The Deputy’s assertion that no prosecutions have been brought or convictions achieved by the Office of the Director of Corporate Enforcement in the past two years does not present a complete picture of the activities of that office over the past two years.
It is important to make the point that the Director of Corporate Enforcement is only statutorily empowered to initiate summary prosecutions, namely, prosecutions of relatively minor offences in the District Court. In that context, and in keeping with the ODCE strategy of seeking to allocate resources towards confronting indications of wrongdoing at the more serious end of the spectrum, the ODCE did not initiate any summary prosecutions over the past two years.
More serious alleged breaches of company law are prosecuted on indictment in the Circuit Court. The Director of Corporate Enforcement cannot initiate prosecutions on indictment, rather only the Director of Public Prosecutions, DPP, can direct that charges be preferred on indictment. On foot of investigations undertaken by the ODCE, and the subsequent directing of charges on indictment by the DPP on 21 December 2016, a former director of Anglo Irish Bank Corporation plc entered a plea of guilty before Dublin Circuit Criminal Court to one count of fraudulent trading contrary to section 297 of the Companies Act 1963, as amended; on 21 December 2016, a former director of Anglo Irish Bank Corporation plc entered a plea of guilty before Dublin Circuit Criminal Court to one count of failing to maintain a register of certain transactions involving directors and others contrary to section 44 of the Companies Act 1990, as amended; and, on 27 July 2017, a person entered a plea of guilty before Limerick Circuit Criminal Court to one count of fraudulent trading contrary to section 297 of the Companies Act 1963, as amended. The facts of this case are due to be heard, and sentence imposed, by the court on 21 December 2017.
Once the DPP directs charges on indictment, the matter moves into the realm of the courts. The speed of progress thereafter is determined within that process. I refer the Deputy to the ODCE annual report 2016 which points to a number of key successes during the year including, following the examination of reports submitted to the office by liquidators of insolvent companies, 90 company directors were restricted and 11 disqualified by the High Court;
Additional information not given on the floor of the House
93 restriction undertakings were obtained from directors of insolvent companies; as an alternative to formal enforcement actions, cautions issued to a total of 61 companies; the securing of the rectification on a non-statutory basis of suspected infringements of the Companies Act 2014 in relation to directors’ loans in 60 cases, to an aggregate value of €17 million approximately; 108 directions were issued to relevant parties requiring them to comply with their statutory obligations under company law; the submission of five investigation files to the DPP for consideration, with recommendations including charges under both company law and the Criminal Justice (Theft and Fraud Offences) Act 2001; seven demands issued to companies for the production of their books, records and other relevant documents; and during the year, the register of disqualified, deemed disqualified and restricted persons, as maintained by the Registrar of Companies, was reviewed. Arising from that review, a total of 83 instances were identified where persons appeared to be acting in contravention of court orders-legislative provisions. Following intervention by the ODCE, the individuals’ positions were regularised.
In excess of 1,050 statutory reports and referrals were received from liquidators, auditors, examiners, professional bodies and other regulatory and enforcement authorities. There were 130 internally generated inputs and almost 250 complaints received from members of the public. To encourage compliance with company law, the ODCE issued in excess of 16,000 copies of its various publications during 2016. Over the past ten years the ODCE has referred files in respect of a number of investigations to the DPP, on foot of which the DPP has directed a total of 214 charges on indictment.
In terms of reform of the office, organisational reforms in the ODCE were commenced in 2012 by the current Director of Corporate Enforcement upon his appointment, to enhance the capability of the office to investigate increasingly complex breaches of company law and to ensure a more efficient and effective use of its resources. These include reorganising the structures of the office; and recruiting additional expertise, including six forensic accountants and a digital forensic specialist. As senior level vacancies have arisen, reconfiguration of the skill sets, competencies, roles and responsibilities associated with those posts in order to better reflect the organisation's current needs. That exercise has resulted in the creation of two senior level professional posts of enforcement portfolio managers, with one of those posts having been filled and the filling of the other expected shortly. Further recruitment is ongoing. Other reforms include fundamentally amending the investigative procedures used by the office so that members of An Garda Síochána take the lead in all criminal investigations; and fostering a greater culture of risk management within the office.
In addition to these reforms the establishment, as announced by Government earlier this month, of the Office of the Director of Corporate Enforcement as a new independent company law enforcement agency will provide greater autonomy to the agency and ensure it is better equipped to investigate increasingly complex breaches of company law. The package of measures to combat white collar crime sets out an ambitious timeframe for the establishment of the new independent company law enforcement agency. It is expected that the general scheme of a Bill to give effect to this decision will be published by the second quarter of 2018, with final publication of the Bill by the fourth quarter of 2018. Work on the development of the legislative framework for the agency has already commenced.
My Department will engage with the Organisation for Economic Co-operation and Development to advise on international best practice in the establishment of the agency in terms of internal controls, staffing, budget and corporate governance.