Reconstructing the Criminal Liability of Directors in Nominee Shareholding Schemes: A Comparative and Doctrinal Analysis in Corporate Crime

Abstract

Nominee shareholding schemes have become increasingly prevalent in corporate structures, particularly in jurisdictions where regulatory restrictions limit foreign ownership or impose disclosure requirements. While such arrangements may serve legitimate purposes, they are frequently used to conceal beneficial ownership, facilitate illicit financial activities, and evade legal accountability. In the context of corporate crime, nominee structures create significant challenges in determining the criminal liability of directors, as formal ownership and actual control are often deliberately separated. This study examines the criminal liability of directors involved in nominee shareholding schemes, focusing on the doctrinal and practical difficulties in attributing responsibility within corporate structures. Using a normative juridical approach combined with comparative analysis, this research analyzes legal frameworks and judicial reasoning in selected jurisdictions, with particular reference to Indonesia and common law systems. The study draws on statutory provisions, case law, and scholarly literature to identify inconsistencies and gaps in current approaches. The findings reveal that existing legal frameworks tend to rely on formalistic interpretations of corporate roles, which allow directors to evade liability by distancing themselves from beneficial ownership structures. The lack of clear standards for attributing knowledge, control, and intent further complicates enforcement. In many cases, nominee arrangements are treated as civil or administrative issues rather than criminal matters, despite their potential to facilitate serious offenses such as fraud, money laundering, and corruption. This study proposes a reconstructed model of criminal liability based on a substantive control approach, which emphasizes actual decision-making power, beneficial ownership, and the economic reality of corporate operations. The model integrates principles of corporate criminal liability, including identification theory, vicarious liability, and the doctrine of willful blindness, to establish a more coherent framework for holding directors accountable. The study contributes to the development of corporate criminal law by offering a conceptual and practical framework for addressing nominee shareholding schemes. It also provides policy recommendations aimed at strengthening legal enforcement and enhancing transparency in corporate governance.