Vol. 389 No. 4
asked the Minister for Finance the reason for the Government decision to abolish Fóir Teoranta; if it is intended to establish any alternative mechanism for saving jobs, which are sustainable in the long term, but which may be threatened by short term company difficulties; and if he will make a statement on the matter.
50.
asked the Minister for Finance, in respect of the proposed closure of Fóir Teoranta (a) when the directors of the company were appraised of the Government's intentions in the matter, (b) the names of the companies owing money to Fóir Teoranta, the amounts owed and if any of these are companies in which members of the Government have, or have had, an interest, (c) the arrangements which will be made to collect the moneys referred to at (b) above, (d) the arrangements which will be made to deal with negotiations in hand with applicant companies in respect of which a final decision has not yet been taken, but which had been proceeding in good faith in accordance with existing Fóir Teoranta criteria and (e) if the powers of Fóir Teoranta, conferred by statute, have been suspended; and, if so, by what authority.
I propose to take Questions Nos. 21 and 50 together.
I would refer the Deputies to the statement I issued to this House on 25 April 1989. As I made clear in that statement, the main reasons for the Government decision to wind up the activities of Fóir Teoranta were as follows: (i) the low level of demand for Fóir Teoranta's services over the recent past; (ii) the very much changed industrial environment now as a result of the firm action taken by this Government, as compared with when Fóir Teoranta were established; (iii) the soon to be enacted provision in the latest Companies Bill allowing for the appointment by the courts of an examiner in order to prevent potentially viable companies from going into immediate liquidation; and (iv) the Government are devoting major resources to the establishment and expansion of industrial firms and to making them more cost competitive as our whole economy prepares for the internal market in 1992.
The alternative mechanism for dealing with rescue situations where long term sustainable employment is involved will thus be the new procedure in the Companies (No. 2) Bill, 1987, modelled on the US "Chapter 11" procedure. This procedure will apply to all companies, not just those in the industrial and allied sphere as in the case of Fóir Teoranta. There are, of course, other Government agencies involved in the provision of finance for industrial concerns, namely IDA, SFADCo, Údarás na Gaeltachta, NADCorp and ICC. The business expansion scheme is also of considerable assistance for the provision of equity finance for viable firms.
The available directors of the company were informed of the position on 22 February. Two of the directors who were not available on that day were informed on the following day.
As regards companies owing money to Fóir Teoranta, the position is that Fóir Teoranta took a decision in 1982 not to publish details of client firms as this might damage the credit standing of such firms. That is still Fóir Teoranta policy and it would not therefore be appropriate for me to give details in respect of these companies.
As regards the arrangements which will be made to collect moneys outstanding, as I said in my statement of 25 April, alternative arrangements for the administration within the public sector of Fóir Teoranta's existing portfolio of loans and equity holdings will be made by the end of the winding-up period so as to ensure that the Exchequer investment in the firms in question is protected.
As regards the arrangements to deal with negotiations in hand with applicant companies in respect of which application to Fóir Teoranta for assistance prior to 23 February was made but where a final decision has not yet been taken, such cases will be dealt with by the company on their merits and subject to the normal criteria which are laid out in statute.
As regards the powers of Fóir Teoranta, these have not been suspended; they will continue to be exercised by the company during the winding down period in relation to those cases where applications for assistance were received prior to 23 February 1989.
Would the Minister agree that as we approach the feared 1992 it is likely that there will be a very high level of demand once again for the services of Fóir Teoranta which were set up under similar circumstances when we joined the EC? Would the Minister also agree that Fóir Teoranta were under the impression that the examiner to be appointed under the Companies Bill would be Fóir Teoranta themselves because of their experience in assisting in management as well as financially companies in need of rescue?
The proposal in relation to the Chapter II system that was included subsequently in the Companies (No. 2) Bill came originally from Fóir Teoranta. Fóir Teoranta may have envisaged themselves as taking up that role but I, as Minister for Industry and Commerce, did not see it that way and I cannot say how my predecessor or my successor will see it. However, there is a range of agencies in existence to assist companies in need of finance, for example, the business expansion scheme, ICC, NADCorp who take equity stakes or provide preferential loans, SFADCo and Údarás na Gaeltachta. The whole industrial environment is different. As I have said many times, we will be facing a new competitive environment in 1992 when the propping up of non-viable, long-term companies will not be a reality. We have already alerted everybody in business to that. Nevertheless, there is a full range of services in existence which can look after viable, long-term companies and jobs.
Can the Minister give us an idea whom he would envisage as the examiner to be appointed under the Companies Bill or will the Minister have a say in the matter?
I would envisage that the courts would have the say in who the examiner will be. The procedure is that creditors will go to court asking for the court's protection so that no immediate liquidations can take place and it is a matter for the courts to appoint the examiner, having heard all the evidence before them.
