Written Answers. - Departmental Investigations.
Michael Creed
Question:
99
Mr. Creed
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
when she expects to receive reports about ongoing investigations in her Department under Section 19 of the Companies Act, 1990; and if the content of these reports will be published.
[28628/01]
Jim O'Keeffe
Question:
107
Mr. J. O'Keeffe
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
the position regarding the Ansbacher accounts; if and when she will be in a position to conclude the matter and to publish a report thereon.
[28755/01]
Brian O'Shea
Question:
112
Mr. O'Shea
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
the position regarding each of the inquiries being carried out by or on behalf of her Department; the projected date for the conclusion of each investigation; the inquiries in respect of which reports have been referred to the Director of Public Prosecutions; and if she will make a statement on the matter.
[28649/01]
Jan O'Sullivan
Question:
117
Ms O'Sullivan
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
the costs incurred by the State, at the latest date for which figures are available, arising from the various inquiries instigated by or on behalf of her Department; the element of these costs which have been recovered from other parties involved; and if she will make a statement on the matter.
[28650/01]
John Gormley
Question:
138
Mr. Gormley
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
when the inspector's report in relation to the Ansbacher accounts will be completed; and if she will make a statement on the matter.
[28797/01]
I propose to take Questions Nos. 99, 107, 112, 117 and 138 together.
Five examinations of company books and documents are ongoing by an authorised officer appointed by me under section 19 of the Companies Act, 1990.
Under section 19, I am empowered to undertake an examination of a company's books and documents where I am of the opinion that there are circumstances suggesting that it is necessary to examine the books and documents with a view to determining whether an inspector should be appointed to conduct an investigation of the company, or where any actual or proposed act or omission of, or on behalf of, the company is unlawful, or for a number of related reasons.
The companies under examination are Celtic Helicopters Limited, College Trustees Limited, Guinness & Mahon (Ireland) Limited, Hamilton Ross Company Limited and Kentford Securities Limited.
The examinations of Celtic Helicopters Limited and Kentford Securities Limited are well advanced. I expect to receive the reports on these two companies before the end of this year. I expect to receive reports on the remaining three companies in the first half of 2002.
The Companies Acts specifically provide that I may not publish the results of investigations without the prior consent in writing of the body which has been subject to examination under section 19.
Section 21 of the Companies Act, 1990, sets out the circumstances in which the information obtained under section 19 may be disclosed. For example, the information may be disclosed where this is necessary for further investigation or for the purposes of a prosecution, for the purpose of taking action to disqualify a person from acting as an officer of a company, for assessing a person's tax liability, in order to assist a tribunal of inquiry or where the information would assist the work of certain specified competent authorities.
Section 8 of the Companies Act, 1990, provides that the High Court may appoint an inspector to investigate the affairs of a company on the application of the Minister for Enterprise, Trade and Employment if the Court is satisfied that there are,inter alia, circumstances suggesting fraud or unlawful activity.
Three investigations are ongoing under section 8 of the Companies Act, 1990. The companies involved are National Irish Bank Limited, National Irish Bank Financial Services Limited and Ansbacher (Cayman) Limited.
Following receipt in June 1999 of the report of the authorised officer appointed by me under section 19 of the Companies Act, 1990, to examine the books of Ansbacher (Cayman) Limited, I petitioned the High Court for the appointment of inspectors to that company under section 8 of the 1990 Act. The petition, which was heard on 22 September 1999, resulted in the appointment initially of three High Court inspectors to investigate and report on the affairs of the company. There are four inspectors undertaking the investigation.
I understand that the inspectors appointed to both Ansbacher and the NIB companies are likely to report to the High Court either towards the end of this year or early next year.
The disposition of reports prepared by inspectors appointed by the High Court is a matter for the Court. I earnestly hope that the High Court will order publication of the reports in due course.
Four inquiries under section 19 of the Companies Act, 1990, undertaken by authorised officers appointed by me, have been completed to date. The companies concerned were Garuda Limited, the report on which was referred to the Director of Public Prosecutions in June 1999; Ansbacher (Cayman) Limited, the report on which led to the appointment of inspectors by the High Court; IIB – Irish Intercontinental Bank Limited, the report on which was referred to the High Court inspectors investigating Ansbacher (Cayman) Limited; and Faxhill Homes Limited.
In the case of Faxhill Homes Limited, summary prosecutions were instituted by me against the company and against its directors and auditor. The company and its directors were convicted in May this year of a number of breaches of the Companies Acts. The company was fined £450, 570, with one director fined £250, 317, and the second director being given the benefit of the Probation Act. Costs of £10,000, 12,700, were awarded to the State. In October last, the company's auditor was convicted of three offences and fined £600, 760, with £1,500, 1,900, costs awarded to the State.
An investigation was undertaken into Bula Resources (Holdings) plc under section 14 of the Companies Act, 1990. The report was published in July 1998 and was also referred to the Director of Public Prosecutions and to the Criminal Asses Bureau.
An investigation was undertaken under section 59 of the Insurance Act, 1989, into National Irish Bank Financial Services Limited. The report on this was referred to the High Court inspectors investigating the affairs of that company.
The costs incurred since 1997 on company investigations initiated by or on behalf of my Department amount to £6.264 million, 7.954 million. This amount does not include the salary costs of Civil Service staff working on a number of these investigations. Similarly, the major proportion of the legal costs relating to the investigations is being borne by the Vote of the Chief State Solicitor.
Most of this £6.264 million, 7.954 million, derives from the costs to date of the High Court inspectors appointed under section 8 – £3.385 million, 4.298 million, in respect of the investigations into the two NIB companies and £1.9 million, 2.4 million, in respect of the investigation into Ansbacher (Cayman) Limited.
Of the balance, the principal areas of expenditure arose in respect of the investigations of Bula Resources (Holdings) plc – £204,000, 259,000, Faxhill Homes Limited – £180,000, 228,553, Irish Intercontinental Bank Limited – £128,000, 162,526, Dunnes Stores Ireland Company and Dunnes Stores (Ilac Centre) Limited – £239,000, 303,467, and £170,000, 215,855, in respect of the State's portion of the costs of liquidating the group of companies associated with the Clonmannon retirement village.
The question of recovering costs from the section 8 investigations does not arise until such time as the inspectors have completed their investigations.
Under section 13 of the Companies Act, 1990, the High Court may direct that a person convicted on indictment for an offence prosecuted as a result of the investigation or ordered to pay damages may be required to repay some or all of the costs of the investigation. Furthermore, companies dealt with in an inspector's report may be required to defray up to £100,000, 127,000, of the cost of the investigation. This amount is being increased to £250,000, 317,435, under the Company Law Enforcement Act, 2001.
There is no provision at present for the recoupment of costs in respect of section 19 investigations. This is being amended under the Company Law Enforcement Act, 2001, which provides that the court may, on the application of the Director of Corporate Enforcement, direct that a company subject to examination under section 19 may be liable, to such extent as the court may direct, to repay the director the expenses of and incidental to the examination.
It is normal practice where a company is being prosecuted for a breach of the Companies Acts to seek the recovery of costs. In the case of Faxhill mentioned previously, costs of £11,500, 14,602, were awarded to the State.
The Office of the Director of Corporate Enforcement will be formally established on 28 November 2001 with Mr. Paul Appleby as director. The director will replace the Minister for Enterprise, Trade and Employment in all respects regarding the enforcement of company law, including the investigation of company law offences, except in regard to the ongoing work of the authorised officer who will continue to carry out his investigations into five companies under section 19 of the Companies Act, 1990, that I have referred to previously.
