Written Answers. - Company Law.
Bernard J. Durkan
Question:
31
Mr. Durkan
asked the
Minister for Industry and Commerce
if he has satisfied himself that company law, as at present constituted in this country, is sufficient to protect the common good and the national interest with particular reference to the use of off-shore companies by the executives/directors of State or semi-State bodies; if he is in a position to monitor sufficiently dealings taking place or likely to take place between such off-shore companies and the parent bodies; and if he will make a statement on the matter.
Pat Rabbitte
Question:
38
Mr. Rabbitte
asked the
Minister for Industry and Commerce
if he intends any amendments to company law with a view to stamping out abuses and ensuring proper accountability by all companies, both in the State and the private sector, and in particular to oblige all individuals and companies in this country to disclose any interest in off-shore companies which are located in places like Jersey and the Isle of Man to exploit the more lax company law and tax systems operating in those jurisdictions; and if he will make a statement on the matter.
I propose to take Questions Nos. 31 and 38 together.
With the enactment of the Companies Act, 1990, I am satisfied that the Companies Acts, 1963 to 1990, contain satisfactory provisions against malpractice and ensure proper accountability in the operation of limited liability companies in Ireland.
In so far as the involvement by individuals with off-shore companies is concerned, directors of companies are now required under section 195 (2) (f) of the Companies Act, 1963 (as substituted by section 51 of the Companies Act, 1990), to register particulars of any other directorships of bodies corporate held by them, whether those bodies are incorporated in the State or elsewhere.
Moreover, section 194 of the Companies Act, 1963 obliges directors who are interested in a proposed contract with their company to disclose this fact at a meeting of the directors of the company. This would include the fact that a director is a member of another company or firm with which the first company proposes to enter into a contract.
Section 158 of the Companies Act, 1963 and section 16 of the Companies (Amendment) Act, 1986 also provide for disclosure by companies of details of bodies corporate in which they have a shareholding of a certain size. These disclosure requirements apply irrespective of where the other body corporate is incorporated. Depending on the type of company involved, the information will be disclosed in the directors' annual report to the shareholders or in the notes to the annual accounts or a separate statement annexed to the annual return.
I consider that these provisions require as much information in relation to disclosure by directors and companies of their interests in, and dealing with, off-shore companies as it is appropriate to require in company law, and I do not propose to introduce any amendments to company law in this matter. These provisions apply to State bodies which are registered as companies under the Companies Acts and to their directors. For those State bodies which are not so registered, however, I have to point out that Company Law is not the medium of regulation of their activities. Their regulation is catered for within the context of the provisions establishing them and is a matter for each sponsoring Minister.
As for concerns regarding monitoring of any dealing between State bodies and off-shore companies in which the executives or directors of State bodies have an interest I feel that these are best dealt with by the guidelines, announced in March by the Minister for Finance, which express the underlying principles that should govern relationships between Departments of State and the State bodies under their aegis. The guidelines relate equally to subsidiary and associated entities of State bodies.
