I thank the committee for the invitation to appear before it. This meeting has been preceded by correspondence spanning more than a year and a half and, as such, I am sure that all concerned are pleased that we have finally reached this point. As I am time bound in delivering my opening statement, I will get to the point. The question was posed at the committee's meeting of 5 February as to whether the ODCE is fit for purpose. In a similar, albeit more colourful, vein, it was asserted that the ODCE is "an appallingly failed entity". It is, of course, entirely legitimate for legislators to question whether the ODCE is fit for purpose given the provenance of the general scheme of the Bill currently before the committee. However, it is respectfully submitted that any such assessment should be conducted by reference to the facts – and I will return to the facts later.
Incorporation with limited liability is a privilege conferred by the State for the purpose of encouraging and facilitating entrepreneurial activity. In return, company law imposes requirements on those who benefit from that privilege and confers rights upon, among others, companies' members and creditors. However, 20 years ago, company law was, to all intents and purposes, unenforced in this jurisdiction. That state of affairs was judged to be unacceptable by the legislators of the day and gave rise to the enactment of the Company Law Enforcement Act 2001, CLEA, which provided for the establishment of the ODCE.
The CLEA, which was subsequently subsumed into the Companies Act 2014, conferred the ODCE with three core functions, namely, to promote compliance with company law, to exercise a supervisory remit vis-à-vis insolvent companies, and to investigate suspected breaches of company law and take appropriate enforcement action.
Over the past decade, the office has, through a combination of High Court applications, detailed assessment of liquidators' statutory reports and, more recently, by way of offering statutory undertakings, overseen the restriction of 1,648 directors of insolvent companies and the disqualification of a further 228 company directors. While both restriction and disqualification have a punitive dimension, their principal purpose is to protect members of the public. Consequently, both have serious implications for the almost 1,900 individuals concerned and contravention of either can expose one to both unlimited personal liability and criminal sanction.
For similar reasons of creditor protection, company law imposes limits on the extent to which company directors, and persons connected with them, can extract funds from companies by way of borrowings, thereby reducing the funds available to meet creditor obligations. Over the past decade, ODCE intervention has resulted in unlawful directors' loans to the value of €500 million being rectified. Multiple other instances of non-compliance have, similarly, been addressed through cost effective approaches including the issuing of warnings and statutory directions. The latter category of action includes, for example, assisting homeowners to vindicate their rights as members of property management companies – an extraordinarily important issue for those concerned.
At the other end of the civil enforcement spectrum, following a major investigation over the course of a year and a half the ODCE filed papers with the High Court in March 2018 signalling its intention to apply for the appointment of inspectors to the publicly quoted Independent News & Media plc. In response, the company initiated judicial review proceedings seeking to quash the ODCE's decision to seek the appointment of inspectors, and in so doing, arguing that the ODCE had been under an obligation to consult with the company in advance. In June 2018, the High Court rejected the company's arguments and dismissed the judicial review. Following the hearing of the subsequent application for the appointment of inspectors, which was vigorously opposed, the High Court delivered judgment in September 2018. In delivering his judgment, the President of the High Court, Mr. Justice Kelly, concluded:
As I said in the DCC case on the topic of proportionality, the appointment of inspectors is a serious matter and such a sledgehammer should not be used to crack a nut. What has been disclosed in the evidence before me is no nut. The appointment of inspectors to ascertain the truth of what has allegedly gone on in the company is well justified and is not disproportionate. None of the issues raised by the company warrant the court exercising its discretion against making the order sought. It may be that there will be a complete explanation for all of the Director's concerns but if there is not then what is alleged is very serious indeed. The evidence merits the appointment of inspectors and that is the order I make...”.
In the realm of criminal law, over the past decade, the ODCE has both initiated prosecutions in the District Court and referred matters to the Director of Public Prosecutions, DPP, on foot of which numerous charges have been directed on indictment. Over that period, convictions have been recorded on 97 counts in the District Court, with multiple other charges being taken into consideration, and convictions on indictment have been recorded on 46 counts in the Circuit Court.
Of course, by far the highest profile prosecutions associated with the ODCE are those that related to the former Anglo Irish Bank Corporation plc, or Anglo. Before I address the matter of DPP v. FitzPatrick, it is important to place on record that the ODCE's Anglo-related investigation, which comprised of five separate investigations, resulted in four trials, all of which resulted in persons being convicted on indictment of criminal offences. In the narrative that has followed DPP v. FitzPatrick, sight is sometimes lost of that fact. It is also important to note that it has never been suggested in any court that any of the investigations were in any way deficient or below the requisite standard. Specifically, the aforementioned trials resulted in Mr. William McAteer and Mr. Patrick Whelan, both former directors of Anglo, each being convicted on ten counts of the provision of unlawful financial assistance contrary to section 60 of the Companies Act 1963, as amended; Mr. William McAteer being convicted on one count of fraudulent trading contrary to section 297 of the Companies Act 1963; Mr. Patrick Whelan being convicted on one count of failure to maintain a licensed bank's register of lending to directors contrary to section 44 of the Companies Act 1990; and Mr. David Drumm, also a former director of Anglo, being convicted on ten counts of the provision of unlawful financial assistance contrary to section 60 of the Companies Act 1963, as amended.
In addition to all of the foregoing, since its establishment, the ODCE has published a substantial number of guidance documents for the benefit of those engaging with companies in a range of capacities. Those documents are widely regarded by stakeholders, both professional and lay, as being of an excellent standard and an invaluable reference tool.
I will turn now to the matter of DPP v. FitzPatrick. In circumstances where the report that I submitted to the then Tánaiste and Minister for Business, Enterprise and Innovation in June 2017 cannot be published, in response to the committee's stated desire to discuss the matter of DPP v. FitzPatrick, by letter dated 22 December 2017, I indicated my intention to provide the committee with a detailed submission on the matter in order that it could discharge its functions of holding the ODCE to account and scrutinising proposed legislation on an informed basis.
As is plainly evident from my correspondence with the committee, of necessity, there is considerable overlap between my proposed submission and the report submitted to the then Tánaiste and Minister. However, on two separate occasions thereafter, the committee stated to the ODCE-----