By virtue of Law 5122/2024, the provisions of Directive (EU) 2019/1151 relating to “disqualified directors” were transposed in Greek legislation. The newly adopted measures aim to prevent fraudulent or other abusive behavior by refusing the appointment of a person as a director of a company, taking into account the former conduct of that person in their own territory, as well as on the basis of information provided from other Member States.
Meaning of “Disqualified Director”
A disqualified director is a natural person disqualified from managing corporate affairs because:
- Either they have been irrevocably convicted for the criminal offenses of Articles:
- 197 to 202 of Law 4738/2020, regarding violations of debt settlement regulations and second chance provisions,
- 187, 187A, 187B, 236, 237, 372, 374, 375, 380, 385, 386, 386A, 386B, 390, 394, 394a, 395, 397, 404 of the Penal Code (Law 4619/2019), concerning criminal organizations, terrorist acts – terrorist organizations, criminal support, bribery of an employee, bribery of judicial officials, theft, aggravated theft, embezzlement, robbery, extortion, fraud, computer fraud, subsidy fraud, breach of trust, acceptance and disposal of crime products, aggravated acceptance and disposal of crime products, obstruction of competition, defrauding of creditors, and usury respectively,
- 28 to 31 of Law 4443/2016, regarding market abuse,
- 176 to 179 of Law 4548/2018, regarding violations of the legislation of sociétés anonymes,
- 155 of Law 2960/2001, regarding smuggling,
- 2 of Law 4557/2018, regarding the prevention and suppression of money laundering and terrorism financing,
- Or they have been deemed as disqualified directors in another Member State of the European Union on the basis of the criminal offences detailed in point a).
No provision has been introduced that would require persons applying to become directors to declare whether they are aware of any circumstances which could lead to a disqualification.
Consequences of the disqualification
Disqualified directors shall not be appointed as:
- members of the Board of Directors (BoD) in a Société Anonyme (AE),
- managers of a Limited Liability Company (EPE), a Private Company (IKE), and a Limited Partnership (ΕΕ),
- representatives or proxies in branches of companies limited by capital,
- liquidators,
- representatives of a legal entity appointed to the BoD of a Société Anonyme, as defined in art. 77 para. 5 of Law 4548/2018,
- substitutes of a corporate organ of a company limited by capital,
- representatives having been granted the power to bind a company against third parties and represent it in court.
Those restrictions apply both at the establishment of the company and during the course of its operation. The appointment of a disqualified director in the above roles is null and void.
Duration of disqualification
The disqualification shall be imposed for a period of 15 years in case a felony has been committed, and 5 years in case of a misdemeanor. The disqualification period shall commence from the issuance of an irrevocable judgement.
Registry of Disqualified Directors
A Registry of Disqualified Directors shall be established within the General Commercial Registry. The Registry shall be managed by the Information Systems Support and Development Service of the General Commercial Registry – One-Stop Service of the Union of Hellenic Chambers of Commerce. The registry shall be accessible by the public authorities of art. 6 of Law 4557/2018, the Money Laundering Authority, and the Business Registers Interconnection System (BRIS). Individuals may access the Registry data if they have a special legitimate interest, in accordance with art. 5 para. 2 of the Code of Administrative Procedure (Law 2690/1999).
Use of Information Systems for Disqualified Directors and Disqualification Procedure
Data on disqualified directors shall be electronically obtained from other public registries, and where required, through the Interoperability Center of the General Secretariat for Information Systems and Digital Governance, particularly from the General Commercial Registry (GEMI), the Insolvency Registry of the Integrated System of Justice Case Management, and the “e-justice” portal.
The information systems of GEMI and the One-Stop Service shall be interconnected with the Registry of Disqualified Directors and shall block the appointment of registered individuals in the roles from which they have been excluded.
Data Exchange with Registries of other Member States
The General Commercial Registry shall exchange information with other Member States of the European Union through the “e-justice” platform. The exchange shall include the personal data of disqualified directors, the duration of and the reasons for disqualification. The General Commercial Registry shall also respond electronically to requests from other Member States for any related information.
Management of Personal Data of Disqualified Directors
The directorate of art. 20 para. 1 of Law 4919/2022 shall be charged with the processing of personal data. It shall also assess electronically the information required in relation to the disqualification of an individual in order to prevent any fraudulent or abusive behavior and to ensure the protection of all persons interacting with companies or branches.
Personal data transmitted for these purposes shall be processed in accordance with Regulation (EU) 2016/679 (General Data Protection Regulation) and Law 4624/2019. Those data may not be stored for a period longer than necessary, and in any case for no longer than 5 years from the completion of the disqualification period.
Penalties for Disqualified Directors
A disqualified director who knowingly conducts corporate management activities shall be subject to a fine of EUR 20,000 – 500,000.
A company that knowingly entrusts the management of its corporate affairs to a disqualified director shall be subject to a fine of EUR 50,000 – 1,000,000.
The above fines shall be imposed by decision of the Head of the General Directorate of Market and Consumer Protection of the Ministry of Development. An appeal against the decision imposing a fine may be lodged before the General Secretary of Commerce of the Ministry of Development within 20 days of the date the decision is notified to the individual/company.
The fine is reduced by half if the individual/company does not lodge an appeal and pays the imposed fine within 20 days of the date the decision is notified to the them. Such payment shall be deemed as an automatic waiver of the right to lodge an administrative appeal.
Further provisions
Issues relating to the access of individuals to the registry, the interconnection with other public registries, and any other issues required for the operation and updating of the Registry of Disqualified Directors may be determined by means of a Joint Ministerial Decision (of the Ministers of Development, Finance, Labor, Justice and Digital Governance) as well as a decision of the Governor of the National Transparency Agency.
