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Seanad Éireann díospóireacht -
Thursday, 13 Dec 1990

Vol. 127 No. 2

Companies (No. 2) Bill, 1987 [ Seanad Bill amended by the Dáil ]: Report and Final Stages.

I welcome the Minister to the House and, in accordance with Item No. 3, I now call on the Minister to explain the purpose of the amendments made by the Dáil to Parts I to V inclusive of the Bill.

Question proposed: "That the Bill be received for final consideration."

It is a little over two years since the Seanad passed this Bill. No one can deny that a lot of water has flowed under the bridge since then. Governments have come and gone, both here and abroad, and we have seen remarkable transformations of all kinds, economically, politically and in many other ways. While all this was happening one thing always seemed to be constant — the Companies (No. 2) Bill, 1987. Many people wondered whether we would ever see it enacted or whether it would go on forever. Here we are now on, I hope, the threshold of its enactment and I hope that all those who forecast that there was no political will to put it on the Statute Book are listening now.

The Minister is on dangerous ground.

In this context, perhaps the House will recall that in my concluding remarks on the Companies (Amendment) Act, 1990 on 29 August I said:

If there is any Bill that I want to see enacted it is the Companies (No. 2) Bill, 1987, and for a very good reason, there are an enormous number of potential malpractices that can go on in Irish commercial life today which we can do nothing about.

Needless to say, that remains my view. Senators will be aware that in the course of its 19 months before this House the Bill was the subject of more than 200 amendments.

On a point of order, could we have copies of the Minister's statement please.

Minister Burke afforded the House that courtesy yesterday. It may be helpful, particularly to Senators who were not here when the Companies Bill was last in the Seanad.

The Minister is here to explain the purpose of the amendments made by the Dáil, Parts I to V, inclusive, of the Bill. It is a matter for the Minister's discretion.

Yes, we were just asking whether they would be forthcoming.

In the unusual circumstances, I think the Minister should consider making them available to Senators. There is a precedent for it. Quite a number of Senators have left the Chamber and are very disappointed——

You have made your point. It is a matter for the Minister's discretion and I will leave it at that.

I am afraid I have not got copies available. I can make them available later on if they are needed. I do not necessarily deliver precisely what is before me. I felt it is necessary to expand on certain matters. I am seeking to be helpful and I do not really have to make a statement of this kind at all.

The Minister has been more than helpful in the matter. He should be allowed to continue.

Senators will be aware that in the course of its 19 months before this House this Bill was the subject of more than 200 amendments here and that it got the most thorough going over in the process, particularly in the case of Parts V, VI, and IX. It will be obvious from the list of amendments made by the Dáil that the Bill got an equally searching examination there. With the exceptions of Parts I and II, the Committee Stage in the other House was handled by a Special Committee representative of all sides of the House and indeed all shades of opinion. The Special Committee held no less than 21 sittings and more than 200 amendments were made to the Bill as a result. Indeed, I should add that most of the amendments made on Report Stage in the Dáil were as a result of suggestions made by members of the committee. No one can argue, therefore, that this Bill has not received the most searching examination by both Houses of the Oireachtas.

Turning to the amendments made by the Dáil, however, these tended to fall into a number of categories. First, a number of new provisions were added to each Part and indeed two new Parts were added. Secondly, I took the opportunity to implement, via the Bill, three European Community directives which are relevant to the subject matter of the Bill. Thirdly, many amendments were made as a direct result of the consideration of the Bill at the various Stages in the other House. Finally, many amendments of a relatively minor drafting or fine tuning nature were also made.

Perhaps what I should do now is say a few words about the amendments which were made by the Dáil to Parts I to V of the Bill, which I understand are now being taken together. Part I of the Bill contains the usual introductory provisions dealng with commencement, interpretration and repeals of existing legislation and so on. Four amendments were made to this Part in the Dáil, mainly on Report Stage. Perhaps the only one of particular note was amendment No. 4 to section 6. This amendment, together with amendment Nos. 284 and 297, and the deletion of section 45, provide for the application of certain further provisions of company law to unregistered companies. It is important to say, however, that these amendments do not as such bring any further companies or bodies within the scope of the Companies Act.

Part II of the Bill deals with investigations of various kinds into affairs of companies. The House will no doubt recall that under the existing Companies Act the power to appoint inspectors rested with the Minister. These provisions have not proved to be effective. In an effort to address the problem, Part II provides for the transfer to the court of the main function to appoint inspectors to carry out investigations into companies where this is warranted. A number of amendments were made on Committee and Report Stage in the Dáil to fine tune the provisions in this part. For example, it has now been clarified that the court can order an investigation into a company even where it is in the course of being wound up. When it comes to payment for the costs of an investigation, in the interests of ensuring that people would not be put off from seeking an investigation because of the costs involved I agreed to make an amendment which will reduce the amount of security an applicant can be required to put up to £100,000.

In accepting the amendment, I was at pains to point out, and I do so again here, that this is the maximum security the court can require and there will be nothing to prevent it looking for a lesser amount, or indeed for none at all. Another amendment I made to this Part in the Dáil, which may be useful in certain circumstances is to enable the Minister, by regulation, to overcome any difficulties which arise in the operation of the provisions in this Part. This will enable the Minister to react to any problems which arise in the future without having to introduce amending legislation.

Part III of the Bill could be described as a set of provisions which tackle some conflicts of interest which can occur involving transactions of various kinds, typically between a company and its directors. Thus, there are provisions about loans to directors, long term service contracts, speculative dealing in company options and so on.

The House will see, from looking at the number of amendments made by the Dáil to Part III, that a considerable amount of further thought went into this particular Part following its passage by this House. In considering what the correct attitude ought to be on the whole question of companies lending to their directors and so on, I reflected on what was said in both Houses and by various interested parties. In doing so I was conscious of four main objectives. First, the greatest mischief we are trying to tackle here is the situation where a company lends money to its directors or their connections and the company subsequently goes into liquidation leading to a loss for the creditors. Secondly, we do not at the same time want to restrict unduly the flexibility of companies to remunerate their directors in situations where the company can well afford it. Thirdly, we want to ensure that the various provisions in this Part of the Bill cover as wide a range of companies as possible consistent with ease of enforcement. Finally, we want to make the provisions concerned less complex and easier to understand and to operate.

Bearing in mind what many Members of both Houses had said on the subject, I was not, on reflection, satisfied that these overall objectives were adequately served by sections 31 to 40, Part III, as they left this House and I feel they are better served through the amendments made in the Dáil. These amendments make significant changes to the structure and thrust of Part III as passed by the Seanad and in general terms they have the following effect. To begin with, the various prohibitions and restrictions on quasi-loans and credit transactions would now apply to all companies regardless of size. This would dispense with the need to distinguish between what are called relevant companies and other companies. Furthermore, instead of having absolute money limits to the amount a company could lend to its directors and so on, companies in general would now be permitted to lend up to 10 per cent of their net assets to directors or persons connected with them. However, to make sure that this greater flexibility was not abused, if loans to directors contributed materially to a company's insolvency the directors concerned would face the possibility of personal liability for the company's debts. Finally, the rules for determining other exemptions from the restrictions concerned have now been simplified. Indeed, I tried hard to simplify most of the provisions involved here in other words, sections 24 to 40 of the yellow text of the Bill — to make them more clear-cut and so that the companies and their directors will see more clearly what the law will be and where they stand in relation to it.

Part IV of the Bill will not only replace the existing provisions relating to holdings of directors and secretaries with new expanded provisions but will also introduce new requirements relating to disclosure of significant shareholdings by all beneficial owners of shares of debentures on a company. Under the new approach the extent of the disclosure will vary according to whether the company is a public limited company or a private company and also according to whether the person involved is a director or secretary or merely an individual shareholder in the company.

Part IV comprised 42 sections when it left this House and contained detailed provisions about disclosure of interest and shares of companies. The Dáil added a further 12 sections to this. While the Dáil made a total of 37 amendments to this Part, the majority of these were in the nature of drafting improvements and in the interests of internal consistency. However, one series of amendments I want to mention specifically concerns amendments Nos. 114 to 121 on today's list. These amendments consist of eight new sections which were added at the Dáil Committee Stage in order to implement a Community directive which was adopted in December 1988 and which is due for implementation not later than 1 January 1991. The full title of the directive concerned is Council Directive of 12 December 1988 on the information to be published when a major holding in a listed company was acquired or disposed of. The fact that we are legislating in this field now provides an excellent opportunity to transpose this directive into our national law and have the additional benefit of reducing the waiting list of directives in this area queing up to be implemented. I might just mention in passing that there are 11 other company law directives in this particular queue, which shows the quickening pace of European Community activity in the internal market programme.

In regard to the directive itself, the Irish negotiators in Brussels were very conscious of the terms of Part IV of this Bill and of the desirability of making sure that the final shape of the directive was as compatible as possible with it. With this in mind they were able, by dint of careful negotiations in Brussels, to ensure that the directive which finally emerged requires only the minimum amendment to the Bill for its implementation. The directive is based on the same principles of disclosure of information as underlies Part IV, Chapter 2, of the Bill, with the basic difference that the directive applies only to disclosure of interests in companies which have a full official listing on the Stock Exchange. Apart from that, the directive follows the broad policy of Part IV but is not generally as strict as that Part. In general, the directive requires disclosure when a shareholder passes a certain percentage holding in a listed company. However, while the Bill specifies a minimum threshold of 5 per cent beyond which single percentage point disclosure must be made, the directive only requires disclosure where certain specified thresholds are passed — in other words, 10 per cent, 25 per cent, 50 per cent and 75 per cent.

