Dáil Éireann debate -
Tuesday, 28 Aug 1990

Vol. 401 No. 8

Companies (Amendment) Bill, 1990: Second Stage.

Minister for Industry and Commerce (Mr. O'Malley)

I move: "That the Bill be now read a Second Time."

A Cheann Comhairle, our economic fortunes are never totally within our own control. One does not have to be directly engaged in international trade to appreciate how events occurring in other parts of the world can greatly affect this country. I Indeed, even the holder of the most modest mortgage will be aware of the impact that world events can have on interest rates, and the susceptibility of exchange rates to such happenings will be familiar to anyone who travels abroad. The present events in the Middle East have sharply reminded us, if that were necessary, that despite good economic management — and the Government's record is second to none on that score — it is simply not possible to control all the forces that affect commercial life.

What the State can do, however, is to try to improve the environment that assists and encourages companies to cope with difficulties which arise, whether as a result of international developments or otherwise. It was with this in mind that measures very close to those I am introducing today were included as part of the Companies (No. 2) Bill, 1987. I should remind the House, in this connection, that the thrust and underlying rationale for the provisions concerned has already been endorsed on the floor of the House when it passed the Second Reading and by a Special Committee of the House before the summer recess in the form of Part IX of that Bill.

The decision to accelerate the passage of these particular provisions is a recognition that significant extra difficulties may be faced by Irish companies as a result of the present unrest in the Middle East, and that to wait for the passage of the main Companies Bill later this year might deprive some companies of the benefits of having this particular type of mechanism in place.

Turning to the Bill itself, the provisions involved provide what I believe will be a valuable new mechanism for the rescue and return to health of ailing, but potentially viable companies. To use a medical analogy, these provisions are intended to be of use to companies that are temporarily——

Mr. T. O'Sullivan

On a point of order, is it intended to circulate a copy of the Minister's speech to each Member? The Dáil was reconvened specially to take this Bill.

An Ceann Comhairle

That is not a matter for the Chair.

Mr. T. O'Sullivan

In the interests of fair play, each Member should get a copy of the script.

Mr. O'Malley

I understand that more copies will be available shortly.

An Ceann Comhairle

I understand more copies are about to be distributed.

Mr. O'Malley

To use a medical analogy, these provisions are intended to be of use to companies that are temporarily "sick"— I would not normally expect to see them being used by healthy companies or indeed in the final analysis by companies that are terminally ill.

The central feature of what is being proposed is the appointment to a company by the High Court of an expert, called an examiner in the Bill, and the placing of the company concerned under the protection of the court for a limited period.

Essentially, in order to qualify for protection, the company concerned must, under section 2 of the Bill, be unable to pay their debts, or be likely to be unable to pay their debts. At the same time, that section gives guidance to the court as to whether the company should get protection, in other words, it may take a view as to whether the company have a chance of survival as a going concern.

The petition for the appointment of an examiner can, under the Bill, be sought by creditors or shareholders of the company, by the company or by their directors. In the case of shareholders, section 3 provides a standard cut-off point whereby they must hold at least 10 per cent of the share capital in order to apply to the court.

While the normal run of creditors can also apply to the court, a special safeguard is inserted in the case of contingent and prospective creditors. In order to discourage precipitous or vexatious requests from such categories of creditor, section 3 (5) requires that they give security for costs to the court at the time of the application.

From the date the court becomes involved, the debts of the company will effectively be frozen since, under section 5, no enforcement action can then be taken by creditors. Neither can proceedings for a winding-up of the company be commenced nor a receiver appointed. The purpose of this stay is to preserve the status quo, to enable the company to be stabilised and to enable the process of rehabilitation to be put in place.

I should emphasise, however, that the temporary suspension of these normal remedies or procedures is only being allowed within the specific parameters set out in the Bill, under the supervision of the High Court and with the aim of achieving the restoration to health of companies in financial difficulty. Granting this breathing space is designed to allow the company's difficulties to be resolved in an orderly way and in a less threatened environment. The aim would be to achieve a result that is much more desirable than the result of any rash action to close the company.

Many companies, of course, operate within a group of companies and, accordingly, section 4 provides for the making of orders in relation to related companies.

I should perhaps mention at this stage that, in the normal run of cases, the examiner might be expected to be just that — an examiner, analyst, diagnostician or whatever. However, it must be accepted that there will be many cases where the examiner will have to take action himself, in terms of asset disposal, trading policies and so on which the existing management is either unwilling or incapable of doing.

For example, there may be an asset which is a drain on the company's resources but which in the normal course of events could not be sold because it is subject to a charge. Subject to provisions recognising the interest of the security holder, section 11 will allow the court to authorise the disposal of such an asset by the examiner.

Similarly, the assets might need to be protected if there was a danger that action might be taken in relation to those assets by the directors or management which might prejudice the interests of the company or their creditors. In such circumstances, section 9 will allow the court to order that all or any of the powers of the directors can only be exercised by the examiner.

While the main role of the examiner is, of course, not to run the company, the court may nevertheless feel that giving the examiner control of certain functions would be in the best interests of the company or their creditors.

Once the examiner is in place, he will carry out an initial assessment of the company's affairs and, if he considers from this initial assessment that the company, or part of it, can be saved, he will proceed to draw up a rescue plan.

The examiner will, of course, have a vital need for a full flow of management information, and sections 8 and 9 will give him some important powers in this respect. As well as requiring anyone with relevant information to give it to the examiner, it is essential, particularly within the tight timescale under which the examiner has to operate, that there are no delays in obtaining information.

As a start, he must be given details of the company's assets and liabilities, and information relating to creditors, within seven days of his appointment. In addition he will be able to attend all meetings of the directors, as well as general meetings of the company.

In cases where a provisional liquidator or a receiver have already been appointed to a company it is important that the court can ensure, in subsequently appointing an examiner that the actions of either the receiver or the provisional liquidator do not frustrate the rescue process, so I am therefore proposing to allow the court to make certain types of orders in relation to both.

Having conducted his initial assessment of the company the examiner will report back to the court within three weeks of his appointment, and section 16 sets out what that report must contain. While obviously containing financial information, it must also give the examiner's view as to whether the company and the whole or part of their undertaking, would be capable of survival as a going concern, what conditions are essential to ensure such survival, and whether "compromise proposals" might be more advantageous to shareholders and creditors than the winding-up of the company.

The examiner must also give his own recommendations as to what course should be taken including, if warranted, actual draft compromise proposals.

If, on the other hand, the examiner's initial assessment is that the company would not be capable of survival, then the court must hold a hearing, at which all affected shareholders are entitled to be heard. Following the hearing the court may make an order as to what should happen the company, for example whether it should remain in the protection of the court, should it be wound up, or whether some other course of action would be appropriate.

Assuming, however, that the examiner's initial response is favourable, he would, as I mentioned earlier, proceed to the next phase without a court hearing. This would obviously involve rounds of discussions with classes of creditors and shareholders, meetings of various kinds and so on, in an effort to work out an acceptable rescue package or, in the terms of the Bill, compromise proposals.

These proposals must contain certain specific information and must meet certain criteria. They must, for example, provide equal treatment for each claim or interest of a particular class of creditors or shareholders. They must also show how the different classes would be affected, and provide for mechanisms as to how the overall plan is to be implemented. One particularly useful piece of information to be included is an effective comparison between the effect of the proposals as against the probable financial outcome of a winding up for the various parties involved.

I do not think any of us could underestimate the difficulty of doing this, and it will really take a major effort, even in the smallest of companies, to make the whole thing work. However, assuming there is sufficient agreement to his proposals the examiner can then seek to have them confirmed by the court. For its part, the court must be satisfied that the proposals meet certain tests — for example that they are fair and equitable to any class of members or creditors that has not accepted them and whose claims or interests would be impaired.

If the court confirms the plan, it will be binding on everyone concerned, the examiner's appointment will be at an end, and the company will cease to be under the protection of the court.

The Bill recognises the value of consultation with the creditors of the company and allows the court to direct that a committee of creditors be appointed to assist the examiner. I would like here to point out that the need to keep all interested parties informed is catered for throughout the Bill. For example, notification of the presentation of a petition in the first place must be delivered to the registrar of companies straightaway; when the examiner is appointed notifications must be published; the examiner must give the committee of creditors, if there is one, a copy of the proposals, and there are provisions for consultations with members and creditors on the proposals.

The system will operate within a fairly tight timescale. I strongly believe that this is the only way of ensuring that the mechanism can be successful and used to the full. In fact, one of the main criticisms of similar systems operating elsewhere, for example the "Chapter 11" system in the United States, is that they can be too long-drawn-out and, therefore, obviously too costly.

It is important that all those affected by the use of the provisions of this Bill should be reassured by the certainty that the system being introduced is to operate within a tightly-defined timescale. Thus, the court protection period is restricted to three months, with an additional 30 days if needed to facilitate the examiner in the preparation of his final report. There are also tight time limits within which the examiner must furnish his reports — the one giving his initial assessment within three weeks of his appointment, and the second one containing his actual proposals within a further three weeks. Again, I know these limits are very tight, but there are so many interests to be balanced in this whole process that, quite literally, time is of the essence.

While it is not the practice to discuss in this House the financial affairs of individual companies, I think it would be unrealistic of me in the present circumstances not to refer to the affairs of Goodman International, about whose position there has been substantial speculation and comment. I have been authorised by IBI Corporate Finance Limited, on behalf of Goodman International and Goodman Holdings, to disclose the following information in relation to Goodman International and other relevant companies. This information, which was provided to me by IBI Corporate Finance Limited from whose letter to me, dated 27 August, I am quoting, is as follows:

As at 17th August, 1990, Goodman International and its subsidiaries (other than Food Industries plc) owed banks approximately IR£460 million which had been available on an unsecured short term basis. In addition, banks had guaranteed obligations in respect of the performance of Goodman International and its subsidiaries (other than Food Industries plc) under beef supply contracts in an amount of approximately IR£200 million.

Goodman International and its subsidiaries (other than Food Industries plc) are owed IR£180 million by Iraqi entities, this figure includes £11 million of interest due.

Goodman International and its subsidiaries (other than Food Industries plc) are owed IR£203 million by other companies owned by Goodman Holdings of which it is estimated that not more than IR£90 million will be recovered.

Shareholders' funds of Goodman International as shown by the consolidated accounts to 31st December, 1989 were IR£191 million and the net worth of Goodman Holdings as at that date was IR£273 million. These did not take into account any major provisions in relation to the Iraqi debt or amounts owing by other subsidiaries of Goodman Holdings which now stand at the amount stated above.

The trading operations of Goodman International continue to be substantially profitable before interest which mainly arises from the failure to receive payment for beef shipments to Iraq and the inability of other subsidiaries of Goodman Holdings to repay the debt outstanding.

Food Industries plc is a separate listed company with its own independent board of directors and management. It continues to trade profitably and arranges its own finance independently. It has virtually no trading links with Goodman International. There is no inter-dependence of borrowings between Food Industries plc and other subsidiaries of Goodman Holdings and/or Goodman International. The links between Food Industries plc and Goodman International are the ownership of 68 per cent and some common directors.

I repeat that this information was provided to me by IBI Corporate Finance Limited.

At this stage I should like to comment on the beef industry, its achievements and present problems. The pre-eminent position of the cattle and beef industry in the Irish economy is best illustrated by the fact that it contributes some 10 per cent to gross domestic product. Output of cattle and calves for 1989 was valued at £1,211 million or 36 per cent of gross agricultural output, while cattle and beef exports amounted to £760 million and represented 32 per cent of total agricultural exports and 5.2 per cent of total exports. If export refunds are included, export earnings from the beef sector increase to £1,010 million and their contribution to agricultural exports and total exports increases to 43 per cent and 7 per cent, respectively.

Output in the cattle and beef sector is of crucial importance to the beef industry. The output of cattle and calves depends primarily on the size of the national breeding herd. Over the ten years 1976 to 1986, total cow numbers remained unchanged at around two million head but in 1987 and 1988 the numbers dropped by 3 per cent largely as a consequence of the earlier imposition of the milk quota régime. Numbers have now increased again. This increase is accounted for almost exclusively by an increase in the beef breeding herd. This is a welcome sign that there will be an improvement in the quality of our beef cattle with the move to more specialist beef breeds.

The beef sector has achieved very significant progress over the past 20 years in terms of moving away from live exports and increasing value added exports. This situation is evident from the fact that our live cattle exports represented 46 per cent of the total destined for export in 1969 and less than 11 per cent by 1989. Indeed, the level of live exports to destinations outside of the island of Ireland in 1989 was down to less than 3 per cent.

Over the same 20 year period the industry progressed from producing cattle for export and subsequent slaughter in other countries to one which now exports 75 per cent of our cattle output as beef to destinations throughout the world. It has progressed from then exporting 87 per cent of our beef in the bone-in state and only 13 per cent boneless to now exporting 58 per cent boneless and 42 per cent bone-in.

It must also be acknowledged that an increasingly significant, if yet small, proportion of this takes the form of high quality chilled boneless cuts. A major beneficial consequence of this progress to the Irish economy is that some 5,000 people are now employed directly in the meat processing industry. In addition there are some 100,000 farmers involved in the production of cattle, the raw material of the industry. The industry is also of major benefit to the services sector particularly in the area of transport.

There is no doubt that our membership of the EC and the access to the various support schemes have contributed more to the increased production of the beef industry over the last 20 years than has our access to the large EC market of consumers. We have manifestly failed to penetrate this sophisticated and increasingly valuable continental EC market to any significant degree, a market where we sell only 40 per cent of steer production. As a consequence we have relied on volatile Middle Eastern markets as outlets for much of our beef exports.

Approximately 1.5 million head of cattle are slaughtered in Ireland each year. Disposal of the beef from these slaughterings, in cattle equivalent is approximately as follows: 200,000 head — mainly heifers — for the home market; 500,000 head — mainly steers — for export to third countries; 360,000 head — steers, cows and heifers — to the United Kingdom; 210,000 head — steers — for intervention and 150,000 head — steers, cows and heifers — for the European mainland. In addition, some 150,000 cattle are exported live to North African countries and the United Kingdom.

As our cattle production is grass-based a high proportion of slaughterings and thus of purchases of slaughter cattle from farmers, takes place from September on. In 1989, the final quarter accounted for 47 per cent of cattle slaughterings. For the second six months of 1990 about 950,000 head of cattle will be ready to offer to our factories for slaughter, some 800,000 head in the September-December period. Most of the beef produced — about 265,000 tonnes in bone-in terms — will have to be exported to the United Kingdom, the East or our minor third country markets in the Caribbean, Mexico, Yugoslavia, Japan and West Africa.

Serious problems have arisen recently in our principal markets abroad. For example, we stand to lose a major outlet for our beef due to the embargo on trade with Iraq. This embargo prevents all exports of beef to a destination which took 51,000 tonnes of Irish beef in 1989 and which could reasonably have been expected, in the absence of the embargo, to take between 30,000 and 40,000 tonnes in the remainder of this year, an export quantity which we now stand to lose; there is a widespread threat to our third country exports in general due to the BSE scare. Iran and Egypt are of most serious concern. Iran, which is the most important of the third countries with which we have BSE problems, took 61,000 tonnes of Irish beef in 1989; the demand for beef in the UK and the Continent is down by at least 10 per cent and there is little prospect of a significant improvement in the short term; and the outlets for our live cattle have also been affected, particularly in Libya, by concern about BSE. Our competitors are in a position to provide sizeable alternative beef supplies to our third country customers.

Overall, if the present situation continues unchanged, the prospect is that over the September-December period the only realistic outlet for quite a proportion of our beef will be the intervention system. Under existing arrangements for intervention the safety-net mechanism which gives guaranteed access to intervention for certain categories of steers is operating and we anticipate that this will continue for the rest of the year.

However, this will not take all of the steers, and heifers and cows do not qualify for intervention under existing EC rules. While this safety-net is of real assistance to our industry it is an expensive system for the Community. There may be some difficulties when the system comes up for review again at the end of 1990.

Coming back to the provisions of the Bill we are addressing today, I said earlier that the substance of the measures proposed had already been welcomed by a special committee of this House. In fact, it was dealt with in some considerable detail by that committee. I would like to take this opportunity to record my gratitude and admiration to the Chairman and members of the committee for the constructive and efficient manner in which they conducted their business.

The possibility of difficulties arising for companies generally because of the Middle East crisis has accentuated the desirability of having these provisions put in place as soon as possible. As legislators, we are sometimes criticised for the length of time it takes to introduce new laws. In recalling both Houses of the Oireachtas we are showing that we can respond, when necessary, to rapidly changing circumstances.

I am confident that this legislation can work. I see it as an encouragement to firms experiencing difficulties to tackle, in a new way, their problems at an early stage and initiate action that can ensure their continued existence.

