ArticlesFalse or misleading statements to the public

April 17, 2022by George Karanikolas

The “slight reform” of the criminal provisions of the law on SAs (law 4548/2018) worked (again this time) as a follow-up: it arose as a need to harmonize with the changes in the “main” part of the legislation. This kind of thing does not alienate us. The same happened when the previous law was amended, e.g., by Law 3604/2007. And then the criminal provisions of the first did not primarily concern the author of the last. Also, under conditions, it is in principle acceptable: recourse to criminal provisions is justified only as a last resort to deal with a problem.

In our previous article (of 6.3.22) we briefly approached the issue of criminal responsibilities in the context of the SA. Today we will begin a tour of the individual regulations, starting with the first criminal provision of article 176 of Law 4548/2018 on “false or misleading statements to the public”.

According to the letter of the provision, the founder, the member of the board or the director of the company is punished with imprisonment, which can reach up to five years and with a (heavier compared to the past) fine (from 10,000 to 100,000 euros), if they knowingly make a false or misleading statement to the public.

This declaration must (a) concern the coverage or payment of the capital or (b) be made for the purpose of registration in securities issued by the company and concern its elements, which have a material influence on the company’s affairs. In this context, we consider critical to underline the following:

The semantically and evaluatively related article 56 (and article 55) of Law 2190/1920 referred exclusively to “false statements”. Article 176 now covers any “false or misleading” statement. The possible regulatory field of the provision is therefore claimed beyond “lies” and “half-truths”.

Moreover, same as in the past, any (even a simple and non-executive) member of the board of directors can be held criminally liable for a “false or misleading” statement, made even orally.

The fact that the statement comes from an “insider” of the company is considered so important that in some cases even estimates become suspicious, possibly criminal.

Lastly, (unlike in the past) it is sufficient to make a false or misleading statement to the public when it concerns the coverage or payment of the capital: no further purpose is required nor does it have to be proved. The statement alone is enough.

Conclusion: with the new article 176 of Law 4548/2018, the limits of criminally relevant statements are expanded. Therefore, all with a corporate capacity, without exception, must be particularly careful in their public statements, protecting themselves and each other.

The principle of trust is invaluable both socially and economically. The legislator recognizes this and advocates its protection even against abstract risks. If it is ultimately “injured”, then the consequences on a financial (for the company) and legal (for the declarant) level are justifiably severe.

Our message is therefore clear: moderation, prudence and precision in our statements!

George Karanikolas
Senior Associate


P.S. A brief version of this article has been published in MAKEDONIA Newspaper (April 17th, 2022).


Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.

George Karanikolas
Nikis Avenue & 1, Morgenthau st., 54622 Thessaloniki
(+30) 2310 27 80 84

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