The second additional dimension of the directive is that we are required to give certain supervisory functions to a competent authority in order to make sure that the provisions of the directive are complied with. I propose designating the Stock Exchange for this purpose, something we have previously done in implementing other directives relating to Stock Exchange matters.

I will not go into the policy issues underlying the provisions involved in Part V of the Bill — the House no doubt will be well familiar with that aspect — other than to say that, following the introduction of a number of new sections in this House, Part V now comprises a two-pronged approach and contains both civil and criminal provisions. Part V is structured in such a way that, following some general definitions for the interpretation of the Part, the practice of insider dealing is made unlawful in section 91.

The Part then goes on to provide for the civil and criminal sanctions which can be applied and for other related issues. Most of the amendments made to Part V in the Dáil are designed to implement a European Community directive on insider dealing which was adopted by the Council of Ministers on 13 November 1989 and must be implemented by 1 June 1992. When the detailed negotiations on the directive were going on at official level the Irish negotiators were very conscious of the existing proposals in the Bill and I am glad to say that the final shape of the directive was along the general lines of Part V. This means that the directive can be implemented with the minimum of amendment to Part V. Certain other amendments were also made to Part V by the Dáil. While most of these were drafting improvements, I should perhaps mention No. 132, which provides a further exemption to the basic prohibition, and No. 142, which requires the Stock Exchange to make sure that potential conflicts of interest are avoided as far as possible when they appoint authorised persons to investigate suspected cases of insider dealing.

Finally, because of the innovative nature of many aspects of Part V, provision is made for the furnishing of annual reports to the Minister by recognised Stock Exchanges and amendment No. 146 allows the Minister to prepare supplementary regulations to fine-tune the operations of the Part if this is considered necessary in the light of experience gained in its operation.

Because of the importance of Part V it might, perhaps, be useful to the House if I gave a slightly more detailed exposition of some of its more important aspects. Before doing so I think I should point out again to the House that all the references I am making at the moment to sections are references to sections of the yellow text of the Bill. That is the Bill as it left this House and not the green text, which, even though that is the later one and the fuller one, is not appropriate to Report Stage in relation to the original yellow text with which we are now dealing.

In conclusion, therefore, I would like to say a few words about some more of the detail of Part V and to begin with the civil remedies. Section 92 provides that the person who can show that he has suffered loss as a result of unlawful insider dealing can seek civil remedies against the party who engaged in the unlawful dealing. Likewise, a company whose securities have been the subject of an inside deal can also seek remedies. both remedies would amount to the obtaining of compensation from what I might call the insider.

To turn now to the question of criminal sanctions, a number of sections are available under the Bill against a person who engages in insider dealing, with the necessary supporting enforcement provisions. These were introduced in the Seanad following a thorough re-examination of this Part arising from the almost universal criticism that as originally presented the proposals in Part V did not go far enough in tackling the abuses which are involved. In the first place, unlawful dealing is made a criminal offence and persons convicted of engaging in this practice will be liable on summary conviction to a fine of £1,000 or imprisonment for not more than one year, or both, or on conviction on indictment to a fine of £200,000 or ten years imprisonment, or both. Where a person is convicted of unlawful dealing he will be further prohibited from any future Stock Exchange dealings for a period of 12 months. There is, however, a let out so the dealings commenced before the conviction maybe completed, provided that they are cleared by the Stock Exchange.

To ensure the operation of the prohibition and recognising the expertise that already exists in the Stock Exchange, a kind of enforcement role is provided for the relevant authorities of a recognised Stock Exchange, which includes backup powers of investigation by authorised persons. At the same time, desirable and necessary safeguards are built into the procedures involved. Thus the primary responsibility for overseeing the criminal provisions of the Part will rest with the recognised Stock Exchanges. Where breaches of the Part are observed the exchange will be under an obligation to furnish a report in the matter to the Director of Public Prosecutions. Residual power to enable the Minister to request a recognised Stock Exchange to investigate suspected cases of unlawful dealing when it appears no such investigations have taken place are also provided for.

Section 96 proposes to create a new duty on those who were invovled in share dealing as intermediaries not to deal on behalf of clients if they have reasonable cause to believe, or ought to conclude, that the deal involved would be unlawful.

Those are, in very general terms, some remarks about the principal amendments that have been made to Parts I to V, inclusive, which I hope may be of some value to the House. It is worth reminding ourselves that we are technically on Report Stage, and my experience is that it is not the practice to circulate scripts on Report Stage. That is why that practice has been followed today.

First, I welcome the Minister here. I accept that he was delayed somewhat in getting to the Chamber today and that there was a delay in the debate getting underway. In fairness to the Minister, and perhaps in fairness to myself, I should just say that, because I am concerned about the problem I have been faced with in taking this measure today.

The Minister has said that he hopes his introductory speech to the House will be helpful to us. I accept that that is entirely his intention. However, if put against the disadvantages I found myself contending with over the past few days, it will be quickly realised that this combination of circumstances had made extremely difficult the task which I would like to discharge conscientiously. I noted towards the end of his speech the Minister looked across and said I should be relating what he was saying to the text of the Bill as it left the Seanad in 1988, or whenever it was. That is an additional document I would have needed to refresh myself on over the past few days. In addition to the Bill in the form that it was available to me at the weekend, which was as it left Committee Stage in Dáil Éireann, by yesterday midday I had received the Bill as passed by Dáil Éireann and I had received also a sheet of amendments, as I have here before me. That is just over 24 hours ago.

I want to assure the Minister and the House that it has always been my desire to participate as constructively and as effectively as I can in any matter of legislation or any other business that comes before the House. I have to quite honestly say that I am considerably disadvantaged. Therefore, because of the circumstances in which this Bill has been returned to the Seanad, some aspects of my contribution will be very superficial. That goes against the grain with me, because I would much prefer to be in a position to understand fully, to analyse and to contribute as comprehensively as possible on the various matters before us.

I noted also that the Minister has undertaken to make available later on the text of his statement to the House. I would request that perhaps he would do the same in relation to Parts VI, VII, VIII, IX, X and XIII. by the time the text of the Minister's speech becomes available to the House it will be of no use to me. I had to try to keep a mental note of the many points the Minister made. That is not always possible. If circulated, the text should be of advantage to those who will follow me in the discussion.

I want to make this final point to the Minister before. I get on to the actual Parts of the Bill. We have until 4.30 p.m. or 5 p.m. to dispose of five Parts of a Bill that occupied the time of the Dáil Special Committee for 13 days and the record of the discussion there runs to 708 columns. There are five Parts, 121 sections, 147 amendments — and we have 155 minutes in which to do it. Obviously, we cannot effectively deal with it in the available time.

There are five Parts that we are concerned about at this stage of the discussion. No. 1, the preliminary stage again, it is something that will not require much time. Two amendments were made, as the Minister pointed out. Part II, investigation. That is something I would wish to have a considerable amount of time on, because there are certain aspects of it about which — perhaps for the want of understanding or knowledge of the discussion that arose in relation to it — I am unsure. The same thing would apply to Part III, dealing with transactions involving directors; and the remaining three Parts deal with the disclosure of information and insider dealing. As I say, because of time constraints in getting the material assembled and the time constraints on discussion here today. I find myself in a very unacceptable position. I would also make the point to the Minister that I was not a Member of the Seanad who dealt with this legislation, and that is a further difficulty.

As I said earlier today, I want to make it absolutely clear that we are not obstructing this legislation, either this morning or at any other time, for the sake of doing so. We recognise there is a need to get legislation in place. We recognise the need to update company law, and there is ample evidence that the law has been inadequate. There is the scandal that has left many investors in poverty and penniless. Because of these factors and because basically the Bill is a reasonably good Bill — at an earlier stage today I complimented the Special Committee of the Dáil on the time and expertise they brought to their discussions — I have in general terms little reservations about the major part of the legislation before us. My difficulty is related to the time constraints that have been forced upon me and the fact that I was not a Member of the Seanad that dealt with this legislation. I have been constrained in time in the debate as well as in the examination of the legislation and preparation for the debate, as I would much prefer to have had a greater opportunity to do justice to what I regard as important legislation.

I want to make a few general observations because I assume the Minister will respond to the points that will be made here. I want in particular to refer to Part II of the Bill dealing with the powers of investigation. I recognise fully the need for a substantial investigative process or powers to be available. It was brought home forcefully to me last night and to other people, I am sure, who saw a programme on RTE in which the Minister participated. There would appear to be an inadequacy in the powers to deal with situations that have arisen. What I am concerned about is that while the investigative powers are included in the Bill, the detailed consideration of how these powers may be used is not possible in the time available. The Special Committee did not deal with that aspect of it. Fraud, dishonesty and reckless behaviour by people involved in companies is unfortunately, widespread. While I recognise the need to have satisfactory and substantial powers I am not sure that these are adequate.

