An analysis of personal liability of company officers in money laundering offences
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Date
2025-05
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Publisher
National University of Lesotho
Abstract
Lesotho is faced with the challenges of dealing with individuals who commit money laundering
offences under the guise of companies, hoping to hide behind the companies’ separate legal
personality principles. Section 25 of the Money Laundering and Proceeds of Crime Act 2008,
as amended, criminalises money laundering committed by both natural and legal persons.
It is established law in Lesotho under Section 9 of the Companies Act 2011 that companies,
once duly incorporated, have a separate legal personality that affords them the capacity to sue
and be sued in their own names, independent of their incorporators. Section 16 of the
Constitution of Lesotho 1993 recognises the freedom of all persons to associate, even to the
extent of incorporating a company, provided the contemplated incorporation is for a lawful
purpose. Individuals in Lesotho are free to exercise their right to association and incorporate
a company either individually or as a collective. The law recognises that persons so associatin g
to establish a company may not be involved in the day-to-day management of the company;
rather, they may vest such responsibility and authority in company officers. The officers have
a fiduciary duty to act in the best interest of the company and are held personally accountable
for a breach of such duty. The right to freedom of association to incorporate companies and
enjoy the benefits that arise from separate legal personality is limited to the engagement in a
lawful enterprise. Therefore, where persons constitute themselves into a syndicate and
incorporate a company to advance a money laundering enterprise, the law does not permit that.hese officers of the company are the ones that form the requisite mensrea of the company.
Therefore, the mental requirement of forming an intention must be ascribed to individ ua ls
authorised to act on behalf of the company. To identify these company officers, the princip le
of lifting the corporate veil is applied.
In the quest to analyse circumstances where the officers of the company are personally liable
for corporate crimes in money laundering offences, the study inevitably considers the
exceptions to the separate legal personality principle. The study adopts a doctrinal approach
that involves consideration of existing literature on the subject matter. It interrogates the extent
to which the law permits companies to retain their separate legal personality and circumstances
where the veil of incorporation could be lifted to identify company officers who committed
money laundering offences and to hold them personally liable for such offences.
Description
Keywords
Liability, money laundering, offences, company officers