I look forward to a constructive debate and to the enactment of this valuable piece of legislation.

Mr. S. Barrett

The truth of the matter is that the Government are asking this House to pass legislation today to prevent the collapse of the Goodman Group. Let us not mess about in any way; this is what this is all about.

I listened with interest to the Minister for Finance on the radio this morning — on "Morning Ireland"— when he attempted to convince our people that this would have happened anyway, that we might well have been back in this House as early as today. He did not manage to persuade too many of us that that was actually the case.

Before the announcement of this bombshell the prospects for our agricultural industry were bad enough but this collapse could be the final straw. The reality is that there are thousands of families and many jobs at risk, including the possible collapse of small businesses, if this closure were to take place. We on this side of the House are not in the business of supporting measures to see an end to a very valuable industry here.

While all of this is happening members of the Government remain silent on the circumstances which brought this sad event about. Indeed, the failure of the Taoiseach and his Ministers, particularly those involved in 1987, to disclose publicly the circumstances which led to the reintroduction of export credit insurance for Iraq in 1987 forces me now to call for a full inquiry into the events that took place at that time. The decision of the Minister for Finance, Deputy Reynolds, who was then Minister for Industry and Commerce — and his colleagues in Government — to restore export credit insurance cover clearly signalled support by the Government at the time to develop an extension of trade with Iraq.

I should like to refer Deputies to various Dáil debates where there is clear evidence to support what I said. The Minister, Deputy Reynolds when introducing the Insurance (Export Guarantees) Bill in 1988, as Minister for Industry and Commerce said:

As a result of successful growth in business contacts in Iraq and in the context of the Irish-Iraqi Joint Commission, it was decided to provide export credit facilities to Iraq. This is a positive development in terms of sustaining growth in the long term.

The Minister, Deputy Burke, answering questions on 3 May 1989 as Minister for Industry and Commerce said:

For my part I should like to confirm the Government's confidence in the wellbeing of our economic relations with Iraq.

This action was taken and these things were said at a time when most other European countries, in so far as one can judge, had decided not to grant export credit cover because the risks were too high. It should not be forgotten that one year earlier, in 1986, the previous Government made a decision not to continue to underwrite any further losses for Iraq because of the high risks involved. There is an obligation on the Taoiseach and his Ministers, especially those who were in office from 1987 to 1989, to explain why the decision was taken to restore cover for Iraq, exposing this country to potential liabilities well in excess of £100 million. We should be told why in particular they encouraged expansion of the beef industry to Iraq despite the huge risks involved.

Certain aspects of this whole affair need to be clarified. We should be given details of the discussions which took place in 1987 between the Government and the Goodman Group in relation to contracts for the supply of meat to Iraq. We should be told if discussions took place between the Taoiseach and-or members of the Government, representatives of the Government group and Mr. Goodman, regarding the provision of export credit insurance to cover contracts secured for the supply of meat to Iraq.

Were members of the Government aware that, to fill the contract, some meat would have to come from a source outside this country? Was Mr. Goodman aware that the insurance policies only covered meat in this country and that his company would be exposed to liabilities in respect of meat outside this country? Were any claims made in respect of any of these policies? If so, did the Goodman Group try to recover losses in respect of meat outside this country? Were there any indications that they were about to make such claims before the cover was cancalled by the Government in October 1989?

The sad result of this whole debacle is that the Goodman Group are now owed nearly £170 million by Iraq and our economy faces enormous difficulties as a result. The Taoiseach must explain why he and his Ministers actively encouraged these developments and then decided to cancel the cover in October 1989 leaving a trail of destruction. In most other civilised countries those responsible for such decisions would resign. When answering these questions the Taoiseach might also explain what happened to the famous Goodman-IDA expansion programme——

Mr. Durkan

A good question.

Mr. S. Barrett

——announced in the Hollywood style launching over which he presided.

Mr. J. O'Keeffe

It was a mirage in the desert.

Mr. S. Barrett

It is quite obvious that enormous political pressure from the highest possible level was brought to bear on the Goodman Group and the IDA to announce an expansion programme, the details of which had not been worked out, and which was launched in such a dramatic fashion solely as a PR exercise for the Taoiseach and his Government at the time.

Deputies

Hear, hear.

Mr. S. Barrett

In view of the dramatic circumstances surrounding the recall of the Dáil and the situation which faces the country, the minimum the House deserves, before passing this legislation, are answers to the important questions I posed.

Our beef industry is a vital part of our economy and Fine Gael do not support measures proposed by Deputy Stagg to bring about its liquidation. I hope that my colleagues in other Opposition parties will support my reasonable requests and that we will not spend our time indulging in hearsay titbits.

As I said at the outset, we would not be here today if there had not been a crisis in the livestock industry. Fine Gael are deeply concerned about the catastrophic effects which the collapse of the livestock industry would have on employment and the economy. We want the Government to take steps to ensure maintenance of a viable livestock industry but the record of the Government to date in this area is nothing short of appalling. How did they allow the present situation to arise? Surely they were aware of the problems long before now, especially after the cancellation of the insurance cover? It is the responsibility of the Minister to clearly outline how the proposals contained in the Bill before us will achieve a satisfactory conclusion to the problem now facing the beef industry. We do not want to hear in a few weeks or a few months that the proposals did not work, that hundreds of millions of pounds have been lost in exports and that the industry has been wiped out.

We will have many questions on Committee and Report Stages and we will be pressing amendments which are necessary to strengthen the provisions of the Bill. As the Minister rightly said, the Bill now before us was originally Part IX of the Companies (No. 2) Bill, 1987, which went through Committee Stage before the summer recess. During the course of debate on Committee Stage we recognised that the provisions of the Bill were a genuine attempt to provide a new legal mechanism for the rescue, reconstruction or aiding potentially viable companies. Fine Gael will be pleased to support workable proposals which would help businesses and jobs. However, it is unfortunate that we are forced to discuss these proposals in the prevailing atmosphere because it should be remembered that it will be a long time before the Dáil will again have the opportunity to discuss ways and means of saving companies capable of being saved and not waiting until the day of liquidation.

The history of the introduction of Companies Bills in this House leaves a lot to be desired and the fact that the present Bill is nearly four years before the House speaks for itself.

Yesterday we tabled ten amendments to the Companies Bill already before the Dáil. Deputy Bruton and I intend resubmitting these amendments to the new Bill as soon as Second Stage is concluded. These amendments are designed to improve the general effectiveness of the rescue proposals and are not related to the problems now facing the beef industry. The Bill in its present form could cause major problems for the examiner in the performance of his duties. There is no provision whereby the examiner can be given immediate powers to take over the running of the company from the date of his initial appointment without necessarily waiting for his first report to the court after 21 days. This could lead to conflict between management and the examiner from day one. I should like to give notice that we will table an amendment on Committee Stage to resolve this problem. The persons petitioning for court protection will usually be the directors of the company in difficulty. Yet it is these directors who will have the responsibility of nominating who will examine their company's affairs. We believe there is a potential conflict of interest here and to deal with this we propose to table an amendment which will give the Minister the power to lay down strict rules as to who may be appointed as an examiner. These could cover any past or future relationships with the company and also necessary professional qualifications.

The rescue provisions in their present form are liable to lead to lengthy and time-consuming court proceedings. Fine Gael propose to table amendments to improve the efficiency of these provisions. We would like to see a specialised court dealing with commercial matters. It should be possible to see to it that the same judge will deal with a case from beginning to end. As the Bill stands at present there is no guarantee that the same judge will be involved when the examiner reports back. This could lead to absolute chaos in the courts and long delays. One must, with respect to the Judiciary, question whether there are within our court structure sufficient judges who have a deep knowledge of company law and who will be able to make what are basically commercial decisions in the courts. The question we must ask ourselves is: will a case be heard one day before judge X and another day before judge Y, who will have to brief himself of the circumstances of the case? This could lead to the postponement of decisions and perhaps the ultimate collapse of the company we are trying to save.

We also intend to table an amendment which will give the examiner the power to waive some of the protections enjoyed by a company if he believes this might contribute to a speedier solution to the company's problems. We will also table an amendment which is designed to encourage the examiner to make use of creditors committees with a view to maximising consensus and minimising conflict in the courts. There has been much discussion over the past number of days, particularly in the media, about the advantages of this legislation, and it has been compared with Chapter 11 in the United States. Without sounding negative, I am sure that, like me, most Members of the House want every possible effort to be made by whatever Government are in power to introduce measures to try to save businesses at an early stage rather than allow them to get into such difficulties that they have to be liquidated. None of us want that to happen and it is not in our interests to come in here and oppose for the sake of opposing if there are measures which can be implemented whereby companies can be saved.

The reality is that the measures being proposed are good-intentioned — if that is the correct expression — but this examiner will have to face practical difficulties on a day-to-day basis. For example, the examiner will not have complete control of the company; the same management and board of directors will stay in place. As everyone knows, one must have a boss and somebody must ultimately make the decisions. Catastrophic problems will arise if the examiner wants to do one thing and the management disagree with him. If this Bill is to succeed consensus will be necessary. This Bill is trying to get consensus by using the sledgehammer approach because it is the courts who will make the decisions and a majority of a class of creditors will be able to make a decision which will ultimately affect another class of creditors. Therefore, there is bound to be conflict.

The difference between this measure and the measure introduced by the 1983-87 Coalition Government in relation to the PMPA was that the PMPA had what is known as an administrator who had absolute power over the running of the company's affairs and had funds available to him. I have spoken to many professionals who deal with receiverships and liquidations, and I think most of them want to be positive about this legislation. However, I understand they have approached the Department on numerous occasions to try to get changes in this legislation so that it will be somewhat more effective than they think it will be. The difference between an examiner and a receiver is that a receiver will have the support of the banks and the first thing he will be able to do when he goes into the company is to guarantee that next week's wages will be paid.

Mr. Rabbitte

That is not the case with some of the receivers I have dealt with.

Mr. S. Barrett

The first meeting someone who is trying to save a company will have will be with the employee's representatives, be they trade unions or others, and he will be asked if he has the money to pay next week's wages. If a company is in difficulties and there is a possibility that the banks are about to move in, the examiner or whoever is in charge of the company will want to have some guarantees about cash flow. I do not want this measure to fail at the first hurdle just because we have not thought it through to a proper conclusion. If this measure is to be used in relation to the Goodman Group it is important that it succeeds on day one because if it fails in relation to this group the business community will not have any confidence in it. Confidence means everything in this sort of situation. This measure should be about giving people confidence that if they use this mechanism they can save their companies. We want to encourage the directors and members of companies to look at this legislation and use it if they believe their companies can be saved, and stand aside and allow sensible decisions to be taken immediately.

The Bill proposes that the examiner will examine the circumstances of the company, their books, assets and so on and will report back to the court after 21 days. In the case of an ailing company 21 days is a hell of a long time and much can happen during that time. In fact, anyone who has any dealings with business knows that one day is a long time, particularly when you are facing problems. We have to be absolutely certain that there is a provision in this Bill whereby the court, if it thinks it is in the interests of the company, will have the power to give control in management terms to the examiner from day one. If this is not in the interests of the company or there is a different set of circumstances then the court can decide to use the normal measures proposed in the Bill. However, there must be a provision whereby the court can have that option for the sake of the success of this legislation. I want this legislation to succeed and not to fail.

I want to again lay down a marker to the Taoiseach, his Ministers and the Government: if this measure is used in the case of the Goodman Group and it does not succeed it will be dead. I listened to the Minister for Finance, Deputy Albert Reynolds, on the radio this morning when he compared this legislation to Chapter 11. He said that it had been used successfully by Texaco International on a number of occasions. As the Minister knows, there are very few Texaco Internationals in this country and what that company and ABC Limited, who employ 20 people, will do will be entirely different. Texaco International can afford the expense which will be involved in this legislation.

Nobody here is under any illusion. It costs a hell of a lot of money to keep traipsing down to the High Court on a regular basis looking for directions from a judge and if an examiner sees that legal expenses, court hearings and his expenses will cost £90,000 or £100,000 and that as a result of these actions the assets of the company will be reduced and there will be nothing left, then my guess is that after the 21 days he will propose winding up the company.

That is what I mean about having the power to make immediate decisions. Let us be honest about it, there are very few Goodman Groups in Ireland. Most of our companies are small, employing 20, 30, 40 or 50 people. They do not have money to spend on legal costs to the tune of £90,000 or £100,000 and there will be a responsibility on the examiner to see to it that any action he takes will not jeopardise the future of the company or that he will be forced to recommend to the court that the company be wound up.

As I said, we want to try to establish consensus, not conflict, in this legislation. Perhaps the Minister will, on Committee Stage, answer questions in relation to this area and accept amendments to strengthen the Bill. He knows we are making these points in a constructive fashion to get the best legislation possible so that we can save businesses and jobs.

We are not here today solely to delight in the difficulties facing the beef industry. I am too well aware of the thousands of people throughout the length and breadth of the country who are concerned about the future of the agricultural industry — those who are employed in factories, their families, those running small businesses and shops in the towns. All these people are depending on a proper resolution of this problem. I sincerely hope the Government have thought this out because they will have to answer these points. If we come back here in one or two months' time and the beef industry has been wiped out, the Government of the day will be the people who are responsible.

I tell any of them who has time to go down to the Library to read the Official Report on the PMPA and the ICI affairs. It is amusing to read what was said by the same gentlemen who now occupy the Government benches about the way the Government were handling these affairs and what the disadvantages would be to the ordinary member of the public. All I can say to those same Members is that as far as we are concerned the PMPA is back in business. It was sold off as a viable company and people can get motor insurance. A similar situation arose in relation to the ICI and the banks did not go to the wall. The gentlemen who made those remarks in 1985, or whenever it was, should think again about whether the decision they are taking today is the correct one. We should pay tribute in this House to the late Deputy Frank Cluskey for his bravery in attempting to save the PMPA and the Irish people from absolute chaos on our roads.

Deputies

Hear, hear.

Mr. S. Barrett

Let us remember that a similar situation arises today. They have responsibility for the thousands of families, the small businesses, depending on this industry, and these measures had better work. I will certainly go along with reasonable proposals that will see to it that this industry, as distinct from any vested interest — let that go on the record here — will be saved. That is the important thing as far as Fine Gael are concerned.

We would also like to see the Minister with power to petition for court protection for a particular company. In view of the public interest issues involved in larger companies in particular, we believe the Minister should have this power and we will be tabling an amendment to provide for this. As I said, under the legislation a limited number of people can petition for the appointment of an examiner, but in the public interest there may be circumstances where it would be wise for the Minister to have power, if he feels it is necessary, to go to court to petition for the appointment of an examiner.

In closing, I would like to ask the Minister to explain one little thing which I think is of vital importance: does he see the examiner having access to funds to keep a company ticking over particularly in the early days of the appointment? Let us not pull any punches here. The reality in relation to the Goodman Group is that thousands of employees are going to ask a simple question in a couple of weeks, or this week — or maybe they are asking it at the moment — that is if their wages will be paid next week. You cannot have consensus and you cannot save companies without having the co-operation of those working in those companies. If the employees decide to withdraw their labour or if the farmer decides not to supply goods, then no measures will succeed.

The one question that has to be answered is where the money is going to come from. You cannot save companies or jobs without access to funds. You will not get people to continue to supply you or to work for you unless you are prepared to pay their wages. I would like the Minister before replying on Second Stage, to think about this. I do not intend to be negative here, but advice given to me would suggest that if certain things are done in the course of this legislation they could affect the confidence of Irish business in their dealings with financial institutions.

The financial institutions, whether you like them or not, are in the business of lending money and they must be satisfied that there are measures here that (a) will protect their interests — let us be frank and honest about it — and (b) the proposals are workable. If they see that Irish business can find an easy way of relieving themselves of genuine debts, then in the future, Irish companies — again I am talking about small companies — could find it difficult to get finance to set up and keep running. He could find that financial institutions would be looking at higher interest rates for Irish business compared to other countries. I ask the Minister to state in his reply if he is satisfied that all steps and all necessary measures have been taken to ensure that confidence in Irish companies will remain and that Irish companies will not be disadvantaged as a result of any measures here.

There are many other things I could say about this legislation and that should be said about the sad circumstances leading up to the situation which brings us here today. I say to the Taoiseach, looking him straight in the face, that he has a responsibility to answer questions that are being posed every day about what went on and why cover was given at a time when everybody else had pulled out of the market. There is no point saying the matter is sub judice and that we cannot get answers.