There are one or two aspects I am concerned about. In relation to the powers provided for under section 20, which deals with entry and search of premises, I searched the definition section of the Bill but I did not find a definition for "premises". "Premises" could include a person's home. I am seeking clarification of this. As regards the question of search and entry and the power to use such force as is reasonably necessary for that purpose and to take possession of books, are homes included in the definition of premises? If they are, what is the situation? If all the force that is necessary is used to enter a premises and nothing is found — the likelihood is that if nothing were found the occupants and owners of the premises were innocent — what is the position in relation to any damage caused?

Section 23 relates to privileged information. It also deals with the information that a bank may or may not be required to provide. As regards the provision of information and the privilege that applies to banks, am I correct in assuming that is limited to banks within the jurisdiction? I expect the Minister will respond to that in due course.

Part III deals with transactions involving directors. From the superficial reading I gave to this Part, I recognise that many of the constraints that are included are necessary. There is one overriding worry I have in relation to the Part III and that is everything and everybody is treated alike. Within the mix of companies to which Part III will apply, is the entire range of business from very large multinational companies down to the small limited company, possibly family owned. The failure to differentiate between the size of companies and the fact that the provisions of this Part apply to all companies irrespective of size, will inhibit enterprise and risk-taking to such an extent that it could be detrimental to the development of small companies which contribute a lot to the economy.

A large part of this section deals with lending money to companies. Obviously it is very necessary to deal with the whole question of asset stripping, which is a very serious and difficult problem to deal with. As regards the question of loans to company directors from companies, has consideration been given to banning the issue of loans from companies to directors? There is also the question of the directors' liability. I am viewing this from the aspect of smaller companies. There is the problem of a director who has over-borrowed to a very limited extent being liable for the entire debts of the company. If a director borrows marginally over the limit set in Part III he could be offside as a result of the disposal of shares. If these provisions are coupled with the practice of so many banks in seeking personal guarantees from directors in relation to funds advanced, it places another obstacle in the way of enterprise and risk-taking, particularly for small, family type companies.

Sections 26 and 27 deal with connected persons and shadow directors. In relation to shadow directors, I will leave that aspect to some of my colleagues to deal with. I am concerned at how wide the net has been cast in relation to categories of connected people — spouses, parents, brothers, sisters and children — and the implications for each of these in relation to the collapse of a company.

Section 32 deals with loans to connected companies. Section 39 extends the personal liability of connected persons if certain arrangements were made for their benefit. Section 40 makes it a criminal offence for an officer of the company to permit the company to enter into an arrangement knowing it to contravene section 31. These are drastic measures that may well be necessary but I am concerned about their implication for small family enterprises.

I have raised certain matters with the Minister. I am sure he has dealt with them elsewhere but I have not been able to establish if or where he did so. I may have been repetitive but if that is the case it is because of the short time we had to examine the contents of the Bill, and the short time that was provided for discussion on the matter.

I congratulate the Minister on grasping the nettle and bringing this important Bill to the House. I hope it will be enacted very shortly. It has been hanging around for far too long. It is a Bill which will ensure that issues such as fraudulent dealing and insider dealing, which have given a bad name to many company affairs in this country, will be resolved. I say to the Minister that the Members on this side of the House regret the inconvenience caused to him this morning. It was certainly not of our making and we regret the type of action that was——

It was entirely of Fianna Fáil's making. They did not give us enough time to discuss it.

The Senator, without interruption.

A correction was needed.

——taken by our colleagues on the other side of the House which was highly irresponsible.

We will sort that out later.

Part II deals with various types of investigations into companies's affairs. This adequately replaces sections 165 to 173 of the Companies Act, 1963.

It is very serious if the affairs of a company are investigated. I do not think many investigations have been carried out since 1963. Even where investigations did take place the results were not very clear and did not cast much light on the underlying problems. The fact that the court can now order an investigation into a company, even when it is wound up, will make things easier. I hope that this change will smooth the path of any future formal investigations and that any procedural or legal problems which may arise will be effectively and quickly sorted out.

Part III is an important part which is dealing with the personal transactions between a company and its directors. It is important that a director should not be in a position where he could use a company as his personal bank. That would be a very dangerous situation. If a director's credit is good there are plenty of other places where he could borrow money. If a person is a poor creditor, the last place in the world he should attempt to borrow money from is his own company. Section 3 should sort out that problem.

Part IV contains detailed provisions on the disclosure of interest in shares. There is no doubt that non-disclosure of shareholdings leads to an environment in which corruption or fraud can very easily go undetected. It facilitates fraud and insider dealing, since the insider can conduct his operations through nominee accounts and avoid detection in that way. This is a welcome advance on what we had.

Part V effectively deals with the terrible evil of insider dealing. There is no doubt that this is an evil disease which must be stamped out. I am very glad that the Minister has taken on board all the changes which were made in this House when the Bill was here before and was discussed at great length. It was in this House that the charge of insider dealing was changed from being a civil to a criminal offence. This should act as a strong deterrent to those who consistently practise this method to feathering their own nests by evil and corrupt means. We welcome the fact that insider dealing is a criminal offence. The penalties for conviction are sufficiently severe to rid us of this practice. The fact that a person who has been convicted of insider dealing is prohibited from further dealing on the Stock Exchange for one year will also act as a deterrent.

The Minister has done a very good job in bringing this Bill to the House so expeditiously. It is complex legislation. That is why it has taken so long. It was debated ad nauseam in both the Seanad and the Dáil and in the Special Committee. I welcome the fact that this Bill will be enacted.

In relation to Part II, section 10 (5) regarding the production of documents and evidence on investigation, when this Bill was passing through the Seanad I raised the question of the constitutionality of section 10 (5). I referred to the fact that in a talk to the Limerick Chamber of Commerce, Mr. Justice Ronan Keane of the High Court, who is now President of the Law Reform Commission, expressed serious doubts as to whether the investigation conducted by the inspector, even where the inspector is appointed by the High Court, could be described as an administration of justice. He went into considerable detail on that and quoted a lengthy series of landmark cases which were taken by the Supreme Court such as the case of re. Haughey. He said that to describe the investigation as part of the administration of justice in these circumstances seemed to him to be most inappropriate and he said it was a departure from previous legislation.

I do not see any amendments that covered this matter in the Dáil. The Minister of State at that time, Deputy Brennan, undertook to have it referred to the Attorney General. I do not see any amendments that cover it. As the matter was raised by an eminent member of the judiciary who is now President of the Law Reform Commission, if it is flawed it would throw into considerable confusion the operation of the investigations as provided for in Part II of this Bill.

In view of this morning's happenings, those who were offering are no longer here. There are a few points I would like to make. The Minister in his opening remarks said that he was now here this morning on the final run of this Bill, having started it in the Seanad three years ago. It then went to the Dáil, then to a Special Committee of the Dáil, it was sent back to the Dáil for Report and Final Stages and finally it is back to the Seanad with the amendments from the Dáil taken on board. He pointed out the fact that some people said there was not the political will out there, presumably he means in these Houses, to see this Bill to finality. I do not know; I am one of those who was in the Dáil while the Bill was originally in the Seanad and I have been in the Seanad while the Bill was passing through the Dáil. All I can tell the Minister is that the clamour on the Order of Business here for some months now indicates that there was a lot of political will to get it back into the Seanad and to debate the amendments taken on board.

You would never have got that impression this morning.

Let me explain the position on this side of the House. We received the Bill, as amended in the Dáil, yesterday. We received the complete list of amendments last night. We are here this morning, supposedly after the Order of Business but it was 1.20 p.m. or so when we commenced discussion on the Bill, trying to do justice to Report Stage of most important legislation. It is essential that it is passed but not at such a speed that we cannot examine it properly and in detail.

The reputation and the integrity of the Seanad and its Members is at stake if we do not do justice to this legislation. I regret very much that the format which has been forced and thrust upon us as Senators for Report Stage does not do justice to the Seanad. The political will is there. We have been clamouring for three hours this morning to recommit the Bill and have a full and detailed debate at Committee Stage because of the importance of the Bill and the large number of amendments that have been made to it in the other House. Two-thirds of those amendments are Government amendments which alter the substance of the Bill considerably. Even the Minister changed his mind on the original Bill, so there is a large measure of change in this Bill. I will not go as far as some of my colleagues and say it is a different Bill. It is not different. The basic framework is the same. There are very substantial amendments to the five parts we are now discussing and to the rest of the Bill that alter considerably the substance of the Bill at these points.

Senators, such as myself, who have had no opportunity to debate Second Stage because we were in the wrong House at the right time, or the wrong time depending on how it is viewed, feel very strongly that we should have recommitted the Bill and gone through the Bill as at Committee Stage because of the substantial changes and the large number of amendments made to the different sections. Sections were added and dropped so it is a very different Bill to the Bill that came in here three years ago. I would like to compliment the Seanad at the time, the Cathaoirleach and all those involved, the Minister and the Minister of State, for the enormous amount of work they did and for the time and energy they put into teasing out what must have been complicated legislation when it first landed on their desks. It is now no less complicated but it is considerably changed. If the Seanad is to mean anything as a vocational Chamber, as the Chamber that is to tease out the minutiae and the meaning and differences in legislation that come to us from the Dáil, we must do the same. We are being prevented from doing so by jackboot tactics. I said earlier this morning I feel very strongly, and my party feel very strongly, about what has been forced on us this morning.

