TRADE CARE­FULLY

With com­pa­nies col­laps­ing ev­ery day due to Covid-19, di­rec­tors and man­agers may face per­sonal li­a­bil­ity for reck­less trad­ing

Financial Mail - - ON MY MIND -

An econ­omy un­der­go­ing se­vere dis­tress poses very spe­cific chal­lenges to di­rec­tors and se­nior man­agers. Per­haps the most im­por­tant of th­ese chal­lenges is the ne­ces­sity to avoid trad­ing reck­lessly — which threat­ens to ex­pose th­ese di­rec­tors to claims of per­sonal li­a­bil­ity.

It’s an im­per­a­tive grounded in sec­tion 22(1) of the Com­pa­nies Act, which says that “a com­pany must not carry on its busi­ness reck­lessly, with gross neg­li­gence, with in­tent to de­fraud any per­son or

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