Gary Warne | Manager – Legal Services
Are you a manager or director of a company? In terms of The Prevention and Combatting of Corrupt Activities Act, Act 12 of 2004 (“PRECCA”) you are obligated to report corrupt and fraudulent conduct.
In terms of the Act certain persons holding positions of authority are obligated to report corrupt transactions/conduct and other common law offences such as theft, fraud, extortion and forgery to the police.
Section 34(1) is the specific section in the Act which imposes the duty upon persons of authority, such as directors and managers, to report corrupt and fraudulent activity.
Section 34(1) states as follows:
‘any person who holds a position of authority and who knows or ought reasonably to have known or suspected that any other person has committed an offence under Part 1, 2, 3 or 4, or section 20 or 21…, or the offence of theft, fraud, extortion, forgery or uttering a forged document, involving an amount of R 100 000 or more, must report such knowledge or suspicion or cause such knowledge or suspicion to be reported to the police…’
The list of offences to which the Act applies and which are to be reported in terms of section 34(1), are:
- Corruption – Any person who gives or agrees or offers to give or accept any gratification amounting to an unauthorized or improper inducement to act or not to act in a particular manner;
- Offences under Section 20 and 21 of the Act;
- Theft – The unlawful and intentional appropriation of another’s corporeal property;
- Fraud – The unlawful and intentional making of a misrepresentation which causes actual prejudice, or which is potentially prejudicial to another;
- Extortion – The taking from another some patrimonial or non-patrimonial advantage by intentionally and unlawfully subjecting that person to pressure which induces him or her to submit to the taking;
- Forgery – Unlawfully making a false document with intent to defraud to the actual or potential prejudice of another;
- Uttering of a forged document – Unlawfully offering, passing off or communicating a forged document with the intent to defraud, to the actual or potential prejudice of another.
WHERE TO REPORT CORRUPT / FRAUDULENT BEHAVIOUR
All reports of corrupt or fraudulent behaviour must be made to a police official in the Directorate for Priority Crime Investigation (DCPI / HAWKS).
(Full details regarding the reporting process can be accessed on the DCPI’s website.)
CRITERIA FOR REPORTING
No fixed criteria regarding whether reporting is necessary in particular situations are set out in the Act, however the following guidelines can be applied, namely :
- Has the threshold amount been satisfied ?
A first point of consideration would be to determine whether the R100 000,00 threshold has been met.
- Has there been an unlawful conduct ?
Once the threshold amount has been established the next question to be answered is whether there has been any corrupt activity or common law offence.
You are required, at the very least, to have a reasonable suspicion that corruption or fraud is being committed.
Such suspicions have to be supported by evidence, mere speculation is insufficient.
In other words, it has to be established whether there is prima facie or primary evidence of corrupt conduct – which would then necessitate the need for reporting such conduct.
If the facts are inconclusive or if there is doubt whether the evidence meets the threshold to report the conduct in question, the prudent approach would be to report same thereby placing the onus on the authorities to decide whether to investigate and prosecute the person/s in question. Said approach would eliminate the risk of non-compliance with the provisions of section 34(1).