I question whether it is Government policy that the Seanad be treated this way. I said it this morning, and I will say it in front of the Minister when he is here to be fair rather than saying something when he is outside the door, furiously waiting to get in and get on with his business, it is because of the Progressive Democrats policy in relation to the abolition of the Seanad that the Minister has such disregard for the Seanad and the procedure.

The Senator got her to answer to that this morning.

Thank you, and perhaps I will get it again later on. So long as I am in order, and I look to the Chair for direction and not to the back benches and not to the Progressive Democrats whose view of Seanad Éireann is one of disrespect and disregard for this Chamber——

I ask for those remarks to be withdrawn by the Senator. They are completely out of order.

The Progressive Democrats wish to abolish this Chamber.

Acting Chairman

Senator Doyle, without interruption. Will the Senator keep her remarks to Parts I to V of the Bill which we are now considering on Report Stage?

The carry on this morning would, for most people, underline the views we have.

I will think about that for a moment. I am not quite sure what it refers to. I welcome the Minister's interruptions so long as the same tolerance is allowed to me when the Minister speaks.

The infantile performance——

I am surprised that Senator Doyle has any doubt about what I meant. I do not think she has.

The only infantile performance, if that rather inept description needs to be entered into the debate at all, came in refusing to allow a proper and detailed debate, in refusing to allow more than 24 hours notice of the amendments that came from the Dáil to this House and in refusing to allow Senators to make a full and proper contribution to most important legislation which the professional bodies feel we have not done justice to and will not be able to do justice to because of the structure of the debate forced on us. The CII, the Irish Bankers' Federation, the CCAB, the Irish Investment Managers, ICTU, the list is numerous, have contacted us. I have no monopoly on wisdom. I know very little about the technical business we are talking about here this morning but what I do appreciate and have a feeling for is the disrespect in terms of the way the Bill is being forced through.

Debate adjourned.
Sitting suspended at 2.30 p.m. and resumed at 3 p.m.

Having received the Bill, as amended in the Dáil only yesterday, and a separate list of all the amendments that were taken on board, I have not yet had time to chase up the amendments that were not taken on board. So if I speak on matters that have been wholly or partly taken on board I stand to be corrected. There are a few points on which I would like assurances from the Minister.

Having originally got the Bill in the Seanad, many points that were taken up refer to sections, page numbers and Parts in the original Bill. Since the Bill was amended in the Dáil the page numbers, the Parts and the sections are all slightly different. There is some degree of confusion which exacerbates the difficulty we have since we only received the Bill less than 24 hours ago. We are not quite sure if the references are still in order as the Bill stands before us now.

The Minister will be aware of the views of the Irish Bankers' Federation on Part V of this Bill. They see difficulties of a very real nature in relation to the Minister's amendments that are referred to on page 89 and 91 of the Bill as discussed in the Dáil. I give that as the reference. Under the Stock Exchange model, co-directors are prohibited from dealing outside what they call the window periods. The purpose of the prohibition is to ensure that the actions of a director do not in themsleves give false signals to the market or give rise to unncecessary speculation. Hence the dealings of directors are confined to times when the market is in possession of the maximum amount of information, that is, immediately after the publication of interim results and the period commencing with the publication of the final results and ending so many days after the annual general merting. It will be appreciated by the House that the annual general meeting is the one time in the year when all available information, not only the financial information must be disclosed to shareholders.

As presently constituted, the Minister's amendment which was accepted would have the effect of forcing directors to take decisions and give signals to the market at a time when they are quite rightly prohibited from dealing. For example, we could view what would happen if 21 days before the publication of the Bank of Ireland interim figures the Stock Exchange published a notice saying that the director of the Bank of Ireland intended to deal in bank stock. That is the effect of the amendment on page 89, section 10 (a) (b) (c) and on page 91 (b) (i) (ii) (iii) — again my references deal with the original document. That would seem quite alarming. I am quite sure that is not the intent of the amendment. I would appreciate if the Minister would explain in detail what he intended and respond to the legitimate concerns of the Irish Bankers' Federation. We do not want to signal it in advance to the point of it having a detrimental effect on the company.

It has been suggested that the problems the Irish Bankers' Federation see in the amendments to this section could be overcome in a number of different ways. They suggest that the notice requirement is section 10 (a) could be dropped. Section 10 states that:

this section does not preclude a person from dealing in securities if, while not otherwise taking advantage of his possession of information referred to in subsection 1 (a) he gives at least 21 days notice to a relevant authority of the relevant Stock Exchange of his intention to deal within the period referred to in paragraph (b) in the securities of the company concerned.

In other words, the Minister is requesting that 21 days notice be given to the relevant authority of his intention to deal. The bank make the point that if it were taken literally, a director of the Bank of Ireland, for example, whose interim results came out a few weeks ago, would be expected to publish notice, 21 days before the results came out, of his intention to deal in bank stock. The implications of that and what would be read by the market from that could be detrimental. I do not understand what the Minister intended and how the difficulties the BIF have pointed to can be overcome without a further amendment.

The point I am making is a very real and fair one. If you flag what you are doing too far in advance, it could cause difficulties. I can understand the Minister's thinking on this part of the Bill which deals with insider dealings and so on. It is, perhaps, the part of the Bill which most heralded its need. The concerns in this area and failure to tackle the problem in legislation was one of the primary reasons for promoting the Bill and seeing it to a successful conclusion.

In our haste to conclude we must ensure that we do not, inadvertently or otherwise, make mistakes that will cause major problems for the business and corporate sector generally. I would be concerned with this particular area. It has been suggested that we could overcome the problem that would appear to be inherent in the Minister's amendment to section 10 (a) that I have referred to if requirement 10 (a) was dropped. That is the approach the Irish Banker's Federation favour because they point out that it is, perhaps, without precedent. They are unaware of any other incidence where such notice, in fact, must be given.

Secondly, the transaction itself will have to be notified and published. Nothing will happen that we would not hear about anyway, but flagging it 21 days in advance could have had serious adverse consequences for the businesses concerned. It follows then that section 10 (c) should also be dropped for the same reasons. Section 10 (c) reads: "the notice referred to in paragraph (a) is published by the exchange concerned immediately on its receipt". That follows from what I have just said.

The notice requirement could be restated to ensure that both notice and dealing took place within the window period. As far as the interim results are concerned, this would also mean that the 21 days' notice would have to be shortened because of existing requirements to deal within 21 days of the announcement.

There is an existing requirement also to deal within 14 days of the annual general meeting. It has been suggested that the most viable requirement would, therefore, appear to be something along the following lines — I am quoting this as a possible rephrasing of the Minister's amendment, with respect: "(a) He gives at least seven day's notice to a relevant authority of the relevant stock exchange of his intention to deal, within the period referred to in paragraph (b), in the securities of the company concerned, and (b) the dealing take place within a period beginning seven days after the publication of the company's interim and ending 14 days after such publication or within a period beginning seven days after the annual general meeting and ending 14 days after that meeting. However, the problems associated with the giving of notice which I mentioned would still not be eliminated even taking (a) and (b) on board.

The position of stock options could alternatively be catered for by amending the amendment on page 91 to read as follows "(b) acquiring securities in a company pursuant to an employee profit sharing or share option scheme." What, in fact, is being done there is the insertion of the words "or share option" in (b) between the word "sharing" and the word "scheme" to read as I have just indicated. This would need to be followed by inserting in (iii) of the same section "in the case of an employee profit sharing scheme" between the words "which" and "all" so that would now read "(iii) under which in the case of an employee profit sharing scheme all permanent employees...", as the Minister's amendment reads.

I assume the Minister knows exactly what I am talking about. There are parts about which I am not sure I know what I am talking myself, particularly in the latter part. I am no expert in this area. It is a very technical matter. I imagine the Minister has had the benefit of all the professional representations that the Senators have had and, in fact, more because he has his own advisers and professional people as well. I view very seriously the concerns of the Irish Bankers' Federation of Nassau House. The fact that they could even come here this morning to underline those concerns again, given perhaps the futility of what we are at here today, shows that they are very concerned about the situation.

I know the Minister — as I understand the procedure this afternoon — cannot accept amendments from us in this House. Is that correct? I understand that to be the position in any case. The Minister, if he so wished, could take on board the points we are making and include them himself, by way of some regulation and/or order or some other mechanism. I make that point with a view to a response from the Minister either to allay the concerns of the Irish Bankers' Federation and point out to us here clearly that they are misplaced concerns or to indicate what changes he himself may make to overcome the concerns as outlined.

We are taking Parts I to V together. I am going back to Part III now for a moment. This is the part dealing with transactions involving directors, again a very important Part of the Bill. I would like to put on the record the fact that there has been widespread support from small businesses for the Fine Gael amendments in this Part to the Companies Bill as tabled in the Dáil. These amendments were designed to limit the practice of banks of demanding personal guarantees from directors when giving loans to companies.