We are being asked to pass this legislation. I do not want to see anybody go out of business. I do not believe in personal vendettas against successful business people. Some people make profits and some make losses; you take the good with the bad, but we encouraged people to do business with a country everybody else was afraid of and in doing so exposed the taxpayer to possible liabilities and the taxpayer is still so exposed. Remember, there is a court case pending which, I understand, is due to be heard in October and could cost the taxpayer enormous sums of money if the decision of the Minister for Industry and Commerce to cancel export credit insurance cover is found to be improper. As I said, there is a possibility that the taxpayer will be exposed to vast liabilities in this case.

The Minister for Finance, who was Minister for Industry and Commerce, knows all the circumstances. I know some of them but I hear bits here and there and I do not like hearsay, I like to hear the facts and I would like the facts to be exposed so that nobody will be able to make claims that are not valid and people will be forced to tell the truth.

Mr. Spring

As I indicated yesterday, it has been necessary under Article 24 of the Constitution for the Taoiseach to send a written message to the President, the Ceann Comhairle and the Cathaoirleach of the Seanad certifying that "the Bill is urgent and immediately necessary for the preservation of public peace and security, or by reason of the existence of a public emergency, whether domestic or international".

Having regard to the attempts by the Taoiseach and the Minister for Industry and Commerce over the weekend to describe this legislation as essentially routine and non-controversial, the Dáil must be wondering when it will be told the exact nature of this emergency which necessitates the curtailment of the constitutional right of both Houses and of the President to examine the legislation in detail. I should like the Taoiseach to confirm that he is satisfied that all the requirements of Article 24 have been complied with and that it is not necessary, as is stated in the Article, for the President to consult the Council of State before requesting an abridged meeting of the Seanad tomorrow.

It is now clear that the circumstances surrounding the Bill make it impossible for it to be considered routine. As things stand, it looks very much like a measure aimed simply and solely at protecting rich people from their bankers. The Labour Party will seek to amend the Bill in a number of ways and make it more relevant to the protection of the public good, to the interests of farmers, now and in the future, and to the interests of workers in the industry or in any other enterprise affected by this legislation in the future. I will list what we are seeking by way of amendment. We will be seeking to have all reports prepared by examiners made public unless, in the opinion of the courts, it is clearly contrary to the public good in particular cases. The Bill, as drafted, provides only for the publication of orders made by the court. We will be seeking to ensure that no examiner has the right to issue redundancy notices to workers and that the problems generated by mismanagement are dealt with. We will be seeking to change the jurisdiction to the Circuit Court so that small as well as large employers can seek legal protection. It is clear from the Bill as presently drafted that only companies with large turnovers will be able to afford the fees involved.

We will seek to make it an offence for any person to interfere with examiners in their work or to destroy any documentation. We will demand to know what steps have been taken by responsible authorities to ensure that shredders were not working overtime last weekend. We will seek to ensure that no person associated with the enterprise in a professional capacity can be appointed as an examiner. These amendments will make the Bill more clearly an instrument aimed at protecting enterprise rather than simply giving rich men time to buy themselves out of trouble. Even if it means extending the time necessary for consideration of the Bill, we believe they are vital in the light of what we now know.

It has been argued that this is relatively non-contentious legislation already approved in principle by the House, but the circumstances in which it reaches us today make it essential for us to look at it again and to consider in depth some of the issues of principle involved. Today's debate confronts us with some of the most serious issues that most of us, as politicians elected in a democracy, have ever had to face. The relatively innocuous legislation that we are asked to deal with is, in a way, a smokescreen. Hidden behind that smokescreen are some of the most serious questions we could possibly ask. Perhaps the most fundamental one is this: how much has our concept of democracy already been undermined by the exercise of secret power, by the pulling of strings in book-lined offices and in gracious drawing-rooms, and by the willingness of a democratically elected Government to acquiesce in the greed and ambition of individuals?

The Irish beef industry, one of the cornerstones of Irish agriculture and the largest exporting industry in the country, has been brought to the brink of destruction by adventurism, greed and the determination of one man to concentrate material and political power in his own hands, and by the venality of politicians. The story of the near destruction of this vital industry is one that the Government ought to be thoroughly ashamed of. Unlike Deputy De Rossa, who was interviewed on radio yesterday morning, I find it impossible to generate any respect for the way in which the Goodman business was built up, nor do I believe that Mr. Goodman should be saved with taxpayers' money. Our job now is to ensure that the beef industry, not Goodman, is rescued from the situation in which it finds itself and is restored to the basis it needs if it is to continue to develop and contribute to the overall economy. We must do a great deal more as well. The international commercial standing of Ireland has been very badly hit in the last few weeks. Exporters, manufacturers looking for overseas markets for their products and public servants seeking to attract investment here will find that their efforts have been seriously undermined by what has happened in recent weeks. It will be a long time before we are able to hold our own against other investment locations or with other small exporting economies.

The reason is simple. We have been exposed, in the eyes of the international financial community, as an economy willing to tolerate cowboys. More than that, if we spot a cowboy the Government immediately supply him with a six shooter and a Stetson hat. There is only one way for us to undo this damage. We must demonstrate to the world, and especially to our cowboys, that we are not willing to allow them to ride roughshod over the entire regulatory apparatus established to ensure honesty in business.

From what we have heard so far in this debate, and in the last few days, there is very little reason to be confident that we will emerge from this debacle with our image strengthened and the damage that has been done to our international reputation minimised. This is a time for telling the truth but I do not believe we have been told the whole story so far. The Minister for Industry and Commerce has insulted our intelligence by implying that this is a routine matter of company law. Ever since this matter came to public attention there has been a tissue of distortions and misinformation. For example, when the Taoiseach announced the recalling of the Dáil he refused point blank to admit that it was because of a crisis facing Mr. Larry Goodman even though the dogs in the street knew that was the only reason. He went on to deny specifically and categorically that he or the Government had received any representations from Mr. Goodman, but what are we to make of newspaper reports, which have not so far been denied, that Mr. Goodman landed his helicopter in the grounds of Kinsealy for a cosy lunch with the Taoiseach only last Thursday?

We have been told again and again that it is the Gulf war which started a couple of weeks ago, that is responsible for Mr. Goodman's troubles. That is a myth that must be dispelled. There is a serious exposure to Iraq as confirmed by the Minister — as much as £180 million, but that exposure has been there since at least September 1989 and was shown on Goodman's balance sheet at that time. It has not got any worse since then. What has happened is that the personal commitments Goodman offered his bankers to cover that exposure have been spent in foolish and greedy investments in the United Kingdom which have gone disastrously wrong. The truth is much worse——

Mr. F. Fahey

Tell us what it is.

Mr. Spring

——than anything that has been reported in the newspapers so far. I have in my possession a complete breakdown of the banks to whom Mr. Goodman owes money and the amount of money involved in each case. It makes extraordinary reading and amounts to a catalogue of commercial adventurism that is surely unacceptable by any business standards. It is the unacceptable face of Irish capitalism, to coin a phrase. What those figures tell us above all is that we would be fooling ourselves if we were to maintain that the Goodman enterprise is facing a little short-term difficulty brought on by the Gulf crisis. The Goodman enterprise is finished and the task facing us is to put a new, better and more honest entity in its place. Mr. Goodman owes a grand total of just under £700 million in cash and guarantees. Altogether well in excess of 30 banks have been taken for a ride, American, German, Dutch, Swiss, Japanese and French banks as well as Irish. The total can be broken down into about £500 million cash and approximately £200 million in guarantees. In so far as the cash state is concerned, nearly £60 million is owed to Irish banks, almost £80 million to foreign banks with Irish subsidiaries and more than £330 million to banks overseas. That indebtedness is twice what it was only one year ago.

This money is owed by a company who claim unlimited liability. The purpose of this claim is to shield the company from the normal requirements of disclosure of information. It also conveys that the debts of the company will also be borne by their shareholders. In this instance, however, contrary to what is generally believed, I understand that the principal shareholders of Goodman International are a company registered in the Channel Islands and known as Kitlar, a limited liability company. So, in effect, the concept of unlimited liability has been entirely circumvented in this case. The creditors of Goodman International can only look to Kitlar after taking whatever fixed assets Goodman International hold.

On page 11 of the Minister's speech he quoted from a briefing note supplied to him which points out that effectively subsidiaries of Goodman International are owed over £100 million by other Goodman companies which will never be recovered. It is an extraordinary statement for the Minister for Industry and Commerce to read into the record of this House without any comment whatever; but even that is only part of this horrible saga. The real truth is that the vast bulk of the money owed is already, and to all intents and purposes, a bad debt. The banks involved will lose millions and, in the case of some of the smaller ones, may be irretrievably damaged. The assets which have been offered cover only a fraction of the total.

One of the more intriguing pieces of information to be disclosed and to come to my notice includes the fact that among those assets is Classic Meats which, as we all know, Mr. Goodman has always strenuously denied, both to Government and to Opposition, he has any interest in. Without blinking an eyelid, at his meeting with his bankers in London last week, Mr. Goodman informed them that of course he owns Classic Meats and will include it in his assets.

Mr. Rabbitte

Mystery meats.

Mr. Spring

Many of the United Kingdom assets are already mortgaged to secure still further debts. The story of Mr. Goodman's downfall is, in fact, a simple one.

A Deputy

Where is he today?

Mr. Spring

That is a good question. He has been lent very large sums of money to cover the working capital requirements of a substantial company, Goodman International. Despite giving assurances that that was the purpose for which the money was being borrowed, he used it instead to finance his empire building in the United Kingdom and elsewhere. There is no doubt that, in the process, deceit and misrepresentation were used. In the end, the banks whose loans are unsecured are those which thought they were lending for the routine purposes of Goodman International.

It could be argued, and it is an argument for which I would have a certain sympathy that we should not shed any tears for the "who's who" of the banking community that has been so badly stung. It may well be the case that they are the victims of their own mismanagement, and that we should not shed any tears for them.

Whatever feeling one might have about these banks, the truth is this: our standing in the world as a country, our ability to compete, our prospects for trade, will all be fatally undermined if the international banking community come to the view that Irish business is not worth doing business with. That is the view of these bankers now and there are good reasons for that view, which I will return to in a moment.

First I must ask this question: how did all this come to pass? How are we involved in this mess? Are we really to be expected to believe that debts of this magnitude are the result of honest but misguided trading in the Middle East? Are we really to be asked to believe that this is a temporary setback for an otherwise sound enterprise?

Again, it is time to speak the truth. This leading Irish capitalist and entrepreneur has spent the last couple of years pursuing personal ambitions. He did not want to control the Irish beef industry, he wanted to own it and more, the dairy industry, the sugar industry, not only here, but in the United Kingdom. His ambitions have been without limit for the past several years, and there has been no one to set a limit to them. The only people who have stood in his way have been a handful of public representatives, some media representatives, and a significant number of individuals in the farming and agri-business sectors, all of whom had their own reasons for opposing his monopolistic tendencies. The public representatives who tried to warn about unlimited ambition, and to expose irregularities and wrongdoing were vilified, accused of national sabotage by the Taoiseach and of being "anti-bloody well everything" by Mr. Goodman himself. There were few enough who recognised then that those public representatives were speaking up in defence of the farming community whose futures were being mortgaged by Mr. Goodman's greed and ambitions.

Any journalist who tried to expose what was going on was threatened with huge libel actions and effectively gagged. We can all remember grovelling apologies being read on RTE, for example.

With farmers, different tactics were tried — enormously expensive public relations campaigns, lobbying campaigns that were orchestrated by Deputies in this House and others, cash offers to farmers to mortgage their futures that were tantamount to bribery. Overtly, the Government were silent throughout all of that but nobody was in any doubt about where their sympathies lay.

If all of these had worked, Mr. Goodman would today be presiding over the same kind of monopoly in the dairy industry that he has created in the beef industry, and the dairy industry would today be facing the same parlous future that is in prospect for the beef industry. Fortunately, when farmers were given a choice, a majority opted to retain control of their own futures, and to put their trust instead in a co-operative movement that is professional and respected throughout the world.

None of this would have been possible if Mr. Goodman had not been given access to cash, to spread around like confetti. Everybody here knows that it is not easy to get access to that sort of cash. Many of us have spent time trying to help businessmen and manufacturers — usually small businessmen — to get the cash they need to start worthwhile ventures. It is all too often an exercise in knocking on one locked door after another. But Mr. Goodman had a key. The key was Fianna Fáil, and the explicit support he was given by that party in Government. This support manifested itself in a number of ways. There was the decision of the Fianna Fáil Government in 1987 to reinstate export credit insurance, and then subsequently to ensure that Mr. Goodman got the lion's share of it. These were decisions taken against the best professional advice available to that Government.

Support included changes in the tax laws, to enable a substantial amount of Mr. Goodman's income from beef processing to be taxed at the 10 per cent manufacturing rate. Further changes included provisions which made section 84 financing for Mr. Goodman more advantageous.

But perhaps the most explicit form of support stemmed from the famous press conference of June 1988, attended by a beaming Mr. Goodman, flanked by the Taoiseach and the Minister for Agriculture and Food. The purpose of that press conference was to announce, effectively, that Mr. Goodman was to be entrusted with the task of developing the Irish beef industry, essentially as the only agent of the Irish State in the matter. The package announced that day involved substantial investment by Mr. Goodman, together with significant investment by the State — up to £60 million. This programme never materialised and was a tremendous exercise in bad judgment on the part of the Government. It was to revitalise the Irish beef sector, and make it the most modern and competitive in Europe. But the reality, as we know, has been that nothing happened — except that Mr. Goodman, for the next two years, used his closeness with Fianna Fáil and Government, and with some of the most senior political figures in the land, to gain access to the boardrooms of the world's banks.

So what we are now faced with is a crisis for farmers today, coupled with a very uncertain future and a crisis for creditors, and let us not forget that we are not just talking about banks here. From the moment the examiner takes over this business, all of the debts owed to packaging suppliers, to deep freeze companies, to the ESB and other utilities, and to the Revenue Commissioners are frozen immediately.

What is left behind is essentially a carcass. Nobody knows how many people are employed by that company, since the employment practices of the business have ensured that many of the employees are now technically contractors.

This has been very useful in the past when it was necessary to distance the company from very dubious practices. Many of those employees may now find that the security of employment they thought they had is another of the Goodman myths.

I said earlier that the job we have to do is to rescue the beef industry, and to restore it to a sound footing. We must also face here the need to restore Ireland's image in the business environment around us. These are not going to be easy tasks.

I believe that we have to take a three-pronged approach. The problems facing the beef industry are deep and varied. Although they have been exacerbated greatly by Mr. Goodman's lack of commitment to anything other than himself, we would be fooling ourselves if we were to say that once Mr. Goodman is got rid of the problems will disappear. Mr. Goodman will have to be got rid of — of that there is no doubt — but we will have to do a great deal more as well.

The first prong in any approach will have to be the examiner. That will alleviate pressure in the short-term, and buy some time. Although I suspected initially that the examiner would be unable to operate without some support in the way of public funding, I now believe that there is very little reason for the State to take any risks in the matter. There is no reason, unencumbered by the outstanding liabilities of Mr. Goodman, the examiner would not be able to trade at a modest profit, at least in the short term. I welcome the assurance of the Minister that no taxpayers' money will be employed, and I propose to monitor that assurance carefully to ensure that it is adhered to.

Side by side with the day-to-day operations of the examiner, and as part of the same short-term approach, there is an urgent need to seek out new markets. I wish the Minister for Agriculture and Food well in this regard but I must add a note of caution. We must be in a position to provide the most categoric assurances about the quality of Irish cattle, particularly in regard to disease, as mentioned by the Minister for Industry and Commerce. I would like to believe that we can put ourselves in a position where any veterinary surgeon from any part of the world is welcome to inspect Irish beef at any time and that we are secure in the knowledge that we will pass that inspection. Before the examiner is appointed, there must be a rigorous examination by the courts of the circumstances involved in this mess.

This brings me to the second prong of the three I mentioned earlier. I believe strongly that there must be a sworn judicial inquiry into this whole matter. We cannot rely on the examiner alone to uncover the facts of this case and to suggest all the remedial actions that will be necessary. We must know those facts and take that action for two reasons. The first is simple: if we do not learn the lessons of our mistakes we are bound to repeat them. The second is equally crucial: we must reassure the world that Ireland is capable of regulating and controlling its affairs, that Ireland is a place where honest businessmen can be trusted because dishonest ones will be found out and punished.

The inquiry will have a lot of questions to answer. I have already raised some of them. We need to know the extent to which deceit and misrepresentation are at the root of this problem. We need to know if any conflicts of interest are involved in the enthusiastic support given to this entrepreneur by our Government. We need to know if even now the whole truth is being told. For instance, there is a deep suspicion that secret assets have been salted away to ensure that the banks will not get hold of them in trying to recover their losses. We need to know the full extent of dubious business practices to which a blind eye has been turned by regulatory authorities, the false labelling and accounting, the commercial arrangements involved in the disposal of offal and so on. We need to know the role played by professional advisers such as accountants who signed off a balance sheet just four weeks ago that revealed nothing of these difficulties. There is more. Mr. Goodman has alleged privately in his recent dealings with bankers that he has been a victim of a massive internal fraud in the company, accounting for perhaps £40 million of the missing money. What is the background to this and have the Garda been called in to investigate it?

