Dáil Éireann debate -
Thursday, 22 Mar 1990

Vol. 397 No. 4

Ceisteanna—Questions Oral Answers. - Companies at Risk.

Michael Bell

Question:

7 Mr. Bell asked the Minister for Industry and Commerce if his attention has been drawn to cases of individual companies being at risk; if he has a predetermined and regular review of companies at risk under the chairmanship of his Department; if so, when meetings take place; the names of those attending such meetings; if the group reports to him; if he surveys the group's written report; the action, if any, which is then taken; and if he will make a statement on the matter.

Mr. O'Malley

The IDA and SFADCo maintain contact with companies which they have assisted and provide my Department with information on companies at risk whenever such come to notice. The State agencies work with these companies and assist them wherever possible within the terms of the industrial development legislation. Since the decision to cease the activities of Fóir Teoranta in February 1989 the interagency group, which met previously under the chairmanship of my Department, and in which Fóir Teoranta played a central role, have been wound down.

Mr. Bell

As Fóir Teoranta have been eliminated, what procedure will be adoped by the Department to deal with a company in difficulties?

Mr. O'Malley

Apart from the fact that Fóir Teoranta are no longer in existence and are not taking part in the system, it is otherwise unchanged. The real early warning to the Department or the Minister comes from the agencies concerned who usually — not always, unfortunately — alert the Department and the Minister in regard to difficulties in a company. Discussions then take place with a view to trying to assist the company or to overcome the problems.

Mr. J. Bruton

What use is a warning if nothing can be done about it? What can the Department do about this since they have abolished the only rescue agency?

Mr. O'Malley

They can do a great deal about it. The IDA are there to help companies, if necessary, to restructure or, if it is felt that is not appropriate, to help in the taking over of the company either by another company or by means of a buy-out by the management, which happens from time to time.

Mr. J. Bruton

Will the Minister agree that the criteria in the industrial development legislation specifically precludes the IDA from being involved in rescue type work?

Mr. O'Malley

It does not preclude them from what would broadly be called rescue type work but the 1986 Act precludes them from specifically involving themselves in rescue type work only in regard to a particular company. However, if it involves a take-over or a restructuring of a company the IDA are not precluded, as I understand it, by the 1986 Act from doing so provided that the financial assistance is in accordance with normal grant criteria.

Mr. J. Bruton

Will the Minister distinguish between what he describes as restructuring of a company in need of rescue — which is permissible — and rescue of a company? What is the difference?

Mr. O'Malley

It has to be in accordance with normal grant criteria under the 1986 Act and the Deputy no doubt will be familiar with its terms.

An Ceann Comhairle

A final and brief supplementary from Deputy Barrett.

Mr. S. Barrett

Is the Minister satisfied that his failure to deal with the whole question of priority status for the Revenue Commissioners in relation to insolvency is no help in having these early warning signs brought to the attention of his Department?

Mr. J. Bruton

Hear, hear.

Mr. S. Barrett

Is the Minister aware that the Revenue Commissioners now have technology at their disposal which can clearly indicate that a company is getting into difficulty very early on and that the removal of preferential status could be an incentive for them to bring this matter to his attention earlier?

Mr. O'Malley

There is nothing whatever in this question about the priority of the Revenue Commissioners.

Mr. J. Bruton

The Minister should be talking about early warning systems.