Banks are already charging an interest rate which is about 3.7 per cent above the base rate. This is the largest excess charge in any OECD country. This is more than sufficient to allow the banks to cover the risk of default on loans by companies without demanding security as well. This is particularly important for small companies whose directors are not in a position to offer a guarantee because they are starting out in life — they may be young people who have just qualified or people who later on in life have decided to get into new businesses or form new companies.

The demand for personal guarantees is especially hostile to young people seeking to set up a business because they are unlikely to have had the time to accumulate personal assets. The demand also can create conflict within families. This goes without saying if the family home and other personal assets are demanded by way of guarantee for loan risk. I believe the Minister would have personal sympathy for this case and feel that the banks are adequately catered for in relation to that loan risk by the excess they charge over the base rate for lending money.

We are all aware that the Irish banking system will face enormous competition in 1992. There will be no exchange control system to protect their deposit base. They will not be able to prevent banks from overseas servicing the Irish market. It is time that the Irish banks got their act together and realised that it is the success of Irish business upon which they depend for their own continued survival. An obsession with security, deeds and personal guarantees will be the wrong approach for Irish banking in the post-1992 Ireland.

I agree with the Senator, for once.

There are some matters about which we can actually cross the floor in this House. The Senator would be surprised how many there are if we were just allowed to do so. I would like to support a point made by my colleague, Senator Kennedy, before the sos for lunch. That is a very important point and is evident in the Official Report of the Seanad of the Report Stage some two years ago. That is the query of Mr. Justice Ronan Keane at the time about the constitutionality of a certain aspect of the Parts we are now discussing. Again, not being a constitutional lawyer or an expert on the technical matters we are discussing, I will take it that the Minister understood fully the point made by Senator Kennedy. The interesting thing in reading the Seanad Official Report of the time is that quotations were put on the record from a speech made by Mr. Justice Ronan Keane — to the Limerick Chamber of Commerce if my facts are correct — questioning section 10 (5) of Part II. I stand to be corrected on that. The judge questioned the constitutionality of what we were about.

There is no record in the Dáil Official Report at all, either on Committee Stage or Report Stage, of amending that section, changing that section or the deletion of any part of that section that might remove the constitutional query of it. Interestingly, on reading the Official Report of the Seanad debate, the Senator at the time who supported Senator Pat Kennedy and who queried its constitutionality once the point was made, was the then Senator Mary Robinson. I do not have to say that none of us would like to see this legislation, given its importance to the corporate sector generally, be the legislation on which our new President cut her teeth when it comes to referring Bills to the Supreme Court. I am sure the Minister would not like that to be the case. As there was a question raised about the section on Report Stage in the Seanad originally and since it was not dealt with at any Stage in the Dáil we must look for assurances from the Minister, particularly in view of the fact that former Senator Mary Robinson was concerned about the constitutionality of it.

I support the excellent case put for us all by our spokesman on Industry and Commerce, Senator Howard. I look forward to a detailed response from the Minister. I hope he appreciates the frustration that exists on this side and, I suspect, on the other side of the House in not being able to tease out, section by section, the important issues in this Bill and particularly the important changes that were made to it since it was here seven years ago. Senators such as myself who never had the opportunity to speak to a Second Stage debate on this for the reasons outlined feel particularly hard done by and question the procedure that has been introduced here today of effectively guillotining a most important debate.

If insufficient time is allowed to do justice to an issue in the Seanad it has the same effect as guillotining or stifling debate or as jackbooting a Bill through. I object very strongly to the fact that time was not given for us to study the legislation and to go through the many documents, reports and lists of amendments we received and did not have to do justice to the Bill on a detailed Committee Stage. If the Committee Stage were offered to us today I doubt if I or my colleagues could do justice to it as we only received the material yesterday.

The officials and everyone concerned with it understand how complicated it is. We have four copies of a Bill before us with references to sections and page numbers that go here, there and yonder. We are not even sure which document references are being referred to. We have representations still coming in, hot and heavy, from the professional bodies. Notwithstanding the good work that was done in the Seanad and in the Dáil Committee on Report Stage, there are still many gaps and anomalies which are causing concern in the corporate and financial sector. If professional people who have a thorough understanding of what we are about are concerned about specific issues of the Bill, and the impact it will have on particular aspects although welcoming the broad thrust of it, then those gaps must be closed because it will be a long time before such comprehensive legislation comes before the Houses of the Oireachtas again.

I sometimes wonder what a Minister has to do. We have here a Bill which is urgent and long overdue and which has had probably the most extensive discussion and debate in the Seanad and Dáil that any Bill has had in recent years. Many of the bodies mentioned by other Senators have expressed their urgent concern that this Bill should be brought into law as early as possible. We are very much out of step with our neighbouring island and with European Community legislation.

This Bill is a complicated one. I would welcome having more time, perhaps a few weeks, in which to go through the Bill and tease out the various points. I wish I had been in the Seanad or Dáil when the Bill was going through, but the fact of the matter is that it has been very thoroughly examined. It is now urgently required and at some stage or other you have to call a halt. We are fortunate that we have a Minister who had the determination to see through a Bill that many people considered would never see the light of day. It has come to us now so let us deal with it and get on with the job.

It deals with many matters of great importance and urgency. The decade of the eighties was very much the decade of paper acquisitions and insider dealings which were often praised. It was suggested that in some way they were to the benefit of corporations and companies — they shake them up and take them over, they would do this, that and the other, they would sell off unprofitable parts and so on. In fact it was usually simply a series of transactions to enrich a few individuals which were of very little benefit to the company, shareholders, the employees or the nation concerned. We are back — and to some extent this Bill exemplifies it — to the serious development of companies to the general benefit of the company, its employees and all those associated with it. We have not come far enough. One of our reasons for being so uncompetitive is the fact that in these islands and in western Europe generally we look to the short term rather than to the long term.

In relation to powers, I greatly regret that these powers are necessary. They are draconian powers which allow the use of necessary force in searching a premises. There is power to administer an oath and to take evidence. These are considerable powers, but they are necessary. Present day white collar crime involving large companies is often complicated. These powers are required as are the personnel and technology to comprehensively implement them. It will not be easy. Our neighbouring country with all its resources has found it very difficult to effectively monitor and investigate major company and financial fraud. It is most unfortunate that these powers are required.

I have some slight concern about section 36 and the question of vouching. Perhaps it is a question of english or drafting but I would have thought it is rather difficult to vouch for expenditure which actually has not been incurred. I hope that will be interpreted in a somewhat broader manner than it appears in the section.

I draw attention to section 70. As I said at the beginning, this Bill has been some years coming through the Houses of the Oireachtas. I would think that at the time a decision was taken on 5 per cent in section 70 (1) the Stock Exchange was of the view and the general consensus was that shareholdings of 5 per cent or over should be notifiable. I note that the Minister has, very rightly, taken powers to determine such other percentage as he may so prescribe. I ask the Minister to consider the possibility of making that 3 per cent, which is the current Stock Exchange recommendation in relation to this. There is an anomaly here in that many of our companies are dealt in both in the United Kingdom and in Ireland.

We talk here in this very Bill of the Irish unit of the international Stock Exchange of the United Kingdom and the Republic of Ireland. Irish companies were under the disability that in regard to notifiable percentages, although they might pass resolutions to that effect at their annual general meetings and so on, they were not enforceable in law, whereas the corresponding United Kingdom companies had the backing of law for the recommendations. I am very pleased that the Minister has introduced that. I would make the recommendation that he at least consider the possibility of thinking about 3 per cent of the actual notifiable percentage.

As regards section 108 and a series of related sections, yes, indeed. There are recommendations. So far, they have simply been Stock Exchange recommendations about times of dealings for shares and the circumstances under which directors, company secretaries and such persons may deal in shares. I, too, would have some concern. I think it is very good that specific windows are being spelt out. Indeed, one of the very good things about this Bill is that it specifies the duties and responsibilities of directors and other persons associated with companies. This was badly needed. Very often one had people accepting directorships in the past, perhaps, almost as a personal obligement to somebody, or in the hope of giving a little advice or encouragement and people finding themselves in very invidious situations. Now it is spelt out. It is absolutely clear what the responsibilities are. This was very necessary.

However, in relation to share dealings there is a difficulty here. If I, as the chief executive of a PLC which has dealt on the Stock Exchange, give notice that I am going to deal in the shares in 21 days' time, I can see how that could easily be the subject of speculation as to in what way am I going to deal. Am I going to sell? Am I going to buy? How much? How many? There are a whole series of questions here. That may simply be because under some other Bill the Revenue Commissioners are pushing me to pay some figure and I have to sell a few shares. I do think this could be subject to misinterpretation. However embarrassing that might be to the individual, it has the far wider implication that the very situation which the Bill is trying to avoid — of people having inadequate knowledge in relation to share prices — might be worsened rather than improved. I know there are one or two other saving clauses there, but I think that is an area which the Minister might perhaps, under regulation or otherwise, consider. All in all this is a very thorough, a very excellent, a very necesary and very much needed Bill, and particularly these sections that we are discussing in Parts I to V. I commend it.

