In our Newsletter of December 15, 2016, we discussed the inquiry procedure in Curaçao that was initiated for several government owned companies. The inquiry (investigation proceedings) was ordered by the Dutch Caribbean Joint Court of Justice since it found that there were, prima facie, justified reasons to question the correctness of the company’s policy, including amongst others violation of the law, financial reporting or accounting irregularities, insufficient disclosure of information to shareholders or other stakeholders, and conflicts of interest involving the company, its management and/or its shareholders.

After the first phase of the inquiry procedure, the investigation by a court appointed investigator, all the parties involved were given the opportunity to comment on the findings of the appointed investigator as laid down in his report that was submitted to the Joint Court of Justice. It was then a matter of waiting to see how the Joint Court of Justice would assess the findings and deal with issues of (good) corporate governance.

On June 13, 2017, the Joint Court of Justice rendered its final decision. It ruled, for two of the government owned companies, that in the period between October 10, 2010 and September 29, 2012, the rules and practices of good corporate governance have not been applied. It was concluded, inter alia, that others such as the Board of Supervisory Directors and the shareholder (being the Government of Curaçao) of the company had – de facto – taken over the role and accompanying duties of the Board of Managing Directors and thus de management of the company, and that decisions were taken that were not in the interest of the company, due to conflicts of interest. This has led, according to the Joint Court of Justice in its ruling, to mismanagement.

In its ruling, the Joint Court of Justice only addresses the respective corporate bodies (the general meeting of shareholders, the board of supervisory directors and the managing directors) of the companies and attributes responsibility to them. The next step could be that also individuals – members of the corporate bodies – are held accountable (possibly liable) for the mismanagement.