The third prong of any solution must be a detailed root and branch analysis of the medium-term and long-term situation facing the industry. The Government must accept the bounden obligation of drawing up a plan for the industry based on the principle that no more monopolies will be allowed to be developed and taking into account the need to develop new markets based on the excellence of the product and the quality of production. Such a plan need not take a great deal of time to draw up, given the number of studies that already exist. There is considerable room for hope that the fund of expertise available to the beef industry will ensure that this industry continues to survive and prosper, unencumbered by the machinations of greed and dishonest men.

The future of the beef industry can be bright. I believe that there is a role for the co-operative movement in that future. Farmers themselves have indicated in the past that they believe the control of their industry is best served by co-operative endeavour. What is crucial here is that we recognise now that the industry cannot be allowed to struggle from crisis to crisis in the hands of unscrupulous individuals.

Could the Minister for Industry and Commerce confirm to this House that the £50 million law claim that Mr. Goodman is pursuing against the Minister and the Irish Government has now been withdrawn, as it has not been referred to in the statement read by the Minister this morning supplied to him by IBI Corporate Finance? Perhaps the Minister could give the House some information in relation to that. The Minister might also refer to the situation in relation to the export credit relief and give guarantees to the House that export credit relief will not be reinstated for this type of venture. We might be as well off just to give him the money for some of these ventures.

I would call on the Taoiseach to ensure that once the short-term situation has been resolved the necessary steps will be taken to place our beef industry on a sound footing. The Labour Party will be closely monitoring the situation as it develops and we will hold the Government responsible for any future crisis in this industry.

In the particular situation in which this industry finds itself and having regard to many other issues which we will be dealing with in more detail tomorrow, it would be wrong for this House to walk away believing its work was done tomorrow evening. I would call on the Taoiseach to reconvene the Dáil at the latest one month from now and to ensure that a full progress report is presented to the House on all of the issues we are dealing with today.

An Leas-Cheann Comhairle

I am calling Deputy Rabbitte. I ask Deputy Rabbitte, and all speakers, to exercise maximum restraint in the matter of personalising their contributions.

Mr. Spring

On a point of order, I take that remark as being totally offensive to any Deputy of this House and totally out of line.

An Leas-Cheann Comhairle

Deputy Spring has been a Member of this House for some years and he has heard the occupant of the Chair refer to that matter time out of number.

Mr. Spring

Totally unnecessary.

An Leas-Cheann Comhairle

It is a well-known tradition of this House, and I am surprised that Deputy Spring would indicate that it should be otherwise.

Mr. Spring

And Mr. Goodman can go on radio and attack colleagues in this House without anything being said. Those remarks should be withdrawn by the Leas-Cheann Comhairle. They were unnecessary.

An Leas-Cheann Comhairle

Deputy Spring knows that the statement made by the Chair is in the character of the Chair, and the Chair did say——

Mr. Spring

I am not listening.

An Leas-Cheann Comhairle

I am not too worried whether Deputy Spring listens or not. That will not dissuade me from carrying out the duties——

Mr. Spring

You are lecturing.

An Leas-Cheann Comhairle

I am not lecturing.

Mr. Ferris

The Minister was the first person to mention a name in this House. That is a fact and the Chair can read his speech.

An Leas-Cheann Comhairle

I endeavoured to indicate that you may mention it and not attack it in a personal way. That is all.

Mr. Ferris

Do you expect us to approve of the actions of the man mentioned?

An Leas-Cheann Comhairle

I would ask you to refer, as far as possible, to the organisation and to refrain, as is the tradition of this House, from over-attacking an absent person. If Deputies want to do otherwise that is their own concern.

Mr. Rabbitte

I believe that your admonition was unnecessary but if you consider that I am going to engage in the same sophistry as the Minister for Industry and Commerce, the Taoiseach and the Minister for Finance over the past week in pretending that this legislation is to have general application and is not motivated by the scandal in the Goodman operation, I do not intend to observe that particular admonition.

The decision to recall the Dáil during the summer recess for the first time in 14 years represents a desperate attempt by this Government to keep the lid on what may well be one of the biggest economic and political scandals in the history of this State. What we are dealing with today is not simply a case of a commercial enterprise being an unfortunate victim of an unforeseen military venture on the part of Saddam Hussein. What we are dealing with is a potentially calamitous situation for thousands of workers and farmers in this country, brought about primarily by the avaricious expansion of the Goodman organisation coupled with a total disregard for the interests of anyone other than the owner of those companies. For years conservative politicians, especially those in Fianna Fáil, have held up the Goodman organisation as a shining example of the very best of Irish capitalism and entrepreneurship. This was a company, we were told which had recruited the best brains Irish business could offer, a company that were adventurous and imaginative who went after new markets and were export orientated, a company founded by a man who had pulled himself up by the bootstraps, and who now, on their own account, account for some 4 per cent of gross national product.

To criticise Mr. Goodman or to raise questions about his business methods was to run the risk of being dismissed as a political begrudger or even accused of national sabotage. But sadly for us all the Goodman bubble has now well and truly burst. For the third time in seven years the Dáil has had to step in and take emergency measures to save the Irish people from the consequences of the greed, recklessness, irresponsibility and incompetence on the part of Irish private enterprise. In 1983, it was the PMPA; in 1985 it was Allied Irish Banks and ICI and now in 1990 it is the Goodman organisation.

Those who have closely watched the development of the Goodman organisation in recent years will not have been surprised at the crisis which was brought to a head by the Iraqi invasion of Kuwait. The frenetic pace of his expansion, his obsessive determination to gobble up as much of the food industry as he could acquire, his willingness to spend vast sums of money to score victories over his rivals, his disregard for labour relations and opposition to trade unions and the ruthlessness of his business tactics, are typical of the worst excesses of capitalism, especially when allied to his obsessive concern with secrecy. We have seen at home and abroad similar seemingly invincible companies, often with a powerful figure at their head, expand and expand before coming crashing down. There are striking parallels between the troubles of Alan Bond in Australia and Donald Trump in the United States and our own Mr. Goodman.

It is not surprising that it is a company involved in the meat trade that is at the centre of the current difficulties. Much of this trade appears to operate at what could be described as the margins of the law. Evidence has been uncovered of substantial fraud involving EC payments, the extent of which is unknown but some reports put it as high as £40 million. Fraud in the meat industry is not a victimless crime. Apart from the implications for price and quality of meat, the victims are the taxpayers who must foot the bill not to mention the poor and the unemployed who could benefit if the money was used for job creation or social purposes rather than put into the coffers of the beef barons.

Unfortunately, we do not seem to take business crime, or the so-called white collar crime, very seriously in this country. Indeed, it is interesting to note how much more seriously it is taken in Mrs. Thatcher's Britain. If Lester Piggott or Earnest Saunders had operated in Ireland, far from facing jail sentences they would probably have ended up as members of boards of semi-State companies or even winning a Taoiseach's nomination to the Seanad.

Goodman companies or employees of the Goodman Group have been in court on at least three occasions in the past three years. In 1987, a close aide of Mr. Goodman was convicted of attempting to defraud the Department of Agriculture and Food having been found in possession of forged South African customs stamps. A gentleman whom I will not name was fined £8,000 and received a two year suspended jail sentence. In April of last year a Goodman factory in County Waterford was fined £1,000 for irregularities in cattle documentation, and only last month a company owned by Goodman at the time of the offence was convicted and fined on two charges related to illegal labelling of meat carcases. This particular incident was the one in the Eirfreeze plant in North Wall to which Deputy Mac Giolla had drawn attention in the Dáil in March 1989, an action for which he was attacked and vilified by Mr. Goodman and a number of Fianna Fáil Deputies in this House. Former Deputy Barry Desmond received similar treatment on a number of matters he raised.

There have been many more questionable activities by Goodman firms. It was revealed in March 1989 that a penalty of over £1 million had been imposed on a Goodman firm for breaches of beef export regulations. There was also Goodman involvement in the export credit insurance scheme scandal, so described by the present Minister for Industry and Commerce, when it was revealed that one-third of the £120 million worth of beef insured for export to Iraq had not originated in this country. It has never been explained why Mr. Goodman tried to take over Master Meats in circumstances of high secrecy more appropriate to a CIA operation than a legitimate business venture, and why he continued to insist he was not the beneficial owner until meeting his bankers last week.

The Workers' Party have, on a number of occasions in the past two years, called for a full sworn inquiry into all aspects of the beef trade. The sudden threat of the collapse of the Goodman Group makes this inquiry more imperative than ever. Such an inquiry should look into all aspects of the beef trade, establish the extent of irregular or illegal activities in the interests of the industry, the farmer suppliers and workers and make recommendations as to how these practices could be stamped out.

This extraordinary recall of the Dáil has as much to do with the integral links between Fianna Fáil and the Goodman organisation as it has with protecting a key Irish industry and the jobs and livelihoods that depend on it. The protection of those jobs of meat workers and of farmers who, especially at this time of the year, are almost solely dependent on their cattle being taken off the land must be the priority of this Dáil. However, that priority must not blind Members to the fact that more and more it is becoming evident that we are staring into a financial slurry pit, nor can this House continue in the make-believe that what is good for Larry Goodman is good for the country. That consensus has been set to some extent by Deputy Barrett in his opening address as it has been set in the media: statements like Ireland needs Larry Goodman more than Larry Goodman needs Ireland are absolute nonsense.

Mr. S. Barrett

I never said that.

Mr. Rabbitte

I understand Deputy Barrett's concern is about the industry and I share his concern entirely——

Mr. S. Barrett

Be careful, please.

Mr. Rabbitte

——but the interests of the industry and the interests of Larry Goodman are not necessarily the same.

Mr. S. Barrett

I said that.

Mr. Rabbitte

Then, I apologise to Deputy Barrett for misinterpreting what he had to say. Indeed it may well be that what is good for Larry Goodman is good for Fianna Fáil, but it is not necessarily good for Ireland. Farmers, finally and belatedly, have acknowledged this fact in the conduct of the recent Killeshandra and Lough Eglish hostile take-over bid. I am sure even the farm leaders are now embarrassed about the manner in which they tacitly, at least, and, in some cases, openly assisted the Goodman take-over bids of various co-ops. It was only when it came to the Killeshandra and Lough Egish take-over that the farmers in the north-east copped on to themselves and to the fact that Larry Goodman's interests were not consistent with theirs. It is regrettable that those co-ops had to spend £2.5 million fighting off that take-over bid. Some of the literature used in that campaign is very interesting and prophetic — I will return to this later — but a number of the cartoons relating to Mr. Goodman's aspirations, particularly the cartoon showing Goodfish International as a giant shark chasing a small producer underwater, are particularly striking and have turned out to be very prophetic.

The present crisis also exposes the fact that Goodman is no more than a commodity trader with virtually no value added accruing to the Irish economy. I want to take the opportunity of this extraordinary Dáil debate to demand again a full inquiry into the Goodman group of companies. I shall set out some of the reasons. The Workers' Party consider such an inquiry is now imperative. First, it is clear that Larry Goodman's meteoric rise is at least partially attributable to the fact that he has always enjoyed the partisan political support of Fianna Fáil. Knowing the inside political track has enabled Goodman to get access to exceptional lines of credit and to benefit from risky but profitable Middle East contracts, confident in the knowledge that he is guaranteed by the Government so long as Fianna Fáil remain in power. This did not start in 1987. For example, some years ago there are good grounds for believing that Mr. Goodman was allowed to cherry-pick the best of the ICC property portfolio because he had the inside political track before any other body became aware.

Is it not true that a blind eye is turned by the Revenue Commissioners to the type of "remuneration packages" enjoyed by his senior executives because of Mr. Goodman's political connections? Similarly, would other companies escape scrutiny if they operated the contract system for such a large proportion of their workforce in the manner in which Mr. Goodman does and where PAYE and PRSI payments are not returned to the Exchequer for many workers?

However, the most disturbing cause for concern relates to allegations of misuse and abuse on a grand scale of the privileges conferred by the generous Fianna Fáil Government's support for the failed 1987 £260 million development plan for the beef sector.

When Fianna Fáil returned to power in 1987 they made two disastrous decisions both involving Larry Goodman as the major beneficiary. First, they re-introduced the export credit insurance scheme and operated it in such a manner that the then Leader of the Progressive Democrats claimed in the Dáil, according to the Official Report, column 2033, of 10 May 1989, that:

There are good grounds for believing that a substantial abuse has occurred, that the actions of some of those involved were deliberate, that as a result there is a risk to the Irish taxpayer of a liability currently measured at not less than £56 million and potentially much more and, most important, that this state of affairs has come about as a result of a series of steps involving governmental and ministerial intervention and responsibility.

They were the precise words of the Minister who now comes into this House to introduce this legislation and to maintain the charade he has maintained in interviews up to now, that it is really not motivated by problems in the Goodman empire. I welcome the fact that the same Minister subsequently cancelled the export credit insurance scheme. Had the not done so what kind of situation would we be in now? ICI would be liable to be short of £200 million as a result of the Iraqi situation, and as a result we, the taxpayer, would be expected to underwrite it. I give credit to the Minister, Deputy O'Malley, for taking that decision but I give him no credit for maintaining the ridiculous illusion that this debate is not about helping one giant company that has run into trouble out of their own greed, avaricious and imprudent investments abroad. In the Official Report of 10 May 1989, at column 2033, Deputy O'Malley stated:

The scale of the abuse and of the potential liability of the State is unprecedented.

Second, the Fianna Fáil Government handed over development of the beef sector to Mr. Goodman, offering him extraordinarily generous assistance to do so. The £260 million development plan — the most major announcement ever made in the food industry here — was to consist of £60 million in assistance from the IDA and the EC and a package of section 84 loans totalling £170 million. Already it has been said in this debate, as it has on a number of occassions in this House, that that development plan for the food industry has collapsed. Although I had serious reservations about it from the beginning I regret very much that it has collapsed because, at least, it was an initiative to develop a major indigenous industry. I do not agree with the way it was done or with the manner in which all our eggs were concentrated in the Goodman basket but what this House apparently does not have is information that has been supplied to me to the effect that notwithstanding the collapse of the package that Mr. Goodman has proceeded to draw down a great deal of the £170 million package of section 84 lending. This is an extraordinary situation which, of course, effectively defrauds the taxpayer.

Deputy Spring's memory is slightly faulty on this point because it was not the Minister for Agriculture and Food who was jostling for position at the elbow of the Taoiseach and Mr. Goodman when that package was announced but Deputy Joe Walsh, Minister of State at the Department of Agriculture and Food. Deputy Walsh has been remarkably silent since this affair happened. At that time we were told he was the man who first brought the package to Government. Deputy O'Kennedy, the Minister for Agriculture and Food sulked for some months after having been excluded from the Taoiseach's company. Did Deputy O'Kennedy know something that was denied to the rest of us in this House? What does the Minister of State at the Department of Agriculture and Food, Deputy Walsh, have to say now about the package he brought to Government?

I am now stating in this House that I have information which suggests that Mr. Goodman proceeded to draw down much of the £170 million package of section 84 loans. I am stating that it is my information that those exceptional credit lines were manifestly not used for the purposes for which they were approved; rather that Mr. Goodman used these facilities to fund imprudent and speculative investments outside the State that had nothing to do with the beef industry and that in that process the Exchequer was effectively defrauded of substantial revenue. These are serious charges which I am asking the Minister for Industry and Commerce to address. Has Mr. Goodman used the section 84 facility which formed an integral part of the development plan approved by Government for the beef industry — and the beef industry only — to enable him fund speculative ventures outside the State? I would remind the Minister that when in Opposition on 10 May 1989 he described the manner of abuse of the export credit insurance scheme by the Goodman organisation as a "fraud on the Irish taxpayer". Does he agree that resort to the facilities approved by the Government in the context of the 1987 development plan, in the manner that I have described, is a more serious fraud on the Irish taxpayer? May I take the opportunity to ask the Minister if he can tell the House whether the IDA did actually expand taxpayers' money on feasibility studies associated with the so-called joint venture with the Goodman organisation?

The Minister for Industry and Commerce, Deputy O'Malley, is now asking the House to approve legislation to protect Mr. Goodman from his bankers, although, like the Taoiseach, he persists in the sophistry that it is not motivated by the Goodman crisis. Yet, is it not true that Mr. Goodman's problems are contributed to by his recent decision to raise a loan of £20 million and to put it on deposit, as a tax dodge, with Mercantile Credit, in order to avoid DIRT tax and that as a result of the problems in Mercantile Credit, and other problems, the £20 million is now missing? I would like to hear the Minister for Industry and Commerce address whether the information which he has been supplied with by IBI Corporate Finance Limited makes reference to this. Is the Minister aware of it?

