A few years ago, I invested capital in a company engaged in the manufacturing and trading of pharmaceuticals and cosmetics.
Recently, the director (the company's legal representative) was arrested for investigation into the production and trading of counterfeit pharmaceuticals and cosmetics. I was completely unaware that the company was involved in these illegal activities.
My capital contribution was solely for investment purposes, with the aim of profiting from the company's legitimate business operations. If the director faces criminal prosecution, could I also be held criminally liable in my capacity as a capital contributor?
Reader Duc Hop
Legal Advice:
In principle, contributing capital to a company does not automatically render the contributor criminally liable for offenses committed by the director or other individuals.
Under Article 17 of the 2015 Penal Code, "complicity" refers to a situation where two or more persons intentionally commit a crime together. Therefore, for a capital contributor to face criminal liability as an accomplice, competent authorities must establish grounds proving that the individual was aware of and intentionally participated in the commission of the crime—such as by jointly directing, organizing, aiding, or executing the criminal act. Therefore, if a capital contributor merely invests capital—without knowledge of the company’s production or trading of counterfeit goods and without participating in, supporting, or directing the criminal activities—criminal liability cannot be imposed solely based on their status as a shareholder or capital-contributing member.
However, if investigative authorities can prove that the capital contributor was fully aware of the wrongdoing yet intentionally provided funds or means, or directed or supported the criminal activities, criminal liability may be established depending on their specific role and level of involvement.
Note: Even in cases where a person has withdrawn their entire capital contribution, or indeed never contributed capital at all, they remain subject to criminal liability if they organize, commit, instigate, or aid others in the commission of a crime, in accordance with the law.