The investigation and the investigator

When the inquiry request is granted, the Enterprise Chamber appoints one or more investigators (though usually one). The investigator has far-reaching powers. They are granted access to the complete administration and all those involved within the legal entity are obliged to cooperate with the investigation. The investigator produces a report of their findings. With this report (which is filed with the registry of the Enterprise Chamber), the first phase of the inquiry procedure is concluded.

Guidelines for investigators

The investigator has extensive powers. In terms of substance, the investigator is bound by the Guidelines for Investigators in Inquiry Procedures. These Guidelines contain rules concerning the preparation, implementation, application of the principle of hearing both sides and reporting of the investigation.

Plan of approach

Upon receipt of the case file, the investigator prepares a plan of approach (as requested in the operative part of the decision). The plan of approach sets out the investigator’s view of the subject matter and the method of investigation. During the investigation, the investigator must inform the parties if material deviations from the plan are necessary. The parties may provide input on the plan. The plan must in any event include a description of the subject of the investigation following interpretation of the operative part, the investigation questions, how the principle of hearing both sides will be applied and the various stages with a timeline and budget.

Investigation costs

Initially, the costs are borne by the legal entity. If it becomes clear that the legal entity cannot bear these costs, in practice the applicant will be asked to provide security for them. Depending on the outcome of the investigation, the costs may later be recovered from the applicant or the board.

The costs are determined in advance by the Enterprise Chamber (Article 2:350(3) BW) on the basis of the budget in the plan of approach. The investigator does not start work until the budgeted amount (as an advance) has been paid to them. The Enterprise Chamber decides on the final costs by order after giving the parties an opportunity to be heard.

Conduct of the investigation

As mentioned, the investigator has far-reaching investigative powers. They are entitled to inspect the books, records and other data carriers of the legal entity (Article 2:351(1) BW). In the event of refusal, they may request access through the delegated judge (Article 2:352(1) BW).

Hearing from (actual) board members, supervisory board members or other persons involved (such as the accountant, employees or works council) forms an essential part of the inquiry. This is done through interviews. Persons interviewed are not permitted to coordinate their statements in advance (Article 2:351(1) BW).

Given these powers, the investigator must have a policy on communication and on their duty of confidentiality. The investigative information may also relate to trade secrets. The investigator must treat such information with extra care.

The investigation report

The investigator may make use of interim reports. The final outcome of the investigation is set out in the investigation report (Article 2:353(1) BW). Its primary function is to answer the investigation questions. Its practical function, however, lies in enabling the Enterprise Chamber to determine mismanagement and to impose measures ‘if it appears from the report that mismanagement has occurred’ (Article 2:355(1) BW).

In the report, the investigator must refrain from characterising conduct as mismanagement or making recommendations about possible measures, determining responsibility for mismanagement or recovering costs under Article 2:354 BW.

The report is filed with the registry of the Enterprise Chamber (Article 2:353(1) BW), which occurs when the Enterprise Chamber formally notifies the parties that the report has been filed. Filing marks, first and foremost, the end of the first-phase procedure and thus the end of the investigator’s task. It also triggers the period within which a second-phase request may be made.