Mar a dúirt an Seanadóir Conroy romhan ansin, tá gá mór leis an mBille seo agus tá sé an-phráinneach go gcuirfí ar fáil é go luath. Is rud an-tábhachtach an Bille seo do chuile dhuine sa tír. Feicim tábhacht ar leith leis an mBille seo maidir le comhlachtaí beaga agus daoine atá ag iarraidh dul chun cinn a dhéanamh agus go bhfuil orthu deontais a fháil chun comhlachtaí a bhunú. Tá sé tábhachtach go dtuigfeadh na daoine seo céard iad na forálacha nua atá sa Bhille seo agus go mbeadh a fhios acu céard atá ar bun acu lena n-aghaidh. Mar a dúirt an Seanadóir freisin, b'fhearr leis féin go mbeadh níos mó ama aige agus againn uilig chun an t-ábhar seo a phlé, agus tá sé ag rá: déanaimis rud éigin anois, cuirimis chun cinn é agus i gcrích. Ach is é an pointe atá agamsa ná go bhfuil críoch á chur leis an mBille seo sul má bhíonn deis ag mo leithéidse fiú amháin tosú air.

Is Seanadóir nua mé sa Teach seo. Ní fhaca mé riamh go dtí an lá inné na cáipéisí a bhaineann leis an mBille seo. Ní raibh aon ghá ann go bhfeicfinn mar ní raibh aon bhaint agam leo. Fuair mé doiciméid chomh tiubh sin a bhfuil an oiread sin ceisteanna ann futhu agus an oiread sin le plé. Chomh maith leis sin, feicimid doiciméid mar seo go bhfuil an oiread sin leasuithe le déanamh orthu, agus anois deir an tAire ar maidin go mba chóir dúinn na doiciméid sin go léir a chur le hais na gceann a cuireadh tríd an Seanad cúpla bliain ó shin.

Tá mearbhall orm. Tá mé sa chaoi anois nach bhfuil a fhios agam mórán faoi na rudaí sin, bíodh is go bhfuil iarracht déanta agam le cúpla uair a chloig eolas a chur orthu agus labhairt futhu. Más mar sin atá an Seanad seo á reachtáil in ionad bheith ag iarraidh cúnamh a thabhairt dá chéile, is trua liom gur mar sin atá sé. Ba chóir go mbeadh trua ag an Aire do mo leithéidse anseo atá ag déanamh iarrachta labhairt faoin mBille seo, a bhfuil suim ar leith againn ann. Is beag duine sa tír seo nach bhfuil baint aige le comhlacht nó bunú agus riaradh comhlachta.

Tuigim, freisin, nach ceadmhach leasú a mholadh anseo inniu. Bíodh sin mar atá, mar sin é nósmhaireacht an Tí. Ar a laghad ar bith, ba chóir go mbeadh seans againn, tar éis na rudaí a thuiscint agus a léamh, moltaí a thabhairt don Aire sa chaoi is go mbeadh sé in ann athmhachnamh a dhéanamh agus b'fhéidir athruithe a dhéanamh. Maidir le hailt agus ranna an Bhille, níl mé in ann aon chiall a bhaint astu. Níl a fhios agam an bhfuil máchail orm féin, an bhfuil easpa oideachais orm, nó céard atá orm. Tá iarracht mhacánta déanta agam ó thráthóna inné greim a fháil ar an ábhar seo le go bhféadfainn labhairt faoi anseo inniu, ach caithfidh mé a admháil gur theip orm an ghreim sin a fháil. Tá an oiread sin leabhar i gceist, alt, fo-alt, litreacha agus uimhreacha, nach bhfuil ceann ar bith acu ar aon dul le chéile.

Is féidir leis an Aire, a bhfuil daoine ar a chúl a thugann cúnamh agus tacaíocht dó, agus a bhfuil an Roinn Stáit uilig taobh thiar de, teacht isteach anseo agus é seo a chaitheamh os ár gcomhair, ach tá ar mo leithéidse ciall a bhaint as. Cuireann sé iontas mór orm go bhfuil gnó an tSeanaid á eagrú ar an gcaoi seo, nach bhfuil ceart nó cothromaíocht le fáil ag Seanadóirí lena dtuairimíocht a nochtadh, ceisteanna a chur agus freagraí a fháil. Mar shampla, léigh mé doiciméad amháin ina raibh tagairt do dhuine a raibh comhlacht aige——

Gabh mo leithscéal, a Sheanadóir. I am most reluctant to interrupt you, ach ba cheart duit labhairt ar pháirt I go dtí páirt V sa Bhille. Tá tú ag caint ag ginearálta. In other words, for the benefit of those who do not have a translation service, I have been giving you an enormous amount of latitude and, in fact, all you are doing is just repeating the criticisms that have been levelled by your colleagues in relation to why the Bill has been taken at all. I have listened and you have not yet addressed the Parts of the Bill. You have just been talking in general terms.

B'fhéidir go bhfuil cuid den cheart agat sa mhéid go bhfuil mise chomh measctha is atá tusa maidir leis an mBille. Táimid go léir measctha. Níl a fhios againn céard faoi a bhfuilimid ag caint.

Acting Chairman

Níl. Is é an rud atá i gceist anseo ná Cuid I go dtí Cuid V den Bhille ach tá tú ag caint go ginearálta.

Thuig mé go rabhamar ag dul a chaint faoi Chuid 1 go dtí Cuid V. An bhfuil? Tá mise ag caint faoi uimhir 53 ar leathanach a hocht. Tá sé sin idir a I agus V.

Acting Chairman

What you have been saying in general, with respect, has been repetitious and, under Standing Orders, it is the Chair's duty to point out that repetition is to be avoided, and in that context——

Shíl mé go raibh tú ag rá liom nach raibh an ceart agam ar chor ar bith. Maith go leor. Tá mé ag caint anois, mar eolas daoibh, ar leathanach a hocht den doiciméad seo uimhir 32. Tá mé ag iarraidh moladh a chur os comhair an Aire faoin gceann seo mar nach féidir liom aon leasú a mholadh. Is cuimhin liom nuair a bhí mé ag déanamh sin, bhí sé ráite go mbeadh cead ag duine £2,500 a bheith aige agus gan a chur in iúl cá has a dtáinig sé. Feicim go bhfuil sé athraithe sa cheann seo agus nach bhfuil sé i gceist ar chor ar bith ann. Iasachtaí, mar shampla — loans mar atá ráite anseo — tá mise ag ceapadh gur mór an feall é seo ar dhuine ar bith a bhfuil comhlacht beag aige. Tá £2,500 i gceist, a léigh mé, i mbilleog bhán amháin ach ní luaitear anseo é; deich faoin gcéad atá i gceist sa cheann seo. Nuair a léigh mé an bhilleog bhán ba léir dom gur glacadh go hiomlán leis ag an gcoiste. Níl a fhios agam mar sin cén fáth nach bhfuil sé istigh anseo.

Tá rud eile ann a bhaineann leis sin agus is trua nár glacadh leis an moladh a bhí ann ó thaobh gealltanas pearsanta de. Tá sé le léamh nach féidir glacadh lena leithéid anois. Tá daoine ann a bhfuil comhlachtaí beaga acu agus cuireann an riail bac orthu ó thaobh forbartha de, agus go leor comhlachtaí taobh thiar den tSionainn, is comhlachtaí beaga iad. Is amhlaidh an scéal sna Gaeltachtaí ó thuaidh agus ó dheas maidir le comhlachtaí beaga. Bíonn orthu sul má fhaigheann siad deontas Stáit comhlacht a bhunú agus, de réir an ailt seo sa Bhille, is mór an laincis a bheidh orthu feasta.

Anois, céard faoi eachtrannaigh atá i gcomhpháirtíocht le daoine as an tír seo agus iasacht i gceist ag an gcomhlacht; go mbeadh iasacht le fáil ag duine de na stiúrthóirí, ach b'fhéidir nach as don tír seo nó fiú tíortha an Chomhphobail cuid den na daoine. Mar sin, ní thagann siad faoi rialacha nó dhlíthe na tíre seo nó an CE. Cuir i gcás go raibh an chuid is mó de na scaireanna ag an eachtrannach seo, an bhfuil aon treoir ag an Aire dúinn faoi cén chaoi gur féidir le comhlacht sa tír seo atá comhdhéanta de, b'fhéidir, eagraíocht Stáit, daoine phríobháideacha agus eachtrannaigh feidhmiú faoi alt 32? An bhfuil aon bhealach ann, an féidir labhairt leis na daoine seo i dtaobh an ruda seo. Mura bhfuil siad in ann gealltanais phearsanta nó barántas pearsanta a thabhairt faoin alt seo, cén stádas a bheidh ag an mBille, nó cén stádas atá ag an mBille.

