Commentary on Article 202-1. Failure to Provide Information or Submission of Knowingly False Information by Officials of an Issuer of Securities of the Criminal Code of the Republic of Kazakhstan
Failure by officials of an issuer of securities to provide information to state authorities and holders of securities, or submission of knowingly false information to them for the purpose of obtaining property benefits, resulting in substantial damage to holders of securities or to the issuer — shall be punishable by a fine in the amount of three hundred to five hundred monthly calculation indices, or in the amount of the salary or other income of the convicted person for a period of three to five months, or deprivation of the right to hold certain positions or engage in certain activities for a period of up to five years, or corrective labour for a period of up to two years, or arrest for a period of up to six months, or imprisonment for a period of up to one year, with deprivation of the right to hold certain positions or engage in certain activities for a period of up to three years or without such deprivation.
The public danger of failure by officials of an issuer of securities to provide information or their submission of knowingly false information is expressed in the fact that, as a result of its commission, significant damage is caused to the economy of our state.
The object of the crime under consideration is the public relations arising in the course of the circulation of securities and regulating transactions involving securities.
The subject matter of the crime is a security. In accordance with Part 1 of Article 129 of the Civil Code of the Republic of Kazakhstan, a security is a document that, in compliance with the established form and mandatory details, certifies property rights, the exercise of which is possible only upon its presentation. In accordance with Article 130 of the Civil Code of the Republic of Kazakhstan, securities include bonds, shares and other documents that are classified as securities by legislative acts or in accordance with the procedure established by them.
The objective side of the crime consists of committing the following acts:
- failure by officials of an issuer of securities to provide information;
- submission by officials of an issuer of securities of knowingly false information to state authorities and holders of securities;
- causing substantial damage to holders of securities or to the issuer;
- the existence of a causal relationship between the above-mentioned acts and the consequences that have occurred.
The concept of a state authority is provided in the Law of the Republic of Kazakhstan “On Administrative Procedures” dated 27 November 2000 (as subsequently amended and supplemented).
Holders of securities are recognised as their owners and nominal holders. The latter are professional participants in the securities market who, in accordance with an agreement and in the interests of the owners of securities, carry out transactions involving securities in their own name or at the expense of such owner.
An issuer, in accordance with Paragraph 90 of Article 1 of the Law of the Republic of Kazakhstan “On the Securities Market”, is a legal entity that issues equity securities in accordance with the current legislation of the Republic of Kazakhstan.
In accordance with Article 22 of the Law of the Republic of Kazakhstan “On the Securities Market”, the issuer is obliged, within 10 calendar days after the state registration of an issue of equity securities and before the commencement of their placement, to publish in the mass media a notice regarding the placement of equity securities among an unlimited number of investors.
In accordance with Article 21 of the aforementioned Law, when placing equity securities, the issuer is obliged, upon the investor's first request, to provide the investor with the prospectus of the issue of equity securities or a copy thereof for review.
The issuer has the right to commence placement of the equity securities issued by it only after their issue has been registered. In this regard, the issuer is obliged to submit an emission prospectus to the registration authority, which must contain information on the financial and economic activities of the issuer, the balance sheet as of the end of the last quarter preceding the adoption of the decision to issue equity securities, the methodology for determining the amount of income, etc.
Failure to provide information is an omission on the part of an official of an issuer of securities and is therefore recognised as unlawful in all cases where it is committed contrary to the law. At the same time, liability under this Article may arise provided that, in accordance with their functional duties, the guilty person was required to provide such information and had the opportunity to do so.
In this case, it appears logical to consider knowingly false information as knowingly incomplete and inaccurate information that does not make it possible to obtain a reliable picture of the quantity and types of securities, the name and location of the issuer, as well as information that does not correspond to reality concerning securities held in the personal accounts of holders of securities or the issuer.
As a result of the submission by officials of an issuer of securities of knowingly false information for the purpose of obtaining property benefits, substantial damage generally occurs, since the relevant state authorities or holders of securities, having been misled, are unable to respond adequately to possible violations and prevent the unlawful actions of officials.
A mandatory condition for criminal liability for this crime is the causing of substantial damage. The concept of substantial damage is defined by the legislator in the Note to Article 189 of the Criminal Code of the Republic of Kazakhstan. A causal relationship between socially dangerous acts and the consequences that have occurred must necessarily be established.
The subject of the crime is officials. The concept of an official is provided in Paragraph 3 of the Note to Article 307 of the Criminal Code.
The subjective side of the crime under analysis is characterised solely by the presence of direct intent. An official, for the purpose of obtaining property benefits, is aware of the socially dangerous nature of their act, namely, that they are failing to provide information or are submitting knowingly false information concerning securities held in the personal accounts of holders of securities or the issuer, foresees the occurrence of substantial damage and desires the occurrence of such consequences. The purpose is to obtain property benefits.
Commentary from 2007 to the Criminal Code of the Republic of Kazakhstan by the Honoured Figure of Kazakhstan, Doctor of Law, Professor, Academician of the Kazakhstan National Academy of Natural Sciences, I.SH. BORCHASHVILI.
Date of amendment of the act: 02.08.2007
Date of adoption of the act: 02.08.2007
Place of adoption: NONE
Authority that adopted the act: 180000000000
Territorial scope: 100000000000
Registration number of the regulatory legal act assigned by the rule-making authority: 167
Status of the act: new
Scope of legal relations: 028000000000
Form of the act: COMMENTARY
Legal force: 1900
Language of the act: Russian
Attention!
Law and Law Law Law draws your attention to the fact that this document is basic and does not always meet the requirements of a particular situation. Our lawyers are ready to assist you in legal advice, drawing up any legal document suitable for your situation.
For more information, please contact a Lawyer / Attorney by phone: +7 (708) 971-78-58; +7 (700) 978 5755, +7 (700) 978 5085.
Constitution Law Code Standard Decree Order Decision Resolution Lawyer Almaty Lawyer Legal service Legal advice Civil Criminal Administrative cases Disputes Defense Arbitration Law Company Kazakhstan Law Firm Court Cases Declaration Decree Order Resolution Decision Report Conclusion Statement Conclusion Convention Contract Memorandum Methodology Norms Note Rules Program Charter Charter Article Commentary Resolution Regulations Protocol Draft Program Rules Messages
