Bankruptcy, Individual Voluntary Arrangement and Winding-up of Companies
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9. What criminal offences are related to bankruptcy?

Some of the bankruptcy offences with imprisonment penalties are summarised as follows.

Bankruptcy Ordinance (Cap. 6) Section

Brief description of the offences

Penalty


43A


Failure to submit annual statement of earnings

Undischarged bankrupts must submit to the Trustee annually a statement of earnings during the preceding year, and details of any property acquired during the period.

 



Liable to imprisonment for up to six months.


129 (1)


Fraudulent Debtors

Any persons who have been adjudicated bankrupt are guilty of an offence if, for example,

(i)

they do not fully divulge to the Trustee all of their properties and their disposal;

(ii)

they fail to deliver to the Trustee all such property in their custody or control;

(iii)

after the presentation of a bankruptcy petition or within 12 months before such presentation (the “Relevant Period”), they conceal or fraudulently remove any part of their properties to the value of $50 or more or conceal any debts due to or from them;

(iv)

they make any material omission or misstatement in any statement relating to their affairs;

(v)

during the Relevant Period, they remove, conceal, destroy, mutilate or falsify any book or document affecting or relating to their properties or affairs;

(vi)

during the Relevant Period, they pawn, pledge or dispose of any properties that they have obtained on credit and have not paid for unless such pawning, pledging or disposing is within the ordinary manner of the bankrupt’s trade.

(vii)

They are guilty of any false representation or other fraud for the purpose of obtaining the consent of the creditors or coming to an agreement with any of them with reference to the debtors’ affairs or bankruptcy.

 

 

 

Liable to imprisonment for up to two years, except for (vi).

 

 

 

 

 

 

Liable on summary conviction to imprisonment for up to one year or upon conviction on indictment to imprisonment for up to five years for (vi)


 

130(1)







130(2)




 



130(3)


Certain offences by persons other than the bankrupt

If any manager, accountant or book-keeper in the employment of the bankrupt commits any act during the Relevant Period to conceal, destroy or falsify any book or document that affects or relates to the bankrupt’s property or affairs, then that person will be deemed to be guilty of an offence.


Where any person pledges or disposes of any property in circumstances that amount to an offence under section 129(1), every person who takes in pawn or pledge or otherwise receives the property, knowing it to be pawned, pledged or disposed of in such circumstances, will be guilty of an offence and liable for imprisonment.




A person who knowingly makes a false statement when proving a debt in bankruptcy or knowingly makes a false statement in an affidavit required under the Bankruptcy Ordinance is guilty of an offence and is liable to a fine and to imprisonment.
 


 

Liable to imprisonment for up to two years.





Liable on summary conviction to imprisonment for up to one year or upon conviction on indictment for up to five years.

 
Liable to a fine and to imprisonment for up to six months.
 


131


Undischarged bankrupt obtaining credit


It is a criminal offence for the bankrupts, for example, to obtain credit of $100 or more either alone or jointly with any other persons, without first informing the persons from whom they obtain credit that they are undischarged bankrupts.

 


 

Liable to imprisonment for up to two years.

 

132


Fraud by bankrupts

Any persons who have been adjudged bankrupt will be guilty of an offence if, for example, they have made or caused to be made any gifts or transfers of or charges on their properties with the intent to defraud their creditors.
 



Liable to imprisonment for up to two years.


133(1)


Gambling etc.

Any adjudged bankrupts who, having been engaged in any trade or business and having outstanding at the date of the bankruptcy order any debts contracted in the course and for the purposes of such trade or business, are guilty of an offence if, for example,  

(i)

they have, within two years before the presentation of the bankruptcy petitions, materially contributed to or increased the extent of their insolvency by gambling or by rash and hazardous speculation and such gambling or speculation are unconnected with their trade or business; or

(ii)

they have, between the date of the presentation of the petitions and the date of the bankruptcy orders, lost any part of their estate by such gambling or rash and hazardous speculation.

(However, in determining for the purposes of this section whether any speculation was rash and hazardous, the financial position of the accused persons at the time that they entered into the speculation will be taken into consideration.)


 

 

 

 

 

 

 

Liable to imprisonment for up to two years.


135


Bankrupt absconding with property

Any persons who are adjudged bankrupt will (unless they prove that they had no intent to defraud) be guilty of an offence if after the presentation of a bankruptcy petition, or within six months before such presentation, they quit Hong Kong and takes with them, or attempt or make preparation to quit Hong Kong and take with him, any part of their properties to the amount of $100  or more, which should by law be divided amongst their creditors.
 


 

 

Liable to imprisonment for up to two years.


136


Debtors concealing themselves to avoid service (bankruptcy documents)

Any persons against whom bankruptcy orders are made will be guilty of an offence if they conceal or absent themselves from their usual or last known place of abode or business, or quit Hong Kong, with intent to avoid service (delivery) of any legal documents in bankruptcy or to avoid examination of their affairs or otherwise to delay any proceedings against them in bankruptcy.
 


 


Liable to imprisonment for up to two years.

 
Companies Ordinance (Cap.32) Section
 

Description of the Offence

 Penalty


156(1)


(Companies Ordinance) Undischarged bankrupts acting as directors


If the undischarged bankrupts act as directors of, or directly or indirectly take part in or are concerned with the management of any company except with the leave (approval) of the court by which they were adjudged bankrupt, then they will be guilty of an offence and liable to imprisonment and a fine.


Liable on summary conviction to imprisonment for up to one year and a fine of up to $150,000, or upon conviction on indictment to imprisonment for up to two years and fine of up to $700,000. 

(For more details of bankruptcy offences, please see the webpage of the Official Receiver’s Office.)

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