Companies Act 2014 section 1148

Criminal liability for untrue statements in merger documents

Section 1148 establishes criminal liability for untrue statements included in key merger documents, and sets out who may be held responsible and what defence is available.

• Including an untrue statement in the common draft terms of merger, the directors' explanatory report, or the merger financial statement is a category 2 offence for directors in post when the document was prepared and anyone who authorised its issue.
• If an untrue statement appears in the independent expert's report, the expert and anyone who authorised the report's issue are likewise guilty of a category 2 offence.
• A defence is available where the accused can show they exercised all reasonable care and skill and had reasonable grounds for believing the statement was true up to the time the document was issued.
• The provision derives from earlier regulations transposing EU merger rules and is intended to ensure the accuracy and integrity of all documents produced during a merger process.