Tánaiste Publishes Company Law Enforcement Bill, 2000 "New Office to Enforce Company Law to be Established"Garda Síochana to be Seconded to the Office of the Director

The Tánaiste and Minister for Enterprise, Trade and Employment, Ms. Mary Harney, T.D., today (Monday 3rd July, 2000) announced the publication of the Company Law Enforcement Bill, 2000.

The Bill provides for the establishment of the Office of the Director of Corporate Enforcement. The Director will have statutory responsibility for enforcing and ensuring compliance with company law.

The Tánaiste said "The Director of Corporate Enforcement will lead a multi-disciplinary team comprising staff with legal, accounting, administrative and criminal investigative expertise. In addition to having lawyers and accountants as well as civil servants on the staff, seven members of An Garda Síochána are to be seconded to the Office to assist in its work. This team will have the necessary skills required to adequately investigate suspected instances of corporate fraud and malpractice and, where evidence of such is found, to prepare cases for the prosecution of offenders and/or to seek High Court injunctions against such offenders".

The Director will have a number of functions, chief among these is the investigation of suspected offences under the Companies Acts, the taking of summary prosecutions against offending companies and their officers and, where prosecution on indictment is judged more appropriate, the preparation of cases for prosecution by the Director of Public Prosecutions. In addition to the ability to prosecute errant companies and their officers, the Director will be empowered to seek High Court injunctions preventing persons or companies from continuing with persistent breaches of the Companies Acts.

The Director will also be provided with a range of new powers, not currently available to the Minister, to facilitate the effective discharge of his or her functions.

These will include -

• power to apply for the restriction or disqualification of company directors or officers
• power to seek asset-freezing orders against company directors or officers
• power to seek injunctions against company directors or officers to prevent continuing breaches of the Companies Acts
• power to inspect the books of liquidators and receivers
• power to levy "on-the-spot" fines for breaches of the Companies Acts.

The Company Law Enforcement Bill, 2000 flows directly from the recommendations of the Working Group on Company Law Compliance and Enforcement, established by the Tánaiste, to examine ways in which the level of compliance with and enforcement of company law could be improved. The Group, was chaired by Mr. Michael McDowell, SC (now Attorney General).

The Tánaiste expressed the hope that the establishment of the office of Director of Corporate Enforcement "will be the advent of a new dawn bringing in a new era of greater compliance with and respect for the requirements of company law by those in business".

The Tánaiste said that the conclusions of the Working Group on Compliance and Enforcement and the information coming through the various Tribunals of Inquiry and the investigations undertaken by her Department showed that many people in business had a complete disregard for the requirements of company law.

The Tánaiste said that "not only was it completely unacceptable that the law was flouted by certain individuals and companies but the fact was that companies which obeyed the rules were put at a competitive disadvantage by those unscrupulous enough to flout the law".

The Tánaiste said that "a compliant corporate sector has the potential to yield substantial returns in business efficiency, business solvency, revenue yield and social solidarity but compliance with the disciplines laid down in company law both in relation to governance and accounting is beneficial to the enterprise itself. Any enterprise which takes compliance seriously is also likely to identify and avoid problems in good time which otherwise might threaten its viability."

The Tánaiste said that "the Bill should provide the Director with the powers that he or she requires to fully enforce the provisions of the Companies Acts but that, if it became apparent that additional powers were required, she would not hesitate to provide those powers".

The new Bill will also extend and refine the requirements regarding the filing of annual returns and accounts by assigning to each company its own "annual return date". If they do not file on time, however, a severe late filing fee will be charged and the company will still be eligible for strike-off.The Company Law Enforcement Bill, 2000 also provides for the establishment of a statutory Company Law Review Group. The Review Group was established on an interim, non-statutory basis in December last under the chairmanship of Mr. Thomas B. Courtney, a practising solicitor and Head of Legal Affairs with ICS Building Society. Its function is to monitor, review and advise the Minister for Enterprise, Trade and Employment on all matters pertaining to company law in Ireland.

"Commercial probity and effective company legislation are vital to sustaining a flourishing economy and ensuring social solidarity. The combined effects of the work of the Director of Corporate Enforcement, the continual updating of company law on foot of the work of the Company Law Review Group and the enhanced annual return filing regime implemented by the Companies Registration Office will be central to achieving this objective." the Tánaiste concluded.