Doctor of Philosophy
Faculty of Law
Alsubaie, Mohammed Bin Fahad Aljiday, Corporate crimes committed during the phase of incorporation of companies in Saudi Arabia: a legal analysis, Doctor of Philosophy thesis, Faculty of Law, University of Wollongong, 2012. http://ro.uow.edu.au/theses/3669
Companies have become major players with enormous economic powers enabling them to cause significant damage to our society. Recent corporate misdeeds and resultant failures significantly contributed to the most recent global financial crisis, which prompted numerous national governments and international organisations around the world to intensify corporate regulation and impose stringent civil and criminal liabilities on wrongdoers. As is the case in many other countries, companies in the Kingdom of Saudi Arabia (KSA) are involved in the commission of crimes, but the laws of the Kingdom remain outdated and therefore ineffective in combating those criminal activities. The present study aims to examine the weaknesses and drawbacks of the legal framework for corporate criminal liability with respect to incorporation of companies under the Companies Law 1965 in the KSA. The crimes that are the concern of this study are primarily related to the constitutional and other documents of companies. However, crimes concerning the formation of company capital are also included in this research as they are directly relevant to the incorporation of companies.
A comparative analysis of the criminal liability provisions carried out in this study reveals that although the law intends to prevent the culpability of corporations in relation to their incorporation, this objective could not be achieved due to several weaknesses inherent in the liability provisions. Some of those weaknesses are: (i) imprecision in defining physical and mental elements of the crimes; (ii) ambiguities in identifying the persons responsible for the offending conduct; (iii) extent of defences that allow the avoidance of liability; and (iv) softness of the penalties for such serious offences.
Findings suggest that the existing provisions need a thorough revision as they are outdated and therefore ineffective in dealing with the contemporary offending conduct of companies in the KSA. This study makes specific suggestions for reforms, among them that the previously mentioned existing ambiguities in the criminal liability provisions be clarified to facilitate the smooth enforcement of the law, and that penalties for conduct constituting an offence be increased, thus creating effective deterrence for the potential offenders. It has been argued that clear provisions of law help prevent corporate crimes and create public confidence in the market.