Ceisteanna—Questions. Oral Answers. - Consultancy Firms Operation.

Mary O'Rourke


6 Mrs. O'Rourke asked the Minister for Enterprise and Employment the action, if any, he proposes to take following reports that a second rates consultancy firm may be operating a scam in Dublin; and the necessary changes, if any, he has identified in company law as a consequence of the discovery of these operators. [13733/96]

Desmond J. O'Malley


48 Mr. O'Malley asked the Minister for Enterprise and Employment the steps, if any, he proposes to take to regulate rates appeal companies. [13662/96]

I propose to take Questions Nos. 6 and 48 together.

I take it that the Deputies are referring to Oldfields and Co. (Ireland) Ltd. and Fitzwilliam Rating Consultants (Ireland) Ltd. The activities of these companies should properly be considered in the context of contracts entered into by business for the supply of a service. They are therefore governed by the law of contract.

Business organisations constantly argue for less involvement by Government in the affairs of business. Accordingly, I do not believe that they would welcome my involvement in the detailed discussion and negotiation leading to the finalisation of the multitude of agreements entered into by business on a daily basis. There is also the practicality of State involvement, including the allocation of resources, in this area.

I very much regret the losses suffered by individual companies and I consider this an appropriate time to place on record the need for companies to exercise due caution when approached in such instances. This is clearly a case forcaveat emptor on the part of the business community.

If business people believe they have been the subject of fraud, they should pursue the matter with the Garda Síochána. The Law Reform Commission and the Government advisory committee on fraud have highlighted the need for improvement in the relevant legislation and I understand that the Minister for Justice will be bringing a Bill to Government later this year in line with their recommendations. In the meantime additional staff resources, including a professional accountant, have been assigned to the recently established Garda national bureau of fraud investigation. Perhaps it would be instructive to put on the record of the House the following summary of the report of the advisory committee on fraud:

Fraud is by its nature, a peculiarly secretive crime. This is sometimes compounded by an unwillingness on the part of victims of fraud to report the matter to the Garda Síochána. Institutions which are defrauded may, with a view to their interest which we feel is misguided and purely shortterm, feel it is better to suffer a loss in silence than to invite public attention to a failure of security, with a perceived risk not merely of embarrassment but also of loss of investor confidence and added encouragement to other fraudsters.

From what I have already said, it is clear that I do not regard this as a company law matter. Consequently, I do not intend to make any amendments to company law to regulate activities of such companies.

I take it from his reply that the Minister is not interested in dealing with this issue through company law. Some of these companies are proffering an illusion of rates remission and vast sums of gold from Europe. Coincidentally, this morning I received documentation from and spoke on the phone to a person who was approached by the firm referred to in a report in today'sIrish Independent. This firm promised the person to whom I spoke that it would open the doors to Europe and secure vast sums of gold if he paid it money. There is a loophole in company law. The company brought to my attention this morning and Oatfields operated in the UK where they also hoodwinked gullible people. However, they decided there were fresh fields in Ireland which could be tapped and set up here. The Minister of State should not try to tell me there is not a phoenix-like syndrome where firms close and rise again——

The Deputy's question is overlong.

This is what happened in both of the cases to which I referred.

The question at issue is not a phoenix-like syndrome or my lack of interest in the company law aspect. Rather I am saying that in my considered judgment it is not a matter proper to company law but arguably a matter proper to criminal law. I said that, similar to the legislation in place in other jurisdictions, the Minister for Justice will introduce a Bill on all the different aspects of deception and dishonesty to Government by the end of the year.

People in business should beware of such firms and have enough wit to examine any promises of gold from Europe. Conmen who offer a service on these terms are suspect and the principle ofcaveat emptor applies. I am satisfied from discussions with the Minister for Justice that the Bill she will bring forward will provide adequate protection, if that is not there at present.

The adagecaveat emptor sounds grand but the brochure advertising access to EU moneys has been put together professionally and contains all the relevant wording, symbols, addresses and telephone numbers. A person presented with this brochure by a smart salesman would think there was something in it for him. It is easy for us to pontificate about how one should not be fooled into going down that path but a small business person hard pressed for money and burdened with bureaucracy could fall for this scam. Given the complexity of life and the level of bureaucracy, people are grateful for any help they receive in securing grants, etc. People should be extremely cautious about plans and ideas put to them by a company which is not known to be reputable.

I am advised that the second company to which the Deputy referred is no longer trading and that the first company did not break any law. There was a standard contract for the service they offered and, in so far as the fraud squad can establish, there was no breach of law involved. It is a matter of prudent caution by small businesses. If the rumours about another company offering gold from Europe are correct people ought to be warned to keep their eyes opened. Gold from Europe does not arrive that easily and the Government has taken good care to produce information and make it available to small companies and others. For example, the Minister of State at the Department of Foreign Affairs, Deputy Mitchell, recently produced an elaborate publication in terms of the comprehensive nature of its information. That is a more reliable source of information than promises of gold from Europe.