Vol. 500 No. 4
26 Mrs. Owen asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will give an update report on the 13 inquiries currently being conducted by her Department; the final reports, if any, she has received; when she received the interim reports; the actions, if any, she has taken on foot of reports received; the costs expended to date and budgeted for on all these reports; and if she will make a statement on the matter. [4297/99]
Five of the 13 investigations have been completed. Two of the five investigations concerned National Irish Bank Financial Services Limited and Irish Life plc and dealt with insurance-related matters. The interim report last June of the authorised officer appointed to NIBFSL led to the appointment by the High Court at my request of inspectors to the company. The Irish Life report was published last week at a cost of £3,200. The only other cost to my Department of these inquiries has been the normal salary costs of the staff involved.
The report of the inquiry into Bula Resources (Holdings) plc was published in July 1998. Copies of this report were immediately forwarded to Bula, Ovoca Resources plc, the Irish Stock Exchange, the Director of Public Prosecutions, the Department of Finance, the Central Bank, the UK's Department of Trade and Industry and the Financial Services Department in Jersey. The cost of this inquiry was approximately £201,000.
The investigations into Garuda Limited and Faxhill Homes Limited were concluded in December last and extracts from the reports have been sent to various parties for their comments. I will take decisions on these reports in the coming weeks. The cost of the Garuda investigation which was done by my Department has been about £3,000, excluding normal salary costs. The Faxhill investigation which has been undertaken by an external accountant has cost about £87,000.
The remaining eight investigations are all ongoing and the cost to date has been about £12,000, excluding departmental salary costs. I received two interim reports on Celtic Helicopters Limited in September 1997 and January 1998. The latter report caused me to commence the investigations into Ansbacher (Cayman) Limited, Guinness & Mahon (Ireland) Limited, Hamilton Ross Company Limited and Irish Intercontinental Bank Limited.
In June last, I received two interim reports on Irish Intercontinental Bank Limited and Guinness & Mahon (Ireland) Limited which led to my deciding to investigate Kentford Securities Limited, Dunnes Stores Ireland Company and Dunnes Stores (ILAC Centre) Limited. The latter two investigations are subject to additional judicial review proceedings. Today I received a further interim report on Guinness & Mahon (Ireland) Limited to which I will give attention shortly.
The outturns for company investigations in my Department in 1997 and 1998 were £28,664 and £240,000, respectively, as against the estimates of £30,000 and £350,000, respectively. The 1999 estimate for company investigations is £245,000.
It is difficult to follow the Minister's labyrinthine mixture of reports. Will we ever see the results of these inquires? Will the reports be made public? The only report that has been made public relates to Irish Life and churning. Is the Minister surprised that more than 12 months after the inquiries started in January 1998, there is still no finality in any of the reports?
Will the Minister confirm that the investigation into National Irish Bank shows the amount of overcharging was approximately £140,000? Is this the correct figure? How many inspectors were involved in that part of the inquiry? What was the cost of that part of the inquiry? Was it more than the amount of overcharging identified? Will the Minister outline whether there is any truth in the rumour that the insurance scam operated by National Irish Bank may have involved 30 to 40 people selling those products? When does she hope to have finality regarding that report?
The first investigation began after the publication of the McCracken report. As the Deputy is aware, that report drew attention to serious lapses in corporate governance. On foot of the report, I began an investigation into Celtic Helicopters and Garuda Limited. It was on foot of the investigation into Celtic Helicopters that several other inquires commenced. I wish these inquiries could have been brought to a conclusion earlier. However, I assure the Deputy that is not for the want of effort on the part of the officers involved. The delay is due to litigation and several difficulties. As the Deputy is probably aware, matters have been before the courts on many occasions.
I am determined that action will be taken on foot of the reports. For example, the Bula report was sent to the Director of Public Prosecutions and the Department of Finance. I mentioned the other parties which received a copy of it.
I cannot confirm the Deputy's comments about National Irish Bank because that investigation is still under way. It is before the High Court and the legal proceedings which delayed that investigation for a considerable length of time concluded only recently. The inspectors are now free to continue their inquiries. I cannot confirm the Deputy's comments. I do not know from where she got her information. Perhaps it relates to the company's internal examination, but I am not aware of those details and the inspectors did not report that to the court. Although I sought their appointment, they are now officers of the court and will report to it.
