Friday, Jun 05th

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Editorial - Preventive effect

Readers may have been a bit surprised about the recent report (see Saturday paper) by the Prosecutor's Office that it wants to make more use of the possibility to conduct civil inquiries at particularly government-owned companies in Curaçao and St. Maarten where mismanagement is suspected. The Civil Codes of both countries allow for such initiatives in the general interest.

Some have queried since then whether this is really a primary task for law enforcement agencies. After all, these companies have articles of incorporation and supervisory boards, while there are also corporate governance rules that include financial audits and reporting.

The feeling apparently is that despite all existing safeguards mismanagement continues to occur to the extent that the prosecution believes it's necessary to do something about it. As stated, the social cost can be substantial and this step is clearly intended to better defend society against these practices.

Mind you, permission for such inquiries has to be requested from the Court of Justice, which won't take this lightly. Before that the prosecution must confront the company with its objections calling for appropriate action and only when the latter remains forthcoming is the inquiry request submitted.

Moreover, the first one started in Curaçao in 2013 and is still ongoing, so it obviously regards a thorough and meticulous process. Nevertheless, local government-owned entities would do well to take heed, because there are indications the next inquiry actually will take place in St. Maarten sooner rather than later.

Which one of the companies it concerns is not known. Therefore, all should prepare and have their matters in order to avoid undesirable consequences for everyone involved, perhaps even the shareholder representative.

As pointed out, mismanagement does not have to go hand-in-hand with crime, but it may. If so, there will be legal repercussions for those responsible, of course, and if not, the judge may take corrective measures.

Authorities expect a structural execution of this competence will have a preventive effect. That alone might be worth it.