Section 7 concerns the power to have what are known as investigations into a company's affairs. These investigations must be agreed to by a court before they can take place and a variety of people can apply for investigations. There is no result from such investigations other than simply a report presented by the person responsible for the investigation. It may be that the contents of the report lead to prosecutions being initiated or to the winding up of a company but if the law were properly applied independently of the investigations it is possible for the company to be wound up under the normal winding up procedure and for persons to be prosecuted for offences against company law by means of the normal process of prosecution, either on the basis of a report from the liquidator on the winding up of a company or on the basis of information obtained by the Minister in another way, apart from the court ordered investigation provided for in section 7 of this Bill.
I have criticised this section because it does not demonstrate the purpose that will be served by an investigation of this kind. The fact that the investigation procedures provided in the 1963 Act have not been used is evidence that there is no need for this separate legal process. Those who might have been expected to have used the investigating procedure have invariably sought to have the company wound up and have their problems remedied in that fashion rather than by using this investigation procedure. The fact that section 7 does not provide any criteria, guidelines, or stated purposes for investigations which would indicate to the court the circumstances in which they might order such an investigation, is itself an indication that this section is there, and has been there in another form, for no particular purpose and is in fact a waste of time.
I have been trying to pursue with the Minister the reasons this process is being maintained and the only answer he gave me — admittedly it was in the form of a response to an interjection — was so that there might be prosecutions. If that is the case, there are ample sections elsewhere in this Bill which enable the Minister to get information preliminary to an investigation. If those sections are there and if the Minister has power to prosecute, why not prosecute? Why have an investigation of this kind at all? If nobody else is prepared to do it and if the Minister suspects that a company's affairs are being conducted with the intent to defraud, or if he suspects that persons connected with the formation or the management of a company have been guilty of fraud, misfeasance or other conduct, the remedy is for the Minister to petition for the winding up of the company, not for this cumbersome, lengthy and unused procedure of an investigation.
I agree with Deputy McCreevy that if there is a need for investigations they should be conducted in the same way as a normal investigation of any crime, in other words, by normal detection work, by seeking information and by searching for documents and obtaining them in the same way as the Fraud Squad investigate the activities of an individual preliminary to taking criminal proceedings, or deciding not to take criminal proceedings as the case may be.
I do not see the purpose of this process in section 7 and I am not alone in being sceptical about the value or purpose of this section. As I said, Mr. Justice Keane, the leading published authority on company law in the Republic of Ireland — he published a textbook on the subject — has said that the history of this investigation procedure does not "inspire much confidence in such proposals as providing a more effective remedy for abuses in company law".