My concern about this area is the reason a company law enforcement group was established some time ago under the chairmanship of Mr. Michael McDowell, SC. That group has just reported and I hope to bring its recommendations to the Government shortly and to publish its findings and recommendations. I am concerned that we do not have in place appropriate mechanisms with regard to the enforcement of company law.
I accept an unprecedented number of inquiries have been initiated. However, the Deputy will appreciate that all the inquiries were launched only after careful consideration. I did not lightly authorise any officer to carry out an inquiry without careful consideration. It was only after serious matters were brought to my attention that I initiated those investigations and I hope many of them will be brought to a conclusion shortly. As I said, I received a report this morning in relation to Guinness & Mahon. I have not had an opportunity to read this long report. I hope to do so later today and to consider it fully as quickly as possible.
Will the Minister confirm that the contents of the report on Celtic Helicopters which she received matches the information emerging at the Moriarty tribunal? When will the report on Celtic Helicopters prepared by her Department be published?
I cannot confirm any matter in that regard because I am precluded, under the Companies Act, 1990, from disclosing to any party, other than those affected, information which comes into my possession. I am also precluded from publishing a report prepared under section 19. This is one of the main difficulties in this area. The Minister's capacity to bring matters into the public arena when reports have been concluded is rather limited. However, I confirm that the Celtic Helicopters inquiry is proceeding and I understand it will be brought to a conclusion very soon.
27 Mr. Rabbitte asked the Tánaiste and Minister for Enterprise, Trade and Employment the nature of her concerns in relation to details being uncovered by a number of inquiries being carried out under the aegis of her Department regarding the activities of certain key individuals as outlined by her in an interview with a newspaper (details supplied) of 31 December 1998; when she will put these names into the public arena; and if she will make a statement on the matter. [4131/99]
I am concerned that appropriate standards of corporate governance and behaviour have not been present in a number of the companies being investigated. Apparent breaches of company law and other legislation caused me to commence a number of these investigations in the first place. When I have received and fully considered all the reports concerned, I will take whatever steps I can to ensure appropriate enforcement action follows. I am determined to use all the powers available to me to expose wrongdoing.
Some of these investigations involve the examination of company books and documents under section 19 of the Companies Act, 1990. I am precluded by section 21 of this Act from disclosing or publishing information relating to specific investigations, except in very restricted circumstances. However, I am permitted by the Act to bring matters to the attention of certain appropriate authorities. Such authorities include the Director of Public Prosecutions, the Minister for Finance, the Central Bank and any court of competent jurisdiction. In appropriate circumstances, I, as Minister for Enterprise, Trade and Employment, can initiate proceedings.
My question refers to the front page of the Irish Independent on 31 December 1998 which carried the headline, “Exposed. a golden circle of swindlers”. The Tánaiste and Minister for Enterprise, Trade and Employment has on a number of occasions, including in that story, been quoted as expressing the most grave concern about what she called a small coterie of business people in Irish life. The statement she made clearly indicates that whatever she knows is enough to cause the hair on the back of her neck to stand up. I can well understand that, but will she tell the House when she intends to share these dreadful secrets with the rest of us? She is tantalisingly drawing a veil across this, mentioning en passant to Deputy Owen that inquiries under sections 19 or 21 may not be published by the Minister. How does she intend to mediate into the public domain the terrible secrets that oppress her?
The third secret of Fatima.
If Deputy Rabbitte was in any doubt about what I said a number of weeks ago, events that have happened in the last few weeks should leave him in no doubt that there was a golden circle in this country that had considerable influence.
I agree.
The laws of the country did not seem to matter to them and they felt they could ignore corporate governance. Incorporation bestows huge privileges upon individuals, but attached to those privileges are enormous responsibilities to ensure the law is upheld. It is important so that all stakeholders in a company's interests are protected, including creditors and shareholders. Under the Act, the Minister is precluded from making public the results of such inquiries, as Deputy Rabbitte was in relation to inquiries he initiated. It is a defect because a Minister is acting in the public interest and when matters come to the Minister's attention it is right that they should be brought into the public arena. The only vehicle the Minister has to do that is by opting for a section 8 inspection, but such an inspection can be justified only if the circumstances are such as to suggest we should go down that route. It is extremely expensive, as we know in the case of National Irish Bank. That route may well be necessary in relation to some of these investigations because one of the other drawbacks of the section 19 procedure is that third parties cannot be interviewed or spoken to. On very many occasions it is necessary for the authorised officer, to be able to confirm or substan tiate what is being told to him or her by the affected party, to have access to other parties. That is another drawback of the legislation.