If our actions are successful today — and The Workers' Party hope they will be — in protecting the beef industry coming into peak season, together with the livelihoods dependent on it, this crisis makes a full inquiry into the Goodman organisation, in our view, imperative. How can any Government justify leaving the families of so many farmers and meat workers at risk? They are dependent on a group of companies, the hallmark of which is Mr. Goodman's obsessive secrecy and financial chicanery. Why has Mr. Goodman moved to restructure 15 holding companies as unlimited liability companies? The only sensible explanation can be to avoid the terms of the EC directives on disclosure of company information. Time and again in this entire saga that question of disclosure of information comes to a head. Mr. Goodman, at all stages, even through resorting to gagging writs has avoided answering pertinent questions raised in the public interest both outside and inside this House by public representatives.

Sections of the media are busy telling us that Ireland needs Larry Goodman more than Larry Goodman needs Ireland, that we should have admiration for the fact that he is cashing in his chips to help recovery with the exception of a few family trusts. I would like to know how much is salted away in those family trusts. For example, if a building society forecloses on my mortgage I will not get away with pleading any family trust if I want to retain a roof over my head. It is fatuous of the media to be lecturing us on how grateful we should be to Mr. Goodman that he is going to cash in his stake in Food Industries or will realise his declining share in Beresford or whatever, to expect us to welcome that and acknoledge that he can have family trusts while workers face the prospect of being thrown out of jobs and farmers risk the calamity of a disaster in the beef industry.

Will the Minister now confirm the accuracy of information available to me that suggests that today's Bill is a third choice proposal only of the Goodman organisation arising from the meetings that have been held with the Taoiseach, one of which Deputy Spring referred to in Kinsealy last Thursday? I ask the Minister to deny that the first proposal which the Goodman organisation put to Government involved a £300 million rescue package which Mr. Goodman demanded the Government should underwrite. I challenge the Minister for Industry and Commerce to deny that. I should also be interested to hear the lineup at Cabinet that resulted in that proposal quite properly being thrown out.

The second attempt by Mr. Goodman's friends in Cabinet involved an approach to the EC Commissioner, Mr. Ray MacSharry — a man who knows a thing or two about buying cattle himself — in an attempt to persuade him to bring forward an EC plan that would be of similar assistance to Mr. Goodman but which would be cosmetically packaged as being in the interest of the "total industry". May I ask the Minister whether it is safe for me to presume that this may still be done although, presumably, it could not be done sufficiently quickly to keep the wolves from the door, but that this package is likely to emerge still and to be seen to complement the measures we are enacting today?

There is a savage irony for all of us that this giant private enterprise, who so bitterly and with such scant regard for the truth, resented any Member of this House raising, in the public interest, any legitimate questions about the conduct of his affairs, is now dependent on the same public representatives to enable him forestall his creditors. Perhaps now we understand somewhat better the anger and incoherence of his riposte to the concerns raised in this House by Deputy Mac Giolla and former Deputy Barry Desmond last year. Indeed it is interesting to note that, only a few months ago, in a similar incoherent denunciation of the present Minister for Industry and Commerce, arising from what has been dubbed the mystery meats affair Mr. Goodman claimed to have 28 per cent of the beef kill. I am sure some of the media will have the press release — rambling, incoherent and angry as it was — still on file. Now two or three months later, when it suits him, he tells us he has 40 per cent of the beef kill and, as such, of course we must rescue him; to do anything else here would be against the national interest, would be heretical.

The Workers' Party are convinced of the need for a thorough and rigorous inquiry into the Goodman affair because if, miraculously, this crisis should blow over Mr. Goodman may again embark on commercial adventurism under-written by the Government. Alternatively, if the crisis worsens, this House may yet be presented with the even more unpalatable option of baling out Mr. Goodman at taxpayers' expense. Either way we are satisfied that such a dominant position in the industry must not be retained by Mr. Goodman.

I should like to refer to a passing remark of Deputy Spring concerning his having a different view on this from that articulated by my party leader, Deputy De Rossa. The extent of the information revealed to this House by Deputy Spring and me is such that, in the interests of the industry and of the jobs involved, we may well reach a stage yet at which it will be necessary for this House to consider such a proposal from Government. Our response to that would be that the overriding interest would be the protection of the beef industry, jobs and suppliers, that one simply cannot take up a position of rejecting out of hand State investment to rescue that industry. Of course nobody is suggesting that that State investment should be for the benefit of Mr. Larry Goodman. We made that mistake already in the previous examples of the ICI and AIB.

Financial circles around this city are still incredulous at the failure of the Government at that time to secure an equity stake from the AIB; the equity stake was there for the taking having regard to the gravity of the position then being faced by AIB. Similarly here I am quite satisfied that, if it should come to that eventuality, the jobs must be baled out, in these circumstances farmers must be rescued with no blame attaching to them but that the cost of doing so must be that the State will take equity participation in this company and, furthermore, that this company will be broken up in the public good. For example, there are co-operatives who have expressed an interest in this company in the past who are at present hogtied. At present nobody can compete with this man because of the manner in which he has the inside political track and has tied up, locked-in FEOGA and IDA grants.

An Ceann Comhairle

I intervene to advise the Deputy that there are two minutes remaining of the time available to him.

Mr. Rabbitte

There are a good deal of other things I wanted to say, but let me put it this way. It is time that the myth of the Goodman organisation contributing to added-value in this economy was exposed for what it is, a nonsense. Even looking at the performance of the co-operatives which many people contend is not as good as it should be and so on, it must be acknowledged that many of them have been very successful in business to business selling, in creating branded products for long life on shelves in Germany, Britain or wherever. That is not done in the manner of the process engaged in by Mr. Goodman.

Is it not time that we examined whether the structure of the industry is right in this country? For example, take the failed Greenfields project that was to go into the empty Polaroid factory in Deputy Stagg's constituency. They attempted to develop such a new branded beef product and had to abandon it. In their view £3 million or £4 million would have made the difference between success and failure. Yet here we are, as open-ended public representatives, handing out guarantees and grants to this company when all that accrues to this economy are the wages paid to the workers by the Goodman outfit. Of course, most of those are on contract. Mr. Goodman's style of take-over has been accompanied by tactics of bullying the unions. He has introduced confrontation post every take-over success, has introduced a system of contract labour that has operated throughout the industry.

Our overriding concern is that the industry and jobs within it must be protected. But it is imperative that we avail of the opportunity afforded us by this Bill to ventilate the very serious public concerns and public interest that arise as a result of the commercial adventurism of Mr. Larry Goodman.

Mr. Flood

As a member of the committee to which the Minister referred in his introductory remarks I am indeed pleased to participate in this debate. That committee considered this legislation in its fuller context under the title of the Companies (No.2) Bill, 1987, and spent considerable time discussing this section of that legislation. We felt it to be an extremely important part of that Companies Bill and teased it out at some considerable length. Indeed we felt it to be a most essential part of any new company legislation. This was based on the experience of many of us in our role as public representatives and in the tasks which we were sometimes called upon to perform in trying to help different companies in difficulties, for one reason or another.

The role of the examiner is most important and innovative in so far as industry is concerned. As time goes on and the position of the examiner is utilised in industry, I am convinced that we will see its beneficial aspects in terms of industry. I also believe that this legislation will allow for many of the questions posed by Opposition speakers to be answered, especially in regard to the Goodman organisation. In studying the legislation, it is clear that the powers of the examiner are very wide indeed in relation to seeking answers to questions regarding the financial aspects of the Goodman organisation which have been rightly asked by members of the Opposition. If an examiner was to be appointed to a firm like the Goodman organisation — or any other — he would have the power to seek information, documents and financial reports and to question officers of individual companies in seeking background information as to how a company got into difficulties. The examiner will be a very powerful person so far as the company are concerned. The legislation will be beneficial from that point of view and will allow major questions posed here to be answered.

We cannot ignore the present international situation arising largely from the difficulties in the Gulf region and we cannot expect to be untouched by what is happening there. We are not alone in this regard. Last week a major UK company made a decision, arising from what is happening in the Gulf region, to lay off 500 workers because of the trade embargo. That is only one difficulty which has been made public but I am sure there are many, many other companies which, for a variety of reasons, will be in difficulty as a direct result of what is happening in the Gulf region. For that reason, we should pass this important legislation because, whatever happens over the next months or years, we can be sure that the difficulties to which I referred will impinge to some extent on Irish industry and that we will be unable to ignore them. The legislation will be of great benefit to different Irish companies if they get into trading difficulties largely as a result of circumstances outside their control, particularly external circumstances.

I am sure that meat is not the only product we have been exporting to the Gulf region. We have built and developed a very sophisticated electronics industry here and many of our nationals work in the region installing advanced technological systems covering a wide range of uses. Many of those products have been manufactured in this country and they will also be affected by the trade embargo. They will have to take action to try to minimise the effect on their industrial base in this country. We should not be critical of their involvement in export markets because we know that a country such as ours must, from an industrial point of view, export or die. That may be a cliché but we must find markets for our products, goods and services. We must ensure that there will not be a major difficulty in Irish industry continuing to pursue export markets. As we know, the international commercial arena has changed dramatically even in the last year; new markets have opened up and old markets have, for one reason or another, been closed.

The marketing executive in this country trying to break into new areas must continue to be free to do so. Unfortunately, exporting goods abroad always involves a certain risk. We will never be able to effectively cancel that risk; it will always be there. Chances must be taken by those sending goods abroad. There is always the worry as to whether they will arrive safely, that they are utilised for the purposes for which they were intended and that the purchaser will be in a position to pay for them. Very often, in foreign markets, there are tough negotiations and stringent conditions are laid down. If the exporter is not prepared to meet the terms and conditions the buyer in the foreign market can simply thank them and go elsewhere. That is always a risk in the export area unless you have specific guarantees on payments or are paid in advance. However, we do not tend to operate in the international commercial sector on the basis of always getting payment in advance for goods and services. The industrial bases here, in the food, industrial and electronics sector, must seek new markets all the time, expand existing markets and, as far as possible, try to ensure that there is not a detrimental effect on the base at home by doing bussiness with foreign buyers.

Of course there will be occasions when the commercial climate will go disastrously wrong in an individual country for a variety of reasons. That is where the difficulties to exporters in this country can arise. However, we cannot batten down the hatches and not get involved in exports because we cannot be sure of payments. For that reason we must have some sympathy with the Goodman organisation in regard to what happened in the Gulf region.

The farming community were doing well through the Goodman organisation in regard to cattle sales, etc., in so far as payments were concerned. I understand that farmers were paid on the day. From my limited knowledge of the farming sector, I am sure that was welcomed by the farming community and I know that other, separate organisations in the Goodman Group also operated a similar policy.

In the past we know that far too much of our cattle stock was going out on the hoof and we frequently heard complaints from the urban areas — apart from the rural sector — regarding the non-processing of meat in this country. There was a movement in that direction in the last five or ten years — and rightly so — because it meant that we were providing jobs here in processing beef instead of exporting it. The processing of beef is not necessarily or essentially a rural concentrated industry. Many of the associated industries in this sector are based in larger urban areas. This industry transcends any particular individual sector of our commercial base.

The people who process beef and other meat for export are taking the chance I referred to earlier. There will always be difficulties in this area. As the Minister stated earlier, and as we know, we export a tremendous amount of processed beef of one kind or another. There are difficulties in some of these markets and, as some of our rural colleagues can undoubtedly tell us, exporters of lamb to the French market are faced with major difficulties because French farmers are taking action to try to deal with imported meat from this country and the United Kingdom. These markets were to some extent freely available to us but because of changing circumstances they are being closed down. This means our producers have to seek alternative markets further afield, even in areas where the commercial base, financial and otherwise, is not as established and firm as they have been used to. All these factors cause problems for exporters. Today one major company is involved but tomorrow, next year or the year after, another company may be involved. We do not know what markets our exporters will be able to penetrate but we can be sure that we need those markets.

Because of the difficulties which can arise in foreign markets in terms of payment, etc., for the goods supplied, we need this legislation. Not alone will it be of benefit to exporters but it will also benefit the home market. We seem to have been addressing one particular industry in this debate, but this Bill will be of benefit right across the commercial sector. We all know of companies which have been pushed to the wall and driven out of business by the precipitate action taken by a banker creditor or supplier.

This legislation will give industries, whether small, medium or large, three months grace through the appointment of an examiner who will give calm and rational consideration to their trading position under the control of the courts. This means realistic decisions can be made about the possibility of preserving or protecting a particular industry. As we have seen too frequently, good solid companies, through no fault of their own, were pushed to the wall by the early and unnecessary action taken by one element in their trading relationship, for example, a banker, creditor or supplier. The problem was that there was no provision in existing legislation which would have given those companies a breathing space so that they could preserve and protect jobs and their commercial establishment. This legislation will give such companies that breathing space. It is very specific and detailed legislation and is weighted in favour of the workers who are interested in preserving their jobs. The three months breathing space will give these industries and their workers an opportunity to save their companies. Frequently in the past companies were saved when they were given some time to resolve their difficulties.

The effect of the appointment of an examiner on any industry is crucial. Section 5 points out very clearly the various effects the appointment of an examiner will have on a company. It will give the company the opportunity to gather their forces to see if they can be sustained and saved. I am absolutely convinced that the absence of legislation of this kind has led to the untimely demise of many potentially good commercial organisations which were hastily liquidated. Some companies which were being pushed to the wall by an individual banker or creditor fought back strongly, with the co-operation of workers and management, and were able to survive and, in some cases, to grow and expand. This legislation will give such companies the opportunity to fight back.

I want to reiterate the importance of the role of the examiner in eliciting the information required to allow him to draw up a plan for presentation to the court on the way forward for the business to which he has been appointed. This will confer on him very substantial powers for getting information either through the production of documentary evidence, books etc., of that business or examining individuals within the organisation and eliciting the required information under oath. The examiner will have very strong powers to get the sort of information referred to here this morning in regard to the particular company. When this legislation is in place the examiner will have these powers and report his findings to the court.

All these provision taken together make for good solid legislation. The special committee of this House, comprised of Members from all sides, met for one year and had detailed discussions on various aspects of the Companies (No. 2) Bill, 1987. We spent a considerable time discussing this section of the Companies Bill and, if my memory serves me correctly, we basically agreed on the final wording of the legislation which, I believe, will be of tremendous help to industries.

An Ceann Comhairle

I must call another Deputy.

Mr. Connaughton

With your permission, a Cheann Comhairle, I propose to give my colleague, Deputy Austin Deasy, ten of my 30 minutes.

An Ceann Comhairle

Is that satisfactory? Agreed. The time available to the Deputies is 20 minutes.

Mr. Connaughton

This House would not be in session were it not for the financial problems facing Goodman International. No matter how the Government or even Deputy Flood in his wisdom tries to explain the importance of this new legislation, we just would not be here today were it not for what has happened to Goodman International.

The Bill before the House today should be judged on its ability to meet three main objectives. First, the short-term future for the Irish cattle industry is in jeopardy. It is in jeopardy anyway, but it will be particularly so if the Goodman group of meat factories close next week or the week after. Let that be clear to the Government and to the examiner, whoever he or she might be. Based on the traditional system of 50 per cent of our national kill being effected during the months of September, October, November and December each year and on its staying at that all the time, there would be absolute mayhem at our factories and our marts because we would not have the killing capacity, and any of us who happened to be involved in a professional way with the meat industry back in 1974 knows what it is like to have cattle ready for sale and nowhere to go with them. Therefore, it is most important that that be said straightaway as far as farmers are concerned. Literally thousands of farmers would become redundant if that happened, not to speak of the thousands of workers who would lose their jobs. If it were farmers and workers who were in the position Goodman International are in today, would we be here? Most definitely we would not.

It appears from figures for the trade that about 90,000 extra cattle have been killed at this point this year over last year. However, this is offset by the fact that there is an almost total slow down in the numbers of shipments of live cattle. I understand that for very good reasons — or very poor reasons depending on how you look at it, because of the scare of BSE — since last July that has almost terminated. That means that we will have just over 500,000 steers to kill in our Irish factories between now and Christmas. It is important that I put on the record how they will be killed and where they will go. About 125,000 will be slaughtered in September: 20 per cent of that kill will go to the commercial market, supermarkets in Europe etc., 75 per cent will go into intervention and 5 per cent will go outside the EC. In October the numbers rise dramatically and we will have between 175,000 and 200,000 cattle to kill that month: approximately 15 per cent of the kill will go to the commercial markets, 65 per cent into intervention and, it is hoped, 20 per cent to other markets outside the EC if we get a foothold on the Iranian and Egyptian markets. The November figures will resemble September with a much lower, 50,000, kill in December. That is the background to what is going to happen in the immediate future.

