The right to own shares cannot be forfeited

A man was sentenced by the Court of Appeal to four years of imprisonment for extensive economic crime. In accordance with the prosecution’s request, he was also subjected to a deprivation of rights, including the loss of the right to hold ownership interests in, and exercise certain managerial roles within, Norwegian companies and companies with commercial ties to Norway, for a period of five years.

The Supreme Court concluded that section 56 of the Penal Code does not provide a legal basis for depriving an individual of the right to be a shareholder.

The reasoning is that the wording of the provision is not sufficiently broad. The requirement of legal clarity in criminal law must be strictly applied. According to the text, the right to “carry out a business or activity” may be forfeited, which suggests that only the right to perform active conduct may be restricted. Shares, however, may be held passively, without engaging in any business or activity. The purpose of the deprivation of rights and the interest in effective enforcement and oversight cannot compensate for the lack of sufficient legal grounding in the provision itself.

The Supreme Court notes that the question may be different for ownership in general partnerships, but does not take a position on that issue.

Read the judgment from the Supreme Court (Norwegian only) (PDF)

Area of law: Criminal law, loss of rights, section 56 of the Penal Code

Key paragraphs:  27, 30–31, 38–39

Justices: Falch, Høgetveit Berg, Hellerslia, Sivertsen, Poulsen