Dáil Éireann debate -
Tuesday, 25 Mar 2003

Vol. 563 No. 4

Written Answers - Company Law.

Joe Costello

Question:

140 Mr. Costello asked the Tánaiste and Minister for Enterprise, Trade and Employment her proposals to improve supervision of company directors, having regard to the recent findings of the Director of Corporate Enforcement that one in five company failures appeared to involve serious misconduct by directors; and if she will make a statement on the matter. [8115/03]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney)

Under section 56 of the Company Law Enforcement Act 2001, liquidators of insolvent companies are required to submit reports to the Director of Corporate Enforcement. The Director issued a consultation document on his liquidation functions under this provision. In this consultation document, the Director of Corporate Enforcement said that the evidence from the first tranche of liquidators' reports submitted to him indicated that, in about half of the cases reported on, court action should proceed against the directors of those companies to have restrictions placed on them as directors under section 150 of the Companies Act 1990. The director also reported, more worryingly, that serious misconduct appears to be present in a significant minority, 20%, of insolvent cases.

Very specific actions have been taken to improve the supervision of directors. Because of my concerns about corporate misconduct, I oversaw the establishment in 2001 of the Office of the Director of Corporate Enforcement. The office has been very well resourced with professional, administrative and Garda staff available to the Director. One of the most significant recent initiatives is section 56 of the Company Law Enforcement Act 2001 which provides that the liquidators of all insolvent companies must provide reports to the Director of Corporate Enforcement on the conduct of the directors of insolvent companies. Unless relieved of the obligation by the Director of Corporate Enforcement, the liquidator in such cases must bring an action before the courts seeking to have the directors of insolvent companies restricted. The Director of Corporate Enforcement has a range of powers available to him to oversee and act against errant directors.

Question No. 141 answered with Question No. 124.