The Bill's second major objective must be to grant sufficient powers to the examiner to conduct an overall investigation into the affairs of the Goodman group of companies which has been called for many times today. However, the examiner must have the necessary powers not only to investigate every aspect of Goodman International Meats as we know them but also to go over a number of years to establish what benefits have accrued to the company, if such benefits were available to other companies in like businesses in similar circumstances and whether those could be used by other meat processors for one reason or another. The examiner must also examine Irish and EC funding paid to Goodman International by way of intervention, export refunds, aids to the private storage scheme, moneys or concessions from section 25 of the Finance Act, 1987 and, of course, the export credit insurance scheme. Above all else, the question of cross-subsidisation of other companies within the group must be looked at. Nothing short of a full exposé of the entire operations of the company will be acceptable on this occasion. Furthermore, the obvious unique relationship between the Fianna Fáil Government led by the Taoiseach, Deputy Charles Haughey, and Goodman International requires scrutiny and great attention.

The £260 million food processing package announced two and a half years ago by the Taoiseach, surrounded on that day by half of his Cabinet and with Goodman International either in the wings or there but all together on the one stage——

Mr. Deasy

The Minister for Agriculture and Food pushed the Minister of State at the Department of Agriculture and Food off his seat.

Mr. Connaughton

They spent six months trying to work that one out. Incidentally, we have never heard of the Minister for Food since that, whatever happened. Anyway that is the day Joe Walsh said food processing was on the fast track. I wonder what the "fast track" meant.

An Ceann Comhairle

Deputy Joe Walsh, Minister of State at the Department of Agriculture and Food.

Mr. Connaughton

Minister of State at the Department of Agriculture and Food. However, the Cabinet gave their approval for this deal although the role of the IDA had remained a secret at this stage. I have brought this on to the floor of the Dáil on numerous occasions. I want the Minister to inform the House if the IDA had been given sufficient time to evaluate the project and what their recommendations to Cabinet were. Surely for a huge package by Irish standards the Government must have had all the relevant details about the Goodman Group before they decided to play footsie with them on this scheme. Was there indecent haste to ensure that Goodman benefited before any other company could get in or did the Government jump the gun and prematurely announce the deal? Many neutral observers found it difficult to understand, and still do so, why so many of the personalities involved in Goodman International in the takeover of Westmeath and Bailieboro' were closely associated with that party.

It is in the interests of Irish farmers that we should have a number of meat processors in this country who have the ability to handle big international meat deals, and a vital element is to have true competition around. The international trading of meat is a hazardous business at any time with so many variable factors to contend with. Because of shrinking world markets for beef, mainly in the most politically unstable parts of the world, the competition for the contracts is razor sharp. I have to say that Goodman International have the muscle and the expertise to deal worldwide.

However, many smaller yet very efficient companies argue that they were unable to draw on the many benefits that were available at a particular time and were unable in some cases to gain access to certain markets as a result of this. There is no reason to believe Goodman International will lose any of their markets or contracts or their continued involvement in the export of meat because of what has happened, and I hope what we are doing here today will ensure that they trade in meat after this, but I will qualify that to some extent in a moment. It is vital that there is a competitive element in so far as export markets abroad are concerned and that other companies who so wish are allowed the facilities of the same level playing pitch.

The Minister must explain how the examiner will provide working capital. This is a big question and will test the mettle of this legislation. Where will the working capital come from for Goodman International to purchase the large numbers of cattle I hope they will be allowed to do between now and the end of the year? I assure the House I am not speaking of small potatoes on this. As my colleague, Deputy Seán Barrett asked, where will the money come from to pay the huge staff? There must be a decision by the bankers involved and by the examiner when he is put in situ. That must be a central part of this rescue operation. If that money is not up front, there is no point in the Government hiding behind an examiner being installed at this stage, and the legislation we have here today will prove absolutely useless.

I want to say a few words about marketing of beef. This is the time and place, although I have referred to it on many occasions in the past year in the House. Our national interest would be best served by commercially selling our beef on markets where quality would command premium prices. We are no better at marketing today than we were this day ten years ago; if anything, I would say we are somewhat worse because all we do is lump it into intervention if it is there and that is the end of the story, and 75 per cent of our entire output will be slammed into intervention this very year as it was last year. The Minister for Agriculture and Food seems to have little interest in creating an environment to commercially sell meat products abroad. Look at what the Government did to CBF, the meat marketing board. Their budget has been cut by the Government by 50 per cent over the past two years. Commissioner MacSharry seems utterly unconcerned that the orderly marketing of beef has great potential as far as this country is concerned. Winter beef fatteners, a very important group of farmers, have been going through a nightmare over the past three or four years. Many such farmers will not be involved in winter production of beef at all this year. The knock-on effect on prices for store cattle is nothing short of disastrous. Neither the House, nor the Minister for Agriculture and Food sufficiently realise just how bad cattle prices are, particularly for store cattle. Unless store producers receive some other form of income they will be put out of business shortly. Commissioner MacSharry never gave any incentive to meat processors to market beef commercially. That is one black mark against him.

We must have a marketing strategy if we are to have an efficient industry. This demands a continuous supply of cattle all year round. Farmers, meat processors and the EC would all gain from such a strategy. The Minister should be giving the lead in this matter but instead both the Minister and Commissioner MacSharry have shown themselves to be totally disinterested in such a development.

The handling of the market crisis in Iran and Egypt confers no glory on the Minister. I wish to put on record that while the EC ban on ministerial visits to Iran was in place because of the Salman Rushdie affair both France and West Germany, colleagues of ours around the EC table, managed to do deals with Iran. How do they justify their actions? Was it the Rushdie affair or BSE disease which prevented Ireland from making progress? The Minister did not sufficiently impress on these Middle Eastern countries that Ireland has no indigenous case of mad cow disease. Unlike Britain, we are able to identify the source of the disease. Let it be said that we have imported any problem cases that we have and have dealt with them in a very professional manner. When is the Minister going to Tehran? I should like to know the day and the time and to know if he is going to Cairo. No pressure has been brought to bear on the Egyptian authorities with whom we have a good track record. It is a scandal at a time when we cannot secure markets that the Minister is not operating like a roving ambassador. The Minister should be visiting all countries trying to secure markets for beef. Instead of that we find it difficult to get him to leave the country. When the Minister was President of the EC Council of Agriculture Ministers he blew a very loud trumpet when he secured an agreement between the UK and other EC countries who had demanded a ban on UK imports because of BSE. That was a good decision. When he took off his cap as EC President he proved useless at selling Irish beef abroad. Our exports of beef are extremely important to us, more so than to any other country in the EC.

It is important that we should have this group of companies to ensure real competition but everyone should be treated fairly and share in any benefits that might arise. We must protect the taxpayer from exposure to any losses that might accrue. The Minister told us that there is a gap of £300 million between the liabilities and realisable assets of the company. Obviously, we want the company to continue trading but we do not want to wake up one morning and find that the losses have been passed on to the taxpayer. This would not be acceptable.

An Ceann Comhairle

I wish to advise the Deputy that five minutes remain to him and his colleague, Deputy Deasy.

Mr. Connaughton

Is that five minutes altogether?

An Ceann Comhairle

Yes. I indicated to the Deputy that only 20 minutes were available.

Mr. Connaughton

We had only 20 minutes between the two of us?

An Ceann Comhairle

That is correct.

Mr. Connaughton

I am sorry. I thought we had 30 minutes. I hope Deputy Deasy will give me a moment or so to conclude. It has been represented to me that under the export credit scheme, which was discontinued by the Minister some months ago, almost £50 million is owed to the Goodman Group. I hope the Minister will comment on that and say if there is any truth in the story that is going around. Farmers and farm leaders are anxious that the Bill would provide for preferential payment to them for agricultural produce already supplied. Will the Minister state if such a provision is contained in the Bill?

I lay the blame for the collapse of the Goodman Group squarely on the shoulders of the Government. It will not be acceptable for the Government to shrug their shoulders and say that the matter is out of their hands and that it is now up to the examiner and the courts. There are many questions which must be answered and my colleague, Deputy Bruton, and others will deal with them on Committee Stage.

The collapse of the Goodman enterprise poses a major problem for Ireland and for all those employed by the group. Nothing short of total commitment by the Government, who caused most of the problems, will satisfy the people.

An Ceann Comhairle

Deputy Deasy has a little over two minutes.

Mr. Deasy

I hope the Chair will allow me a little licence on Committee Stage because I will be unable to say all I have to say in two minutes.

An Ceann Comhairle

That is another day's work.

Mr. Deasy

Larry Goodman's reign might be over but we all hope that the Goodman empire will be maintained, that the examiner will sell it off as a series of going concerns and that the overall enterprise will continue. It is important that the industry as we know it is retained. This whole episode reminds me of a dancehall brawl where the big fellow is knocked down and every gurrier in the place wants to put the boot in.

Larry Goodman has done more for the beef industry and for agriculture than any other individual since the foundation of the State, and let anybody try to contradict me on that. Next to the Taoiseach, and Deputy Liam Lawlor, I probably know the man better than anybody else in this Assembly. He is a tough hard-headed businessman. He has brought agriculture and the beef industry out of the 19th century and into the 20th century. He has created an empire which employs 2,500 people and processes 40 per cent of the beef here, and he has raised farm incomes enormously.

In the mid-seventies when we joined the EC, the catchcry was that we should keep the jobs at home and stop exporting cattle on the hoof. That is exactly what Larry Goodman has done. When we joined the EC, 70 per cent of Irish beef was exported as live cattle. Today the amount exported is as low as 2 or 3 per cent of the total.

An Ceann Comhairle

I am sorry to have to tell the Deputy that the time available to him is exhausted. I must now call another speaker.

Mr. Deasy

I will elaborate further on Committee Stage. I will have stronger words to say and additional valid points to make. Let us not overlook the good this man has done. If there are criminal charges to be answered, let them be answered but let us judge people on what they have attained and according to the law of the land.

Mr. Stagg

The crisis in the beef industry, resulting in this rushed emergency legislation, did not develop because of the Gulf crisis, of mad cow disease or of Larry Goodman's incompetent investment decisions. These were certainly all contributing factors. The real roots of the crisis lie in the long-term neglect, complacency, ineptitude and craven private sector policies of consecutive conservative Governments in the agriculture and food sectors.

First, Irish agriculture is dangerous and over specialised. Beef, along with milk, makes up 70 per cent of total farm output, whereas before the much vaunted CAP these two commodities made up less than 40 per cent. This concentration arose because price support policies favoured sectors like beef which need high acreage and capital-intensive farming. Not only has Government policy allowed an unhealthy concentration on just two commodities, they happened to be commodities which favour larger, ranch-style corporate farming.

Second, Irish beef production is highly seasonal, six times more seasonal than the rest of the EC. Forty-six per cent of cattle are killed in one three month period of the year resulting in over reliance on intervention, workers being put on short time and under-utilisation of factories. Because we did not invest in full year beef production, we set ourselves up for major economic problems in the event that something went wrong in the beef trade during the slaughtering season. Now it has.

In 1987, the Fianna Fáil Government invested considerable resources in the beef sector. This made sense since our food production was being wasted in live exports and intervention. However, even at this stage, policy planners should have sensed the long term signals. EC beef production was getting out of control while consumers were eating less beef. While the beef sector should be developed, it was wrong to make this the long-term focus of Irish agriculture since it was in slow decline. Agricultural expansion cannot primarily be based on the beef sector in the long term.

The Government entrusted the development of the beef sector to Larry Goodman and his many incestuous companies. Export credit insurance covered Goodman's risks in developing Middle Eastern markets. In return Goodman made a deal with the IDA. Where is that deal today? Larry Goodman agreed, in return for the taxpayers' underwriting of his business risks, to invest in the beef sector. This meant a £260 million investment in the beef industry, including the construction and modernisation of processing factories.

In no time at all Goodman reneged on his part of the agreement. He took his massive profits, subsidised by taxpayers' money, and ploughed them into foreign food and property companies, property speculation and a host of other disastrous investments. Goodman landed the State with a liability of £110 million under the insurance scheme even while he was engaging in fraudulent practice by using non-Irish beef. The IDA plan was thrown out the window.

An Ceann Comhairle

Deputy Stagg used the word "fraudulent". I must admonish the Deputy that he ought not to make such serious charges against a person outside the House. Members should not make such charges in a privileged assembly of this kind.

Mr. Stagg

I was referring to matters which arose in earlier debates concerning a particular company.

An Ceann Comhairle

The Chair deprecates the word "fradulent".

Mr. Stagg

I will withdraw that word. The IDA plan was thrown out the window and no new investment, no new factories materialised. There were no new jobs. In fact existing jobs, despite what the last speaker said, were turned into "yellow-pack" jobs where unions were not allowed. That is the existing situation. There are now fewer people involved in meat processing here than there were before the advent of Larry Goodman on the processing scene.

The Government's policy was not only in tatters, it had created a monster which was out of control. The Government had no comeback on Mr. Goodman because of the method of subsidy — underwriting foreign trade without any conditions attached. The Government could not influence the company's policy, their investments or profits. These profits, resulting from taxpayers' subsidies, should have been ploughed back into the Irish economy and agriculture. Instead, they went to amass a personal empire for one individual.

Given that the Government were putting so much store by Mr. Goodman, it is amazing that they never required financial details of his companies — something that occurs under ordinary grant-aid applications. Indeed, so fanatical was Mr. Goodman about the secrecy of his corporate information that he removed the limited liability of his companies. Even without such financial details the Government should have been alarmed at the dangerous concentration of beef processing in the hands of, effectively, one person. A minimum of 40 per cent of beef processing is controlled by Goodman, amounting to 3 per cent of GNP. Another concern should have been the dependence on unstable Middle Eastern markets, namely, three countries, which make up over 40 per cent of all foreign beef trade.

The resulting crisis developed from over-dependence of agriculture on the beef sector, over-dependence of beef production on one three-month period every year, over-dependence of the beef industry on one company, indeed on one individual, and over-dependence on exports to just three unstable national markets.

This is the economic anarchy of the private marketplace. It has nothing to do with developing the industry, nothing to do with the creation of jobs or national wealth, but everything to do with rewarding the most vicious, unscrupulous players in the game. The Government have not only tolerated this Russian roulette with the beef industry, they have openly participated in it.

The Labour Party consistently opposed the Government's propping up of the Goodman business empire. Because we exposed the special favouritism shown to Mr. Goodman by Fianna Fáil Ministers, Labour TDs had threats made against them by Mr. Goodman and his representatives. This bullying and thuggery shows Goodman to be the ugly face of Irish capitalism.

Goodman, whose profits came courtesy of the taxpayers, makes disastrous investments. He cons bankers into giving him more credit to make even further disastrous investments. One mess-up with a shipment in Iraq and the entire beef sector stands at the precipice. The Government's response is to rush through a Bill to protect Mr. Goodman from his creditors and the beef trade from anarchy.

However, the principle of this Bill should be welcomed. Companies who experience short-term temporary difficulties should be given protection from parasitic sharp-practiced financial interests, many of whom are only looking for the slightest opportunity to move in on a company, close them down, strip their assets and make the workers redundant. In this instance, the workers and industrialists have a common interest against finance capital. Anything that protects such companies, their commercial activity and their jobs is welcome.

However, to what extent can Goodman avail of this legislation to continue trading? The Goodman operation is financially unsound. His debts are considerably greater than his assets. He is insolvent. It is also clear that the company need a further £200 million cash injection if farmers are to be paid and beef processed for the market. Protection from creditors will not create this cash.

The court, under this legislation, may find it has no option but to call in a receiver. While insolvent companies should not receive preferential treatment, the scenario I have outlined could defeat the purpose of this legislation which is to give breathing space to a company to allow them to be re-structured, thus saving jobs and output. If, at the end of the day, a receiver has to be called in, it would not be the public interest which would receive priority, but the interests of the creditors. This could have disastrous consequences for the beef industry.

What lessons can be drawn from this disastrous state of affairs? First, we must never again allow such a vital economic interest to be determined solely by one company or one individual. Never again should our economy be held hostage by private sector forces whose only concern is to maximise profit without regard to wider social interests. The Government should use public enterprise, equity arrangements, conditional grant-aiding, trade union participation, regulation and IDA monitoring — a number of measures — to ensure the private sector is held publicly accountable.

