to the public prosecutor any wrongful acts of which he was aware.

Shall face a criminal charge, company management or anyone at the service of the company that, knowingly, obstructed audits or verifications carried out by auditors or who refused access, on site, to all useful documents that will enable them to perform their mission, including all agreements, books, accounting documents and registers of minutes.

Shall face a criminal charge, company management that, knowingly, at the time the company equity falls below half of the stated capital due to losses recorded in the summary financial statements:

1 failed to call, within four months following the approval of the summary financial statements that reflect the losses, the extraordinary general meeting to decide, if appropriate, the dissolution of the company;

2 failed to record the early dissolution of the company at the registry of commerce and securities and publish it in a newspaper authorized to publish legal notices.

Shall face a criminal charge, the liquidator of a company who knowingly:

1 failed, within a period of one (1) month from his appointment, to publish in a newspaper authorized to publish notices of the location of the headquarters, the instrument appointing him liquidator and to file decisions declaring the dissolution with the registry of commerce and securities;

2 failed to convene members, at the end of the liquidation, to decide on the final liquidation account, the final discharge of its management and the discharge of his mandate and to record the end of the liquidation process;

3 failed, in the case prescribed in article 219 above, to file his final accounts with the registry of commerce and securities of the location of the headquarters, and to petition in court for their approval.

When the liquidation is acting further to a court decision, shall face a criminal charge, the liquidator who, knowingly:

1 has not, within six (6) months of his appointment, submitted a report on the assets and liabilities of the company under liquidation and on the continuation of liquidation transactions, nor requested the authorizations necessary to complete them;

2 failed, within three (3) months of the end of each fiscal year, to prepare summary financial statements in light of the inventory and a written report in which he gives an account of the liquidation transactions during the preceding fiscal year;

3 failed to enable members to exercise their right to examine company records during the liquidation period, in the same conditions as before;

4 failed to convene members, at least once a year, to report on the summary financial statements in the event the company continues to operate;

5 failed to deposit, in a bank account opened of the company under liquidation, within fifteen (15) days from the decision of distribution, the amounts earmarked for allotment between members and creditors ;

6 failed to deposit, in a capital payment account opened in the accounts of the Treasury, within a period of one (1) year from the end of the liquidation, sums/amounts allocated to creditors or partners and unclaimed by them.

Shall face a criminal charge the liquidator who, in bad faith:

1 has used the assets or credit of the company under liquidation in a fashion/manner/for a purpose he knew was contrary to its interests, for personal gain or to favor another legal entity in which he has direct or indirect interest;

2 has assigned all or part of the assets of the company under liquidation to an individual who, in the company, was a name partner, general partner, manager, and member of the board of directors, general director or auditor, without having obtained the unanimous consent of the members or, failing that, the authorization of the competent court.

Shall face a criminal charge, chairmen, directors or general managers of a company that have issued securities offered to the public:

1 Without a notice is published in a newspaper authorized to publish legal notices prior to any announcement;

2 Without the prospectus and circulars reproduce the information of the notice referred to in the first paragraph of this article, and bearing no mention of the publication of such notice in a newspaper authorized to publish legal notices with reference to the issue in which it was published;

3 Without posters and announcements in newspapers reproduce the same information, or at least an extract of such information with reference to the said notice, and indications of the issue of the newspaper authorized to publish legal notices in which it was published;

4 Without posters, prospectus and circulars showing the signature of the individual or the representative of the company who made the offer and specify whether the offered securities are listed or not, and if so, on which stock exchange.

The same sanctions shall be applicable to persons that served as accessories in the transfer of securities without having complied with the requirements of this article.