Léigh mé freisin áit éigin anseo faoi chomhlachtaí beaga a chaithfidh clár-leabhar a choinneáil agus gach rud a scríobh isteach ann — registration book. Samhlaigh daoibh féin cúpla duine a thagann le chéile le comhlacht beag a chur ar bun, agus tá sé sách deacair an t-airgead a fháil lena dhéanamh, gan a chur san áireamh gach rud a scríobh síos. Tá sé mícheart go mbeadh orthu cuntais a choinneáil. Sin rud nach ndéantar, nach bhfuil á dhéanamh. Níl a fhios agam cén chaoi a mbeidh an tAire ábalta súil a choinneáil ar gach comhlacht sa tír, idir bheag agus mhór, idir phríobháideach agus phoiblí le bheith cinnte de go gcuireann siad gach rud isteadh a bhaineann leis an reachtaíocht, le socruithe a dhéanamh a bhaineann le clárú ainmneacha, agus mar sin de.

Níl dabht dá laghad agam go bhfuil an Bille seo fíorthábhachtach ach ceapaim faoi chuid de na leasuithe atá anseo, go mórmhór idir Cuid I agus Cuid V a bhfuilimid ag caint futhu anois, go bhfuil siad ródhian ar an bhfear beag príobháideach atá ag iarraidh gnó dá chuid féin a thosú. D'iarrfainn ar an Aire breathnú air sin agus b'fhéidir go speisialta ar an ngreim atá ag na bainc ar na daoine beaga seo. Sul más féidir leo tosú, caithfidh siad barántas a chur ar fáil, agus nuair atá siad ag cur an bharántais ar fáil, tá siad ag ísliú na cumhachta atá acu le dul chun cinn. Ba chóir go mbeadh bealach éigin ag an Aire le go bhféadfaí cúnamh a thabhairt don chomhlacht beag sin atá ag déanamh a seacht ndícheall dul chun cinn. Tá roinnt rudaí eile sa chuid seo den Bhille nach dtaitníonn liom ach ní féidir liom iad a chíoradh anois, mar dúirt an Cathaoirleach go raibh athrá á dhéanamh agam. Tá an ceart aige ach níorbh fhéidir a rá sách minic go bhfuil sé scannalach nach bhfuil aon deis againn Bille mar seo, atá chomh tábhachtach sin, a scrúdú go mion, leasuithe a tharraingt amach as agus iad a chur faoi bhráid an Aire anseo. Ní hé sin an chaoi le gnó an tSeanaid seo a reachtáil ach sin atá déanta orainn anseo inniu. Is trua liom go bhfuil sé mar seo, ach beidh tuilleadh le rá againn de réir mar atáimid ag dul ar aghaidh.

May I begin by welcoming the Minister for Industry and Commerce, the Leader of the Progressive Democrats, to the House here today and to congratulate him——

Before you abolish it.

I will come to that, Senator, because you referred to it earlier. In that event it would be quite appropriate for me to refer to it. I wish to congratulate the Minister on this piece of legislation which is before us today. Yes, it may be complicated but it has been refined over several years. The time has now come for it to be on the Statute Book. Very substantial improvements have been made. It surprises me that the people who are protesting about not having had adequate time to study the Bill as it came to us from the Dáil——

Yesterday.

——could not have studied the Select Committee proceedings and the other proceedings which have taken place over an extended period of time.

Three of those are missing.

Acting Chairman

Please, Senator Doyle, I would appreciate your not interrupting him. Please do not encourage Senator Doyle, Senator Dardis.

I never wished to encourage Senator Doyle.

She is showing off.

The Progressive Democrats are very prickly today.

I can only make one contribution to this debate, but Senator Doyle seems to be able to make several. The question arises as to how much more refinement this legislation requires before it can be allowed to fulfil the very important function which it sets out to do, and that is to regulate the affairs of business in this country to the advantage of the people as a whole and not to the advantage of a select, wealthy, influential minority. I would submit to you, Sir, that this Bill is not in need of any further amendment. I do not share Senator Doyle's sense of frustration. I am not a frustrated person. She may well be, but I do not share her sense of frustration. There is nothing substantive that I can see in this Bill which is in need of amendment. I cannot really understand how it can take six hours to restate the one point over and over and over again.

Reference was made to the fact that this party wishes to see this House abolished. Our position on that is a matter of public record. It was reemphasised on the first day in which I and my colleagues were in this House and it has been reemphasised on several occasions within this House since. What has happened today reinforces all the arguments which have been made during those contributions. It is, and it always has been, our position that the Seanad is an irrelevancy. It is at this stage beginning to suffer from ossification. I do not mean that in the seasonal sense; I mean it in the literal sense. Nevertheless, we do realise that it is an institution of the State, that it exists, that it is here and that it would require major constitutional reform, to which we are committed, to have it abolished. We also recognise that the vast majority of all the parties within this Oireachtas do not share that view. While it is here, while it is a democratic institution of the State and while we are a political party, we will use this institution, along with all the other institutions——

Then treat it with the respect for its integrity which it deserves.

Acting Chairman

Senator Dardis, I have given you sufficient latitude to expound a party political point. I would now respectfully suggest you address yourself to the matter at hand.

I would appeal to what I know to be your sense of fair play in allowing me some of the latitude which was extended to Members on the other side of the House during the course of this debate and in some of the references they made to my party. In that respect I will say to Senator Ryan, who I understand could not be with us this afternoon having made his contribution this morning, that we have contributed out of all proportion to our numbers within this Chamber to the business of this House. We will continue to do so.

As I said, I do not really understand why it is going to take two days for the people on the Opposition benches to make what is essentially the same point and not to refer in any substantive way to the content of the Bill. It is quite straightforward. Its objective has been achieved, that is, that business must be accountable to the laws of the country within which it operates.

It is quite clear that there are businesses within this country who have evaded over the years, who have got away with large improprieties and who have defrauded people and the State. In this respect, if the Bill makes sure that that type of activity discontinues, it is to be wholeheartedly welcomed by any people from any side of this House. I think it was John B. Keane who said in the play "The Field"— I do not know if it is in the film but it is certainly in the play — that there is "one law for us and there is one law for them." I think it was the Bull McCabe who said it. There was one law for the rich, the teachers, the doctors and the solicitors and there was another law for the rest of the people. It was submitted here this morning that the business community did not support this Bill. I would not go along with that at all. Anybody who is running his business in a legitimate and in a proper fashion would support the content of this Bill. It would stop some of the practices which are being foisted on legal business people who operate their businesses properly and put them out of business. We have had plenty of examples of what that type of activity can do within the agricultural sector over the years.

I cannot understand the philosophy which says that it is all right to defraud in large things. It is all right to move money about, to evade tax or to evade responsibilities to the community. I am sure some of those people will sit around the dinner table and lecture young people about the disadvantages that youngsters have in Tallaght, how appalling it is that they should steal motor cars, and say that they should be jailed for it. If somebody should be jailed for stealing a motor car, how very much more should they be jailed for stealing millions?

In relation to the sections of the Bill which are before us — Parts I to V — it must be very welcome that management is responsible, that that responsibility extends to other connected persons outside the general management of the company, that devices to run for cover cannot be availed of, that an inspector can be appointed who can investigate fully the affairs of a company, that small investors are protected, that there is a right of entry to premises to ensure that the law is complied with, that privilege cannot be used as an excuse for evading responsibilities, that inter-company loans and that holding companies cannot be used as devices for hiding the reality of the situation from people, and that people can be held personally liable for improprieties which take place in relation to the conduct of a company. It is a matter of national scandal that people can fold up companies, go to ground, avoid paying their taxes to the State and their bills to their creditors, and within months be up and running again and come away with a fat sum in the bank. That cannot be defended and this Bill attempts and will go a long way towards making sure that those things do not happen. It is not the intention of the Bill to inhibit business but it helps to ensure that those who operate ethically are not put at a competitive disadvantage.

I welcome the provisions in relation to the notification of interest and in relation to referral to the DPP and I welcome the penalties which are in the Bill in relation to avoidance and so on. It is to the Minister's credit that the Bill has been altered, that it has been improved, and that it is finally, with his initiative, going to come onto the Statute Book and is not going to circulate from one Chamber to the other indefinitely in Limbo. Let us be done with it and let us put it into law.

Broadly speaking, I welcome this Bill. The general idea of it is good. Many of the changes which are being introduced in the Bill are highly desirable. Senator Dardis saw fit to compliment his leader and the Minister for Industry and Commerce and I am sure the House will not mind if I make reference to the fact that a former leader of our party, a former Minister for Industry, a man who represented the same part of Dublin that I have ambitions to represent, the late Frank Cluskey, made a major contribution to formulating the legislation, to drafting it and all the rest of it. The Bill did run into a political bunker and various golfing problems of a political nature prevented Frank from being able to play the ball out of that bunker. Some of those are becoming known as history unfolds and I am sure there is a lot more to be told. We look forward to the full story making its way into the public domain, as it were.

I suppose our main reservations and criticisms of the Bill are that in some areas it does not go far enough. Specifically we would have liked to see, perhaps, a more extensive provision in relation to groups of companies and how they can be manipulated to allow people to avoid their legitimate obligations, the business through which some industrialists can form a whole series of companies, load their debts into one and then, as it were, liquidate one and allow the others to continue. That type of carry-on should be prevented in a more explicit manner than the Bill does.