Secondly, they must consider legislation to give power to oversee controlled liquidation of enterprises of strategic national importance. For instance, if the Goodman empire went into receivership it could have a disastrous effect on the beef sector. Liquidation controlled by the Government could ensure, for example, that the meat processing industry of the Goodman empire is retained within the State and that jobs and output are maintained. Liquidation at the request of creditors could only take into acount their own interest, not the national interest or the interests of farmers.

Thirdly, the Government must introduce wide ranging legislation to force greater disclosure of corporate information. Goodman got away with so much because he was able to hide so much from the State, from the taxpayers, from his bankers and creditors. Fuller information is not only vital for the successful functioning of markets but it is necessary so that the State and private individuals can fully assess the risk of business and economic investment.

If the Government believe this legislation will somehow tide us over this crisis they should think again. The rot in the beef industry, this saga of deception, fraud, greed, incompetence and complacency, will stay with us for a long time to come. It is not too late to make a radical reappraisal of Government policy in the beef sector but they must not cod themselves into thinking that market forces will somehow magically right all wrongs. It is the same forces that have brought us here today and if we allow this to continue we will be back again very soon.

Mr. J. Bruton

Our party take no responsibility for the specific legislation that is being introduced here today. It is legislation which is drawn from a Companies Bill and of all 11 Parts of the Companies Bill, this Part, Part IX, has been most roundly condemned by the professionals involved in company law as being inadequately drafted and likely to lead to immense delays, to immense dispute where there should be compromise and to cause serious uncertainty as far as the credit rating of all companies is concerned, in so far as securities previously capable of being relied upon can no longer be relied upon. This Part is most subject to criticism of all the sections of the Companies Bill which have been going through the special committee.

The fact that such ill-prepared legislation should be rushed through in one day is something for which the Government owe us a serious explanation. They have not given a sufficiently frank or full explanation as to why it is necessary that this legislation be rushed through in these circumstances. It is not clear that this legislation is in any way capable of dealing with the problems of the Goodman Group which have received so much publicity.

Under this legislation the examiner has no funds to meet day-to-day expenses. To say that the largest beef processing company in this country could be run by an examiner who does not have any day-to-day funds at a time when the maximum amount of cattle have to be supplied, killed and paid for on the day is ludicrous. The Minister has given no indication whatever as to where the money will come from to fund the examiner's operation. If there is no money available to fund the examiner's operation in buying the beef, then this legislation is quite literally irrelevant to the position of the company. There is no justification for rushing it through this House on the basis implied that it would solve the problem when it is clear it cannot solve the problem because money has to be paid tomorrow for cattle to be supplied tomorrow.

If farmers are not certain that they will be paid they will not supply their cattle and if they do not supply their cattle to the 40 per cent of the capacity controlled by the Goodman Group, all the cattle will have to be supplied to the remaining processors. It is obvious that for the three week killing period of the entire beef processing year that the remaining residue, 60 per cent killing capacity, is not sufficient. Farmers will be faced with supplying an examiner in respect of whom they have no certainty that he will be able to pay them, or waiting in a long queue to get their cattle killed in another processing plant, for whose facilities the demand is far too great. I have not been convinced that this legislation, which has many other defects to which I will refer, will solve the problem and if it cannot solve the problem it should not be rushed through here today.

The Companies Bill being considered today could have the effect of preventing the natural growth of other Irish based companies on the international scene. One of the objectives of Irish industrial policy encouraged by the Telesis report has been to encourage the growth of Irish based companies on the international scene, strong Irish indigenous companies. If the Bill is passed unamended it may become much more difficult for other companies based in Ireland to borrow money internationally at favourable terms than it would be for other competitor companies in their sector based elsewhere to borrow money from the same banks. This will be particularly so for companies who wish to give security as the basis for getting money from those foreign banks. This legislation makes security given in return for loans markedly less valuable than it was in the past because securities can be set aside by direction of a court, without guidance from the Oireachtas, under this legislation.

The effect of this Bill will be in certain circumstances to set aside securities given for loans by Irish companies to banks here and overseas. This Bill allows secured creditors, who up to now could count on their security, to be overruled and have a compromise forced upon them. Under this Bill if a simple majority of any one class agree to a scheme of compromise, not a simple majority of all the creditors but a simple majority of any one class of creditors — perhaps a small class of unsecured creditors who are going to get nothing anyway under a normal liquidation — all the other classes of creditors who object to the compromise can have their rights set aside. One result of this will be that banks will simply be much less likely to lend money on the basis of security granted by Irish companies to other Irish companies who are carrying on their business in a normal way.

The people who will be paying for the crisis will be those who find that they will not be able to borrow money, or if they do borrow money will have to borrow it at higher interest rates, for one reason only — that they are Irish companies operating under this legislation under which securities can be set aside in a fashion that is not possible in any other country in Europe.

I have made inquiries about legislative provisions in other European countries in regard to similar schemes of arrangements where creditors' rights can be set aside and they are far more restrictive than anything proposed in today's Bill. Ireland and Luxembourg are the only countries in Europe which allow a simple majority of creditors to agree to the imposition of a scheme of arrangements on all the other creditors. In France there must be a two-thirds majority of the creditors, in Italy two-thirds majority, the Netherlands three-quarters, in Germany three-quarters, in the United Kingdom three-quarters, in Belgium two-thirds, while in Denmark 60 per cent of the creditors must agree to any imposition of a forced settlement. In Ireland all you need is a simple majority, not even of all the creditors but of one class of the creditors, and that can be imposed. The banks are watching this. Banks are lending large amounts of money to Irish companies at the moment. As soon as this legislation is passed, those banks will say, "Sorry, we must have a substantial risk premium on the interest rate you are paying us now to take account of the fact that you might decide to avail of this Companies (Amendment) Bill, 1990 and the security which we had been counting on up to now can no longer be counted upon." That means that ordinary Irish companies which are trading properly and effectively and doing their job right exporting may well have to pay higher interest rates which they do not deserve to pay, and which they ought not have to pay, simply and solely because of this rushed, ill-digested, ill-considered legislation.

This legislation is only being brought in by the Minister for Industry and Commerce, Deputy O'Malley, as window dressing to keep the Taoiseach, who is personally concerned about individuals who may otherwise be affected, happy. The Minister has dreamed this up so that, on the day, it may look as if it will solve the problem. He knows it will not solve the problem, probably, the Taoiseach now knows it will not solve the problem, but we have been called back to put this bad legislation through so that the Minister for Industry and Commerce can give the appearance to the Taoiseach that he is doing something about the problem.

I understand a majority of the people are not too unhappy to see banks suffering for their mistakes. Indeed, much could be said in favour of passing legislation such as this on a European scale to prevent banks taking too much in security, but it seems to be commercially ill-advised to pass legislation such as this in one small country in Europe which is competing with the rest where banks enjoy much greater protection. This is certainly something we should not do as a panic reaction to particular events for the sake of appearances in Cabinet.

There is another problem. This legislation will be applied to debts which were agreed to before it was passed, in other words, people who loaned money to companies under the Companies Act, 1963, may now find they cannot get their money back because it is subject to legislation passed since they granted the loans. Essentially, that is retrospective confiscation of their rights. A bank in giving a secured loan to a company acquires a property right. The Dáil is now saying to those who acquired a property right under one piece of legislation that under the new legislation we are introducing in one day that property right may be redeemed arbitrarily under circumstances which were changed after the event. I do not believe any bank would agree to that.

Introducing retroactive legislation of that kind will not do wonders for our credit rating. We may not like the fact that this country is proportionately one of the biggest debtors in Europe or we have to do so much business with banks on a day to day basis, but I wonder what effect it will have on the borrowing policies internationally of the Minister for Finance. If those banks can find in relation to money they have advanced to private Irish companies that the terms of the loan can be radically changed as far as the securities are concerned, will there not be a question mark in the back of their minds that if the heat is on, the Government may decide to apply a similar measure to money they had loaned to the Government?

Is it possible for example, that the ESB, who have borrowed substantial sums of money benefiting from State guarantees if they found they could not repay it, might decide to avail of the Companies Act, 1990? If that is the case, what would be the value of State guarantees? Could they be set aside?

It is quite clear from this Bill that it will be open to a court to set aside third party guarantees as part of a reconstruction of a company; in other words, not only is the company being protected but anybody who gave a guarantee to the company could have their guarantees set aside by the court if it so decides on criteria we have not been told. It is quite possible under this legislation that the court could decide to set aside a Government guarantee of the debts of the ESB as part of a scheme of arrangements sought by the ESB. I do not understand why there is any need to protect those who have given third party guarantees because they are not affected; they are not insolvent. Why should they be protected as well as the company under the legislation, and yet this legislation fights for that.

This legislation is not the same as Chapter XI in the United States legislation which makes provision for delays but where a creditors' committee is in control. In Ireland the position is entirely different. The people in control will be the courts acting under legislation which gives them no guidance as to how they should act. Nobody knows what affect this legislation will have, or in what way judges will interpret it. Prior to today, people knew what existing company law meant, what securities were worth and what compromises they might have to make but now we find there is no longer any certainty and it will all depend on whether Mr. Justice X or Mr. Justice Y hears your case. It is possible Mr. Justice X may be very sympathetic to the banks whereas Mr. Justice Y is sympathetic to creditors and you do not know which of them will hear the case. Therefore, anybody lending money to a company will need to know if the company are likely to avail of this Bill and, if so, which of the many judges in the High Court is more likely to be sympathetic to the creditors or to the banks.

We are pushing through legislation containing no criteria as to how it should be applied and we are creating uncertainty. The one thing business needs is certainty, and the Legislature should be trying to create certainty, within which business can operate. In this case it is clear no certainty is being created. I would like to know if the Government spent the last week instructing their diplomats in countries where there was a bank which had loaned money to the Goodman organisation, to get on to the people in the Department of Foreign Affairs and those in the banks in the country in question to tell them to go easy as the Government were going to sort this out. As a result, perhaps these people went easy but now they find that the situation is now far worse than it was last week. Were Irish diplomats used to assist a private company? Were representations made through the Department of Foreign Affairs to individual banks in foreign countries to protect this company? We must have that information.

Some say that some companies have been aware of this situation for the past two months but they did not act because of political representations from this Government. If so, what liabilities have the Government incurred as a result of any such representations? We have been told that Classic Meats have been claimed to be part of the assets of this organisation. If so, is this not contrary to the assurances given previously? In this House it has been alleged that a private company has been set up overseas to avoid the provisions of unlimited liability which were used in the first place to avoid having to file accounts. If this is the case, can the Minister give us an assurance that the powers he is taking, which are extensive, in section 8 are sufficient to ensure there will be full disclosure with regard to the truth or otherwise of the allegation made earlier in this House concerning that account?

I would like to make one other serious point. When I was Minister for Finance, I introduced section 52 of the Finance Act, 1986, the purpose of which was to ensure that a company could not claim a capital allowance to the full value of a machine if part of the cost of the machine was met by a grant; in other words, they could only claim a capital allowance for the money they put up themselves. They could not use taxpayers money provided by the IDA as a basis for claiming further relief, I think that was unexceptional common sense legislation, yet when Fianna Fáil took office, Deputy Reynolds, the new Minister for Finance, introduced section 25 of the Finance Act, 1987, which stated that food production companies would be exempt from that provision, in other words, they could double claim; they could claim a tax allowance in respect of money which had already been provided by the taxpayer. Why did he do this? Was that part of the Goodman deal which was agreed to with such aplomb by the Taoiseach and announced by him in December 1987? If so, given that the Goodman deal did not go ahead and that none of the commitments for processing facilities was fulfilled, was that section used by this organisation? Will we be given the information as to whether that section was used, to what extent it was used and whether it was used on the basis of any——

An Leas-Cheann Comhairle

Sorry Deputy Bruton, your time is almost up.

Mr. J. Bruton

I am far from finished.

An Leas-Cheann Comhairle

The Deputy's time is finished.

Mr. J. Bruton

Furthermore, I would like to know if the Government, or any Minister, gave any assurances to the Goodman organisation that it would be all right, that export credit would be used in respect of some meat that was not exclusively Irish meat. Did Government Ministers, prior to the revocation of the contract by the Minister, Deputy O'Malley, say that would be all right, or did they know for any length of time prior to the revocation of that contract that the cover might have been used for non-Irish meat? If they knew that, what case has the Government got to defend in regard to the allegation that they withdrew the export cover on the basis of information they already had, and which they pretended to have discovered for the first time? We need to have that information because we need to know what exactly are the liabilities of the State in the pending court case. If assurances were given, or if Ministers knew long before the Minister, Deputy O'Malley acted, that the credits were being used for that purpose then, the Government were an accomplice to the use of the credits in that way. We need to know that and we need to know to what extent and how the taxpayer is exposed.

An Leas-Cheann Comhairle

There are only eight minutes remaining. The Chair ordinarily likes on Second Stage to have the voice of the Independents. Accordingly, the Chair is calling Deputy Neil Blaney.

Mr. Sherlock

I do not agree with that since Deputy Stagg did not take his full time. I did not honestly know that Deputy Blaney was even a Member of this House. I intend to speak for five minutes because it is my right as a party spokesman on Agriculture to speak in this debate.

An Leas-Cheann Comhairle

Perhaps Deputy Sherlock could bear with me.

Mr. Sherlock

You stopped this debate, a Leas-Cheann Comhairle, but you will not make me sit down. I will take just half the time——

An Leas-Cheann Comhairle

If Deputy Blaney is agreeable — notwithstanding the Deputy's compliments to him — to sharing his time with you then he may do that.

Mr. Blaney

Depending on what time is left.

An Leas-Cheann Comhairle

Perhaps with the co-operation of the Minister the Deputy could arrange for a maximum of nine to ten minutes.

Mr. Blaney

If I can have ten minutes I would be quite happy.

An Leas-Cheann Comhairle

If the Deputy settles for five minutes we would save time and the balance could be given to Deputy Sherlock.

Mr. Quinn

Can we claim injury time?

An Leas-Cheann Comhairle

There will be five minutes for Deputy Blaney and the balance for Deputy Sherlock.

Mr. Blaney

Already Deputy Sherlock has got two minutes by his interruptions, so that leaves three minutes. May I say to Deputy Sherlock that his snide remarks do not bother me but his interrupted attendances and his interrupted election to this House is fair comment on what his constituents have thought about him over the years? The Deputy should compare the record.

May I say in the very short time available to me that having listened to so much vilification here today it is difficult to know what we are supposed to be discussing? The principle of what is before us seems to be headed in the right direction but there may be flaws in it because of its fast introduction. However, what we must be concerned about is saving the facilities provided by the Goodman operations in the interests of our country — our farmers, our workers and our economy. I do not know how that can be brought about but if this legislation gives a breathing space — I think that is all it will do — to find a solution to the dilemma and the disaster that the collapse of the Goodman structure would have on our farmers, our economy and our country, then anything that staves off such an eventuality and gives time and opportunity to find a way of salvaging the situation, must be applauded and supported by this House, even if it is attempted in inadequate time, in inadequate debate, in inadequate discussion and undermocratic procedures.

Goodman is longer in the meat business than most of the Members here are in this House — only I and a few other Members have been in politics longer than he is in his business. I hold no brief for Mr. Goodman. I have no personal association with Mr. Goodman but, over the years I have had knowledge of his operations on a small, modest and obviously efficient scale, otherwise he could not and would not have come to the surface. The only question I have been asking since he hit the big time is how was it done. We have heard the wisdom of those who, in retrospect, can find various reasons for charging him with various operations that were not laudatory.

I do not lend myself to those comments but I say that he has had a most bitter experience of a combination of circumstances, all of which have tended to bring about a situation that is bad not just for Goodman and his companies but for this country at a time when our cattle trade is already in regression, our sheep meat trade is in dire trouble, we are approaching the season of the biggest kill, the Gulf troubles are creating a big hole in our outlets and rightly or wrongly, the Minister who is here today is withholding up to £50 million that might well have been used to keep the show on the road and we would not be here today trying to salvage a company that is vitally important to us, regardless of how it was put together or how it is managed at present.

An Leas-Cheann Comhairle

Deputy Blaney, may I ask for your co-operation in respect of the five minutes? I am asking you to conclude.

Mr. Blaney

I am finishing. It is ironic that the Minister who seems to have had almost a vendetta approach to the Goodman organisation is now the man who appears to be saving it. However, that can be regarded in its own light; he is operating as part of a Government. It has not helped and it could not help any company internationally trading if it were known — as it was known — that a Minister in high places — and particularly the Minister for Industry and Commerce — was of the mind that the people running this company were not good operators.

An Leas-Cheann Comhairle

Sorry, I must now call Deputy Sherlock.

Mr. Blaney

Whatever may be the virtue of that, anything the Minister and this House can do to salvage the operations of the Goodman Group should be welcomed because without them we will be the poorer and it will be a disaster as far as our farming community, who are already on their knees, are concerned.