A number of inquiries have taken place because key principals in certain companies involved in certain activities seemed to feel they could ignore company law and that corporate governance was not for them. I strongly believe it is in the interests of the economic well being of the country, and in the interests of equity and justice, that the laws are vigorously enforced. That is one of the reasons we established the committee to examine company law enforcement. It has made some outstanding recommendations which, I hope, the Government will decide to implement shortly when the matter comes before it.
I did not write the newspaper headlines but I can assure the Deputy that one investigation led to another. We started with two and have ended up with ten in relation to these matters. They were all commenced because of serious matters that were brought to our attention that required investigation. I hope the appropriate authorities will take action. In the case of Bula, it was passed on to the company, the Stock Exchange, the Director of Public Prosecutions and the Revenue Commissioners. The interim report on National Irish Bank, which led to the application to appoint an inspector, has been brought to the attention of the Revenue Commissioners. I presume those bodies are acting on foot of that report. Very useful work has already been done and I hope other useful work can be commenced shortly.
I agree with everything the Minister has said, but can we focus for a moment on the Ansbacher cesspool? Will she say a word to the House about the expectation she has raised that the discoveries will be released into the public domain at some stage? I appreciate the difficulties she is having with the legislation. However, whether the headlines reflect it accurately, she has raised the expectation that these findings – which, I presume, include breaches of company law, tax evasion and God knows what else – will at some stage come into the public domain. The Minister has a responsibility to tell the House whether she has thought out that matter. Are there some matters that caused her to say she does not know what is coming down the tracks towards her, the Government, the Parliament or the country? Are matters in this area coming down the tracks at us or are there other, as yet unspecified, matters that are coming down the track?
Has the Minister designated the Moriarty tribunal as a competent authority under the Act? Will she furnish these documents to the Moriarty tribunal so it may use them, not just in reaching conclusions but that they might be adduced in evidence before the tribunal? Has the Minister taken legal advice on that matter?
In relation to the Deputy's last point, my Department has co-operated and is co-operating with both tribunals of inquiry which have had occasion to come and talk to officers of the Department on matters on which they sought clarification. That will continue to be the case. In relation to giving the reports to the Moriarty tribunal, one can give a section 19 report to only what is called a court of competent jurisdiction. As I understand it, a tribunal does not fall into that category. If, however, the tribunal were to seek information from an officer in my Department or from me, of course it would be forthcoming.
Can the Minister give them information out of the reports?
One can give them information—
Deputy Owen cannot intervene on this question as it is a Priority Question.
Is it not true that the Minister can designate the tribunal as a competent authority, like the Director of Public Prosecutions or the Revenue Commissioners?
I have made inquiries on that matter and I understand that I cannot. I can revert to the Deputy. It is some time since a query of that kind was put to me. One can give to any tribunal – as every Deputy has an obligation to do, particularly every Minister – knowledge that comes to one's attention in whatever capacity. However, one cannot pass over a report or designate the Moriarty tribunal, as I understand it, as a court of competent jurisdiction.
I suppose public expectations have been raised because when one is asked if the matters being investigated are serious and if the investigations are warranted, the answer is "yes, very much so". The extent to which company law was breached – or apparently breached, because until we get final reports one cannot be certain – is very surprising. As I said earlier, it seems a few key principals involved in the operation of companies went to extraordinary lengths to avoid their responsibilities to themselves, their shareholders, the tax authorities and others.
It is important that professionals who have to deal with companies, particularly accountants, also understand their responsibilities when auditing accounts. As the Deputy knows, the Institute of Chartered Accountants is carrying out its own inquiry and, now that the legal obstacles have been removed, I look forward to that inquiry being concluded as quickly as possible.
In regard to whether I have thought out how it can get into the public arena, under the present Act, it cannot get into the public arena—
Except under section 11.
—except under a section 8 inspectorate, in which case the inspectors would report to the court and that obviously would be a public document. Some matters have entered the public arena through affidavits I have signed in relation to the proceedings that have already taken place. The Deputy is obviously aware of that.
There are other proceedings next week, when we will be in court again in relation to Dunne Stores (Ireland) Limited and Dunne Stores (Ilac Centre). I hope these matters can be brought to a conclusion as quickly as possible. The important thing is that action is taken and that, once and for all, we can put these matters behind us.
Are these the matters that are coming down the tracks at us?
Many matters have come down the tracks at all of us.
They would fill a train at this stage, a very long one.
It is good advice not to stand on the tracks.
