Contributions and Interviews
Breaking the rules of the entrepreneurial game
01. 12. 2017
Uroš Čop
Managing Partner and Board Member
Already as a student I came across with the idea of prof. dr. Šime Ivanjko, who says that “the goal of the entrepreneurial game is a legal and legitimate assets “forfeiture” to other participants in an entrepreneurial game, which is precisely regulated by legal, moral and social rules”, which he wrote in the book entitled Corporate Law. Albeit it is simple and almost mathematically accurate, I did not completely understand it then, but I had the feeling that it is very important and that I would have to address it in the future. I was so right. Mathematically speaking it is the easiest (generally speaking) to compare it with the physical law of conservation of energy, since the amount of assets with which entrepreneurs “play” the entrepreneurial game does not change over time in an isolated system. It could be argued that the total amount of assets over time is preserved. It is the owners and the shape of these assets that change. And this is how I understand an entrepreneurial game. It is won by the one who manages to transfer from the sphere of other entrepreneurs to his sphere more assets than others have transferred from his. However, like any game, the entrepreneurial game must also have its own rules. The general and fundamental rules are written in the second part of the professor’s idea (legal, moral and social rules), and in recent years I have been dealing with the latter.
The result of respecting legal, moral and social rules in an entrepreneurial game should be the victory of the best, i.e. the one who is the most persistent and who is willing to take a step further than the rest. However, this is not always the case. As in sport, there is “doping” also for entrepreneurs, which is reflected in the violation of these basic rules. The easiest and the oldest way to harm a competitor and thus gain an advantage in an entrepreneurial game is to provide false or misleading information about him. With such behaviour, the opponent becomes a compromised person, or even a persona non grata in the entrepreneurial world, and by that actually excluded from the entrepreneurial game. Although in most cases such behaviour is morally and socially disputable, it has no (significant) consequences or it is not punishable by (sufficient) legal sanctions.
However, some entrepreneurs go even so far that they denounce to law enforcement authorities that their competitor has committed a criminal offense, although they know that this is not true. Some entrepreneurs even plant traces of a criminal offence to their competitors. In such cases we talk about the criminal offense of false accusation under Article 283 of the Penal Code (KZ-1) if the alleged offense is prosecuted ex officio. Such a fraudulent attempt to gain an advantage in an entrepreneurial game may have serious and severe consequences for the entrepreneur-denouncer, as it is punishable by imprisonment for up to two years. The law enforcement authorities are obliged to truthfully and fully identify the facts; they mostly detect such false accusations, and they sanction the denouncer. However, too often such an epilogue comes significantly too late. During this time, an entrepreneur who is suspected of committing a criminal offense and subject to a pre-criminal or even criminal procedure has incurred irreparable damage. Such an entrepreneur must apologize to his business partners and explain that he has not committed the alleged actions. Also, these procedures waste a lot of an entrepreneur’s time who instead of devoting it to participate in an entrepreneurial game must devote to his defence. Thus, the damage caused by a fraudulent entrepreneur to a competitor is enormous and too often irreversible. However, all of this was done solely for the purpose of gaining an advantage in the entrepreneurial game and intervening in the assets of a competitor illegally.
The criminal offense of false accusation is systematically regulated by the KZ-1. The police regularly and very carefully investigate the suspicions of such acts, prosecutors prosecute and the courts condemn the perpetrators. But I am convinced that the abuse of the institution of accusation by an entrepreneur in the manner described above should be sanctioned differently than the abuse by a “normal” person. The behaviour of an entrepreneur-denouncer originates from the desire to increase his corporate assets and the consequences are not only in disabling the competitor, but they are significantly broader; they reflect throughout the industry. A state that sanctions “too mildly” or incorrectly people who violate the entrepreneurial game sends a negative message to the international environment, which may also result in the entrepreneurs avoiding such a country.
My concern, however, relates to the latest planned amendment to the Criminal Procedure Act, which is supposed to discontinue the judicial investigation and thus the contradictory nature of the pre-trial procedure. Such an arrangement would have catastrophic consequences for the business environment, since an entrepreneur, who would have the status of a suspect as a result of the acts of an entrepreneur- denouncer, would have the right to participate in the procedure on an equal footing only at the main hearing. It is only in the final stage of the proceedings that he would therefore have the right to rebut the complaints in an adversarial procedure and to get himself back on an equal footing in an entrepreneurial game. Even if the suspected entrepreneur was able to defend his innocence, much more time would have passed by that time than if the suspect had had the opportunity to participate in the proceedings against him from the very beginning, as is the case now. The time component is essential in the entrepreneurial world. We will see, however, what the fate of the said act will be after the National Council has vetoed it.
The state is obliged to enable a fair play to entrepreneurs and to ensure that this is carried out. Unsuitably sanctioning the (entrepreneurial) offenders and the proposed extension of the procedure certainly are of no help.