An Leas-Cheann Comhairle

Deputy Sherlock to conclude at 2.03 p.m.

Mr. Sherlock

The current threat to Ireland's beef trade posed by the difficulties of Goodman International illustrates the dangers of allowing a single, privately-owned company to establish such a dominant position in one of our most important industries. We fully acknowledge that the collapse of Goodman International would be an appalling blow not merely to farmers and those people directly employed by Goodman but also to thousands of workers in ancillary industries.

The Goodman organisation is a huge concern accounting for more than 40 per cent of total beef exports from this country; probably it accounts for between 4 per cent and 6 per cent of our gross national product. The Goodman Group have expanded at a rapid rate in recent years, acquiring several co-operatives and, along the way, gobbled up huge chunks of the food industry. When Mr. Goodman targeted the publicly-owned Irish Sugar Company for possible takeover in 1988 and 1989 my thoughts at that time were that the likelihood was that the only man who would own anything here would be Mr. Larry Goodman. We have noted that the Irish Sugar Company have consolidated their position while the difficulties of the Goodman Group have led to the Dáil being recalled to rescue that company. Any assistance provided by the Government, with the aim of aiding Goodman International, should be conditional on the company publishing fully audited accounts for recent years and on Mr. Goodman making available his personal assets in any rescue operation.

In order to alleviate the acute difficulties being experienced by our cattle farmers the immediate priority must be to secure alternative markets for our beef which, in normal circumstances, would be going to Iraq. The Ministers for Agriculture and Food and Industry and Commerce, along with CBF and Coras Tráchtála, should establish an emergency working group to seek alternative outlets for our beef in other parts of the world. Indeed, I wonder why Deputy Deasy, when Minister for Agriculture, did not endeavour to have our beef exported under a brand name. Had he done so we would not be encountering problems now with countries such as Iran and Egypt with our beef being sold abroad under an English brand name.

There is a number of lessons to be learned from the present crisis and which need to be addressed in the long-term. First, the Government should take appropriate steps to ensure that no single private company be allowed to secure or occupy such a dominant position in any one industry because when they run into difficulties major problems are created for our economy.

Mr. Blaney

A Leas-Cheann Comhairle, on a point of order, may I ask that the Deputy give us an indication of the document from which he is quoting?

An Leas-Cheann Comhairle

Deputy Sherlock has less than one minute remaining.

Mr. Blaney

The Deputy is obviously quoting or reading.

Proinsias De Rossa

He is reading from notes, which is common practice in the House.

Mr. J. Bruton

It happens every day. If the Deputy were here more often he might realise that.

Mr. Sherlock

Second, we should endeavour to ensure that our markets for exports of beef are spread world-wide so that any political or military crisis in any country or region will not endanger our overall industry. Finally, I suggest we seek greater diversification in Irish agriculture so that in future we are not so dependent on single commodities such as beef. I might add that four successive Ministers have failed to provide a proper agricultural export policy so that we would not have to depend on the seasonality of beef production, as is the case at present.

Minister for Industry and Commerce (Mr. O'Malley)

At the outset I should emphasise that this Bill is part of a longer one which has been going through this House for some time. As I mentioned earlier the entire Bill had almost been passed into law in this House, is now at Report Stage here and has been since the end of June. Certainly, it had been my fervent hope that that Bill, in its entirety, would have been passed before the summer recess. I had not expected that the committee who examined it so thoroughly would have taken such an extended period to do that. They undertook that task well but, unfortunately, took seven-and-a-half months, entailing 21 meetings of the committee, some of which were very lengthy. Indeed, it is worth recalling in regard to that committee that of the 11 separate Parts of the Bill, some of which were relatively short, this Part IX is the one that received least discussion.

Mr. J. Bruton

Three days discussion.

Mr. O'Malley

Between two and three hours discussion the record shows.

Mr. J. Bruton

The Minister would not know because he was not there.

Mr. O'Malley

The record shows between two and three hours.

Mr. J. Bruton

I have here the record of the discussions comprising three day's work. Again, the Minister has not got his facts right.

Mr. O'Malley

That Part took relatively little time for discussion purposes and fundamental objections were not raised to it. The debate that has taken place here today has concentrated largely on one company and on one person.

Mr. Quinn

Because there is an emergency.

Mr. O'Malley

Some people on hearing this for the first time might be forgiven for thinking that this legislation was something new, that it was dreamed up within the past number of days or within the past week.

Mr. Howlin

We are here under emergency summons.

Mr. O'Malley

Of course, that is not so. Had that Bill been passed, as people might have anticipated, before the summer recess then Part IX and its provisions would have been available to any company, including the one mentioned at some length today. In those circumstances it would have been regarded as unexceptional if they, or any other company, had sought to avail of its provisions. I have no idea whether or not the company mentioned at length today will avail of the provisions of this Bill if and when passed.

Mr. Quinn

Have they requested it?

Mr. O'Malley

Nor have I any idea whether, in any particular case, they can be successful. I was a little taken aback to hear some of the criticisms of the Bill being made on the basis that it harmed the interests of banks in some way or that it meant that secured creditors were placed in a slightly less advantageous position than they might have been without it. The alternative would have been not to bring forward — as was the case three years ago — legislation of this kind, to allow companies experiencing difficulties to go into receivership or liquidation. Members of the House who are now suddenly highly critical of the provisions of this Bill should contemplate the consequences of their suggestions. I would pose the question: do they want us to leave our law as it is so that the only step open to a company or their creditors — that is a company running into some difficulties or experiencing problems in paying their debts — is to appoint a receiver or go into liquidation? It has been identified for a very long time in Irish company law that one of its great weaknesses was that there was no intermediate step between normal trading, on the one hand, and receivership or liquidation, on the other, which effectively meant the demise of the company. Whatever the context I would have thought that legislation of this kind should be welcomed.

Deputy John Bruton made the point — and perhaps it was a little dangerous for him to have made it — that Irish companies would now experience difficulty in raising money from international banks because these provisions exist in Irish law. Far more difficult provisions — from the point of view of banks — exist in United States law and have been the case for a long time. Relatively similar provisions exist in British law and I have not heard that suggestion made in regard to banks or companies in Britain. It is a rather dangerous suggestion to make that in some way banks are put at a disadvantage in lending to Irish companies. It is much healthier that Irish companies have something akin to the rights of American and British companies, to take only two examples, to rescue themselves when they are in difficulties as, inevitably, some companies will from time to time, particularly when a major external event of the kind we have seen this month occurs. That is why the Government consider it appropriate that this legislation would be available now, instead of in a few months' time, to companies which may be facing problems arising from this major external event which, of course, we hope will not get any worse.

Deputy Bruton and a number of other Deputies made the point at some length that this Bill would not be any good unless funds were available to an examiner who might be appointed under it. Who, I wonder, does he envisage will supply these funds? I can only assume from the context of the remarks made in the House today that most Deputies who referred to this assumed that the Exchequer should provide the funds. If that is their feeling, I certainly dissent from that view——

Mr. J. Bruton

That is not what was suggested. We suggested that the Bill was unworkable in its present form.

Mr. O'Malley

In respect of private companies, the Exchequer should not be expected to put up sums of money because that is a road which has no end. So far as the ability of the examiner under the Bill to raise funds is concerned, it is certainly no worse than that of a receiver; in fact it is a great deal better. It is not suggested that a receiver cannot raise funds. We know the process of receivership and that receivers can negotiate with banks for funds to run the company in their own names. As I said, an examiner is certainly in no worse a position than a receiver, if anything, he is in a better position——

Mr. Quinn

He will have about 30 banks to choose from.

Mr. O'Malley

I am sure he can go to any bank in the world if he wants to and see where he can raise funds.

Mr. Spring

It would be an interesting conversation.

Mr. O'Malley

The provisions of section 10 of the Bill make it clear that if an examiner incurs liabilities during the protection period — the period while he is examiner — he can certify those liabilities as having been necessarily incurred for the benefit of the company if the company subsequently go into liquidation or receivership. Not alone then are the moneys raised by the examiner ordinary debts of the company, they are preferential because they will rank with the examiner's expenses and those of the liquidator. For that reason, I do not foresee examiners having any major problem in raising money to carry on the business of a company to which they may be appointed. One would assume, in any event, that the bankers of the company concerned would have approved of the proposal to petition for an examiner because it is very unlikely that, without their agreement and consent, such a petition would be successfully made in most cases. It would happen in some cases but, in most cases, as a number of Deputies mentioned, a degree of co-operation is needed between all concerned to try to ensure that the company survive and prosper.

A number of allegations were made in regard to things that happened in 1987 in respect of a particular company. It is not my function, as I have said on at least two previous occasions — perhaps three — to answer for what happened during a period when I did not hold office. In that context it was asked what the position would be if finance was raised under the provisions of section 84 of the Finance Act and subsequently used by the person raising it for purposes other than those envisaged in the section, and perhaps envisaged by the IDA and the Revenue. It was asked if efforts would be made to recover the money on the basis that it was used for purposes other than those envisaged. Of course that is not the way the section works but, if funds were raised under section 84 and used for purposes other than industrial investment in Ireland which would create employment as certified and recommended by the IDA, the bank will be penalised by losing the tax concession they would otherwise have got on the lending of those funds. The funds are not provided by the IDA or the State and it is a matter for the bank concerned to seek to recover the funds and any additional costs they incurred as a result of the disallowance by the Revenue of this lending under the provisions of section 84. There is no mystery about it, that is how it is and the State is not involved. As I said, it is recovered by the banks who loaned it in the normal way and I am sure they will do that in due course if they feel it appropriate.

Deputy Spring made the point that there was a defect in constitutional procedure in relation to this Bill. The matter has been rechecked with the Attorney General and, according to him, the point raised by Deputy Spring regarding the constitutional procedures and early signature by the President is not an issue. The involvement by the Council of State does not arise under the procedure being used under Article 25 of the Constitution.

Deputies Barrett and Connaughton asked about beef market prospects this autumn. I already dealt with that this morning in some detail but I will say a few further words in regard to it.

In so far as the beef industry is concerned the intention is to enable the orderly marketing of cattle during the critical autumnal peak slaughtering period when some 650,000 to 700,000 cattle will be slaughtered. My colleague, the Minister for Agriculture and Food is continuing his close contact with the Community Commissioner for Agriculture to ensure that the Community price support mechanisms are applied in such a way as to ensure a way as to sustain cattle prices to Irish farmers.

It is difficult in the present circumstances to see any considerable outlets on the market. This is due mainly to the reduction in the demand for beef in the Community, especially in the UK, the embargo on trade with Iraq and the more general difficulties in exporting to Iran and Egypt due to the BSE scare. In previous years over 200,000 cattle were exported after slaughter to the Middle East. On the assumption that these markets will not take any significant quantities of beef from this year's autumnal production, even if we succeed in having the Iranian and Egyptian markets reopened, the main outlet will have to be the European Community safety net intervention purchases. Since these are made at a fixed price they will sustain cattle prices to our farmers. It is the Government's intention to ensure that confidence is retained in the beef industry's ability to slaughter cattle this autumn in an orderly manner which also sustains cattle prices to farmers.

Mr. Quinn

Tell us about the legal action.

Mr. O'Malley

Deputy Connaughton also questioned whether the Bill would provide preferential status to farmers in the selling of cattle. That, of course, has to do with the winding-up question rather than with the questions we have here. What we are dealing with here today is a company which is not being wound-up or put into receivership: it is in contrast to that — we are putting forward a procedure which will enable companies to avoid receivership or winding-up. The Bill does not deal with liquidations. That is a matter which could be raised, as I understand it was, on the general Companies Bill which I hope to be back with as early as possible in the autumn for its Report and Final Stages.

Mr. Quinn

Has the Minister got notes on the £50 million legal action against his Department?

Mr. O'Malley

I do not have notes on it.

Mr. Quinn

Have a good look.

Mr. O'Malley

I do not think the legal action against me or my Department has a great deal to do with this Bill.

(Interruptions.)

Mr. O'Malley

The action against me is proceeding at the sort of pace these actions usually seem to proceed at.

Mr. Rabbitte

It looks as if the Minister is going to survive.

Mr. O'Malley

After a delay of about six months from the issue of the writ, the plaintiff filed his statement of claim and about six or eight weeks later I filed my defence in which I denied the plaintiff's allegations. So far as I am aware no further steps have been taken since.

Mr. Noonan

(Limerick East): Which side is calling the Minister for Finance as a witness?

Mr. Rabbitte

What is the Minister's position on the £300 million rescue plan?

An Leas-Cheann Comhairle

We will have Committee Stage after 3 p.m. Perhaps the Minister should be less courteous in the matter of interruptions.

Mr. O'Malley

I shall try to obey your enjoinder to be less courteous.

Mr. Spring

He is standing on enough eggs.

Mr. O'Malley

A great deal of detailed questions were asked about specific sections, particular words, etc., in the Bill. I think it is better if I do not try to deal with those now but leave them to Committee Stage. We will have a relatively long Committee Stage — seven hours — and it should be possible to deal with most of this Bill during that time. I will answer the detailed questions on the sections, particular wording and so on at that time.

Deputy Barrett made the case — I must say I have some sympathy with the point he is making — that this procedure can be very expensive for small companies. I believe it will be too expensive for very small companies but unfortunately it is necessary at the moment to have these sort of applications made in the High Court. I am looking at the possibility of having them made in the Circuit Court but that is not altogether satisfactory particularly during vacation periods which are quite lengthy.

I am conscious, from looking at the Bill as a whole, that the number of potential references to the word "court" is rather higher than I would like it to be and I will see if we can devise a means whereby we can cut out some of the less necessary references to the word "court" in order to reduce the cost. There is no question of these references to the court causing delay because the whole thing has to end within a maximum of four months and one cannot have the kind of delay one has, for example, in the United States. While on the one hand criticism is made of all these references to the court, on the other hand the very fairness and independence of the system proposed in this Bill is underlined by these constant references to the court. It will not be possible, for example, for a company to bully their way through a period of protection under this Bill and get their way by sheer force or by influencing the examiner. Everything in the last resort will have to be approved by the court. Therefore, I am not anxious to remove the court from too many steps. It is one of these balances which has to be struck and sought to be maintained.

I think I have dealt with many of the more general points which have been made. I will leave the other points to the Committee Stage. I understand 39 Opposition amendments have been put down to the Bill. Because the Bill incorporates all the amendments made at the Special Committee and because I have a very small staff who will have to try to consider these amendments can I suggest to the House that instead of an interval until 3 p.m. we adjourn until 3.30 p.m.?

Mr. J. Bruton

Can we have an extra half hour at the end of the debate?

Mr. O'Malley

No, I think that by 10 p.m. we will have had enough of this.

Mr. Quinn

The Minister might have had enough.

Mr. J. Bruton

To be quite honest I think we should be sitting until midnight so that every point is properly considered.

Mr. Spring

On a point of order, obviously the Minister has difficulties in relation to staff who can deal with the amendments but I already asked to leave the debate open-ended this evening. We could agree to the hour for lunch to help the Minister get his staff organised of the next Stage of the debate was open-ended or at least give us an extra half hour at the other end. We cannot take a shorter debate.

Proinsias De Rossa

We have no objections to the extra half hour sos in order to enable the Minister to have the amendments considered but in view of that consideration the Minister should also agree to sit until 10.30 p.m. If we finish before then well and good but we should have the option of sitting the extra half hour.

Mr. S. Barrett

The Minister may have difficulties but I should like to remind him that the Opposition who do not have any staff to back them up only got a draft of the Bill last night, only got the Bill this morning and the briefing documents at 10.20 a.m. I understand that the Leaders of the parties agreed yesterday on a time schedule. If the staff need another half hour I have no objections to agreeing to it but we should sit until 10.30 p.m.

Mr. O'Malley

Obviously I regret having made the suggestion. I have only one official who is a specialist in company law because the others are on holidays and are not available. Unlike the Opposition, unfortunately, I have to try to be right.

Mr. Spring

The Minister is not doing very well so far.

Mr. J. Bruton

I would put the emphasis on the word "trying."

Mr. Rabbitte

That is what Larry Goodman used to say.

Mr. O'Malley

I will agree in the circumstances to sit from 3.30 p.m. until 10.30 p.m.

An Leas-Cheann Comhairle

In view of the fact that we are taking half an hour away from the agreed time the Minister might reconsider his initial proposition and agree that we extend the sitting by half an hour until 10.30 p.m.

Mr. O'Malley

I have agreed to that.

An Leas-Cheann Comhairle

Does the House agree to a one hour sos and to conclude at 10.30 p.m.? Agreed

Question, "That the Bill be now read a Second Time" put and agreed to.

Sitting suspended at 2.30 p.m. and resumed at 3.30 p.m.