The oversight and regulation of lending institutions is primarily a matter for the Central Bank and my colleague the Minister for Finance.
In relation to the matter of reckless trading, under the current company law framework, the High Court may declare under Section 297A of the Companies Act 1963 (as amended) that a person shall be personally liable for all or part of the liabilities of a company, where they have knowingly been a party to reckless trading while they were an officer of the company. Receivers, examiners, liquidators and company creditors may make these applications to the Court where a company is in examinership or is being wound up.
Reluctance on the part of persons to cooperate with investigations in relation to certain offences was addressed as part of the Criminal Justice Act 2011. Pursuant to section 15 of that Act and for the purposes of the investigation of a relevant offence, a member of the Garda Síochána may apply to a judge of the District Court for an order requiring, the making available by a person of any particular documents or the provision by a person of particular information by answering questions or making a statement containing the information or both. Failure to comply with such an order is an offence.
More generally the Companies Bill 2012, which has recently been published, contains a number of measures to strengthen company law compliance, including:
- The classification of the majority of offences according to a four-tier scheme. The maximum penalty under this scheme in relation to a prosecution on indictment is a fine of not more than €500,000 or up to 10 years in prison or both.
- A directors’ compliance statement which will apply to all PLCs (except investment companies) and to all other large limited companies with a balance sheet total exceeding €12,500,000 and a turnover exceeding €25,000,000. Directors of such companies will be obliged to make an annual statement in their Directors’ Report, acknowledging that they are responsible for securing the company’s compliance with its “relevant obligations” and confirming that certain things have been done or, if they have not been done, explaining why they have not been done. “Relevant obligations” means an obligation under tax law, or where failure to comply would constitute certain offences under the Bill, or certain Market Abuse or Prospectus offences. The failure to include a compliance statement in the Directors’ Report of an affected company is an offence under the Bill.
