Vol. 524 No. 1
6 Proinsias De Rossa asked the Tánaiste and Minister for Enterprise, Trade and Employment the total 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 elements of these costs which have been recovered from NIB; and if she will make a statement on the matter. [21560/00]
The costs incurred on recent company investigations initiated by or on behalf of my Department amount to about £3.92 million. This amount does not include the salary costs of Civil Service staff who are working on a number of these investigations. Similarly, the major proportion of the legal costs relating to the investigations are being borne by the Vote of the Chief State Solicitor. Of this amount, the cost of the inquiries into National Irish Bank Limited and National Irish Bank Financial Services Limited, which are being undertaken by High Court inspectors under section 8 of the Companies Act, 1990, currently stands at about £2.5 million. None of this has yet been recovered from the two companies.
Section 13 of the 1990 Act provides that the cost of a section 8 inquiry shall be defrayed in the first instance by the Minister for Justice, Equality and Law Reform. However, the court may direct that any person being inter alia a company dealt with in an inspector's report shall be liable to repay the Minister the costs incurred to such extent as the High Court directs. As I have indicated in the House on numerous occasions, it is my intention to request the High Court to require the full recoupment from the companies concerned of the significant costs of these inquiries on their completion.
Of the balance of £1.42 million, the principal areas of expenditure have been incurred on the investigations of Ansbacher (Cayman) Limited, £814,000, Bula Resources (Holdings) plc, £203,000, Faxhill Homes Limited, £143,000, IIB Bank Limited, £65,000, and various other investigations, £25,000. The sum also includes £170,000 in respect of the State's portion of the costs of liquidation of the group of companies associated with the Clonmannon retirement village which have recently been paid. These companies were the subject of a company investigation in 1994-95, initiated by Deputy Rabbitte.
If I caught sight of any of these reports I think I would agree with the Minister that they are good value for money. However, we are back to the subject matter of the earlier questions. We cannot yet judge that for ourselves.
I take it from what the Minister said that it is her intention to pursue National Irish Bank and associated companies for the costs incurred as a result of that inquiry. When does she think that inquiry is likely to be concluded?
They are High Court inspectors. An interim report was made by the inspectors to the High Court in July this year. I believe they have made enormous progress. There were two sets of litigation earlier in the inquiry which delayed the inspectorate. I believe the reports will be finalised very soon. It is my intention to apply to the High Court to have the costs recovered as I do not believe the taxpayer should have to fund the cost of these inquiries.
The Minister said that the cost to date is £3.9 million which does not include staff costs or a major element of the legal costs. If that is the case have we an estimate of the total cost of these investigations, taking these two considerations into account? Does the Tánaiste believe the budget of £3 million for the directorate of corporate enforcement will be inadequate to deal with such investigations in future?
No, I do not, because the company law enforcement office will have a huge number of legal staff, which we do not have. I do not know what the cost would be on the Vote of the Office of the Chief State Solicitor, but the sum of money being allocated initially is appropriate. If it is not we will get more resources, but I do not think we should look at this simply from a resource point of view. The changes in the Company Registration Office, together with these inquiries, are changing the culture. I do not believe we will ever again see a situation where at one time there are 13 major inquiries taking place. The failure to enforce the law in the past and to have an appropriate enforcement mechanism, such as the new company law enforcement office, led to a situation where the law was ignored.
Regarding costs, the bulk of the £3.92 million concerns the NIB inquiry which cost £2.5 million. The rest has been pretty good value for money given what we have achieved and the revenues which have gone to the Revenue Commissioners as a result of the inquiries.
Has anybody in the Minister's Department had time to devote to assessing the efficacy of these investigations in terms of cost, efficiency and time? We have seen more of them in the past decade than in the previous five decades. Has the time come to examine whether this is the best way to police corporate governance and how much of this was taken on board during preparation for the Companies (Amendment) Bill currently before the House which provides for the director of enforcement?
I do not think anybody in the Department has done a value for money audit, but I came to the conclusion fairly early on that it was not satisfactory that a Minister or a political decision should decide whether or not an inquiry into a company should be carried out. That is why we established the group under Michael McDowell, now the Attorney General. That was a group of interested persons from a wide cross-section of society, including the trade union movement, lawyers, people with company law expertise and public servants from different Departments. They concluded this was the direction in which to go, and it is right that we should have a separate independent office to enforce the law. Unless we have successful prosecutions we will not change the culture successfully. Successful prosecutions together with the new office will change the culture regarding the enforcement of company law. Some decisions made by Deputy Rabbitte in relation to resources allocated to the Companies Registration Office are making a fairly major difference in relation to registration and such matters.
