Shareholder’s Right to Initiate Criminal Proceedings Against a Managing Director for Misappropriation of Corporate Assets
Where the managing director of a juristic person dishonestly appropriates the property or funds of that juristic person for his own benefit, the juristic person is the direct injured party. However, if the wrongdoer is himself the person ordinarily empowered to act on behalf of the juristic person, the law does not require the injured entity to remain remediless merely because its authorized representative is the very offender. In such circumstances, a shareholder or partner may step forward as an injured person for the purpose of lodging a criminal complaint and initiating criminal proceedings against the wrongdoer. This principle was recognized by the Supreme Court in Decision No. 1250/2521 (Grand Chamber), which held that where the managing partner of a registered juristic entity misappropriates the property of that entity, any one of the partners may be regarded as an injured person and may validly authorize the filing of a complaint.
In the present case, Mr. Wanchai, as Managing Director of Siam Business Co., Ltd., allegedly misappropriated THB 1,000,000 belonging to the company. Although the company is a separate legal entity, the fact that the alleged offender is the company’s own managing director creates a conflict that effectively prevents the company from acting through its normal representative channels. Accordingly, a shareholder such as Mr. Withoon is legally entitled to file, or cause to be filed, a criminal complaint against Mr. Wanchai on the basis that he stands in the position of an injured person in relation to the offence committed against the company.
On the criminal classification, the conduct falls within the offence of criminal misappropriation, and depending on the precise facts—particularly whether the accused had been entrusted with management of the company’s assets in a fiduciary or managerial capacity—the matter may also engage the aggravated form relating to a person entrusted with another’s property or property jointly owned by others. Thai law separately recognizes criminal misappropriation under Sections 352–354 of the Penal Code, with Section 353 specifically addressing dishonest breach of duty by a person entrusted to manage another’s property.
As a matter of procedure, because misappropriation is a compoundable offence, the complaint must be lodged within three months from the date on which the injured person knows both the fact of the offence and the identity of the offender. Delay beyond that period may bar the complaint. Accordingly, the shareholder should act without delay and support the complaint with documentary evidence such as company registration records, the list of shareholders, board or management documents, bank statements, payment records, accounting ledgers, audit materials, and any documentary trail showing the unauthorized diversion of company funds.
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Model Conclusion
Therefore, in a case where the managing director of a juristic person has himself committed criminal misappropriation of the juristic person’s assets, a shareholder may lawfully be treated as an injured person competent to lodge a criminal complaint and pursue criminal process against the offender. The rationale is that the law cannot permit the offender’s own representative status to obstruct the protection of the juristic person. Hence, Mr. Withoon, as a shareholder of Siam Business Co., Ltd., may validly file a criminal complaint against Mr. Wanchai for misappropriation of the company’s funds.