In relation to the fines and deterrents which are provided for in the Bill, we would have liked to have seen the Minister go much further than he has gone. His party colleague, Minister Mary Harney, and her colleague, Minister Flynn, have gone as far as making provision for fines of £10 million, if I remember rightly, in relation to environmental protection. I would have liked to have seen Minister O'Malley follow that PD headline and provide for fines of that magnitude and maybe even more in relation to this legislation. That would be entirely right. Indeed, I would prefer to see an unlimited capacity for fining in relation to what is involved here because the amounts of money which are at stake in some of the large companies are so vast that fines should be expressed in terms of the resources of the company rather than in definite sums.

I would like to have seen a companies investigation commission provided for in the Bill rather than having the Minister's own Department being primarily responsible for policing the provisions of the Bill. That would be very useful and desirable for a number of reasons, one of them being that it would allow a commission to build up expertise in a manner that is going to be difficult for a Government Department to build up expertise arising from the nature of Government Departments, the way resources can be dispersed within Government Departments. I would have liked to have seen a greater provision for full and frank disclosure of all the relevant facts to the workforce in relation to the provisions in the Bill. Too often in the past employees of companies have found for the first time that the company was seriously in trouble when they read about it in the newspapers. That is an appalling commentary on the way we order our business. The various financial interests have a good deal more protection in many cases than the workers in industry. The workforce in an industry have a very legitimate right to know and to understand if things are going badly in a company and to have a fair warning of what is about to occur so that they can move to protect themselves either by looking for employment elsewhere or by forcing restructuring and necessary changes in companies.

Another possibility that I would have liked to have seen developed is the capacity for the revocation of the registration of companies, the capacity for people to be prevented from registering. That might be an appropriate deterrent in some cases.

The question of white collar fraud is one which has bothered and concerned a large number of people for a long time now. It is difficult I suppose to be satisfied that the capacity of white collar fraud can ever be totally excluded. There is the whole science of creative accounting which has gone on in many businesses for a long time. When the rich commit fraud it is sometimes referred to as eccentric, when the poor do the same thing they are redefined as robbers.

One of the items which Frank Cluskey did include in the earliest versions of the Bill was, of course, a provision whereby companies who make contributions to the political funds of parties would have to declare that that happened. I regret that that is not included in this Bill. I am a bit surprised that a Minister, such as Minister O'Malley, the Leader of a party such as the Progressive Democrats, who seem to be very anxious for full and frank declarations, full disclosures, has not included such a provision in the Bill. It would be very desirable that people, when they are voting for certain parties, should know who is funding those parties and that they would be in a position to make up their own minds as to what was in it and the reasons why corporations are prepared to put large amounts of money into political parties, and to do so under the bed in the certain knowledge that what they are up to will not become publicly known.

I would welcome a change in that area. It is long overdue. All of us who are here and who are in politics know only too well that money talks and money talks loudly and clearly at election time. The public out there who are voting for different political parties would be very interested and would benefit a lot from knowing who is putting the money in and who may and may not be calling the shots. It would be useful and valuable that those people would be identified. One of the things which I welcomed was the behaviour of Mr. Tony Ryan in relation to his company when at one stage he was confronted——

On a point of order, is this covered in the Bill?

I would hope so. I would suggest this is annoying Senator Ryan. I suspect I am getting very close to the bone.

Could the Senator indicate what part of the Bill he is dealing with?

I would have thought it should have been covered in Parts I to V. I am saying that I regret that this material has not been included in the Bill. I have the data downstairs in a specially prepared amendment which unfortunately I did not carry up with me on the basis that I was told that amendments would not be allowed. Certainly I am prepared to go down and get the day and date as to where I think the Bill can be expanded and that precise section where it is not adequate in terms of how far it is going. I suggest that perhaps Senator Ryan is being a trifle disingenuous.

Acting Chairman

I have to indicate to you that we are dealing with Parts I to V and you have not answered my question.

Maybe I have not answered your question but I would have thought that it fell within the broad ambit of what is covered in Parts I to V and how they might have been expanded further than they are at present. That is an important point and it is a major deficiency in the Bill. I am not sure that too many on all sides of this House, with the obvious exception of ourselves and some of the people behind us on the Independent benches, want to open up the cans of worms which exists in relation to how people put money into political parties. I was about to say that I welcome the attitude of Mr. Tony Ryan and his company who came out straight and said what they gave to the various political parties when he was confronted at one stage about bankrolling some group or another. Mr. Ryan said exactly what he had put in and I welcome that attitude. I wish a lot more companies would do so.

It is certainly quite questionable why companies would want to maintain secrecy in relation to what they contribute to political parties. Where is the problem in doing so? It certainly is not against the law. If people deal with companies they might as well know who is calling the shots and what the full story is in relation to how political power is exercised in this country. It is somewhat disturbing when you hear of people going with big bags to upstairs rooms in hotels to have secret deals and secret meetings in relation to the funding of political parties and where there are solemn guarantees given that nobody will ever breathe a word about it except the four or five people who have this wonderful knowledge.

Is that what you do?

We do not do it. You know very well, Senator McKenna, that we do not have people coming to put money into our party. When money is put in it is upfront.

(Interruptions)

Acting Chairman

I would ask you to confine your remarks to the sections of the Bill before us.

In relation to the contributions of unions that is upfront. It is in their accounts. There is no messing about it. It is there for anybody who wants to read it. I may have said enough on political funding. I am, obviously getting a lot of attention for this contribution, but for many of the things I say nobody seems to wake up or take any notice. People do not seem to be too bothered as to whether I am in order or dealing with the relevant section of the Bill, but suddenly when I talk on this topic I trigger a great anxiety and interest in Standing Orders and proper procedure.

Amusement.

It is not just amusement. People want to stop me. If I were amusing they would want me to go on.

Acting Chairman

I have to remind the Senators that the Chair is impartial.

I am not suggesting that the Chair is anything other than impartial. I am referring to the interest which has come from my colleagues on the far side of the House. Far be it from me to suggest that you are anything other than impartial. It is the interest that has been triggered and the way my colleagues on the other side have drawn your attention to the possibility that I may not be fully in order.

Finally, the amount of time which has been given to consider the Bill is rather inadequate. The Bill received yesterday for a day's consideration had something like 80 pages of amendments. That is not adequate considering we have to go back to the original Bill to get details to fully understand the whole matter. I wish a little more time could have been given so that we could all consider in more detail what we are going to say and so that I could have had a chance to bring my suitcase full of amendments and give day and date for every little item I was referring to.

I would like to welcome Deputy O'Malley, Minister for Industry and Commerce and Leader of the Progressive Democrats to the House. It is very nice to have him here. Could I just refer to Senator Dardis. I never went along with the Progressive Democrats idea of getting rid of the Seanad but there is no doubt that the case was very well made here this morning. I have never in my short time here seen anything quite as bad as this morning. It was the greatest waste of time. The people who were involved in it have a lot to answer for.

What section is the Senator referring to?

I am just making a point. Others made a point and I am allowed make that point.

You need not worry. If you are a gambling man I would say the Progressive Democrats will be gone before the Seanad.

I am delighted the Minister has finally got to this stage and I hope he will see the Bill through the Oireachtas. After this morning I thought it was going to take another few years to get it through. For years people have been called for the stamping out of many of the malpractices this Bill sets out to address. What we see here is a radical overhaul of Irish commercial law. When the Companies Act was enacted in 1963 there were approximately 11,000 registered companies. Today we have well over 100,000. It is obvious it was time for a radical overhaul of the companies legislation.

Over the last number of years unfortunately we have seen an increase in crime and this includes white collar crime where the commercial standards have been allowed to decline. I saying that, I have to emphasise we are talking about a tiny minority of cases where people in business abuse their positions. The vast majority of people in business conduct their affairs honestly and honourably and they have no intention of defrauding their company, its creditors or anyone else. That said, there is no doubt that a fundamental reform is needed.

The main thrust of this Bill is to encourage and protect enterprise by discouraging the reckless and the dishonest from being involved with limited liability companies. As we all know, over the past few years confidence is vital in the business world and the institutions of commercial life. We have seen huge political changes in Europe over the past 15 months and people are moving towards a free enterprise system but such a system must be seen to be free of malpractice and to have the confidence of the general public. We all strive to eliminate, deter or punish malpractice. Obviously some companies get into trouble through no fault of their own or through bad business judgment but with no fraud intended. This Bill will have a deterrent effect so that, faced with the choice of doing business unscrupulously on the one hand, or acting honestly or honourably on the other, they will chose the honest option as being in their best interest.

Since the Bill was originally published there has been an avalanche of submissions to the Department of Industry and Commerce from interested parties. I gather they have come from every conceiveable strand of the commercial spectrum, business organisations, trade unions, accountants, lawyers, ordinary companies and individuals. I gather that many of these submissions were very extensive, wide-ranging and considerably detailed.

We are lucky that in August part of this Bill was enacted and we have seen how successful that has been. Great credit is due to the Minister and the Government in bringing that in that section of the Bill. Only this week we have seen how a very important company with respect to agriculture in Ireland has been saved and, hopefully, it will continue well into the future.

Part V of the Bill deals with insider dealings. At present there is the situation where directors of companies who are also shareholders of that company must inform the chairman if they intend to sell shares in that company. The chairman may not allow a director to sell those shares if he is of the opinion that the director has information which may be to his advantage and not available to ordinary shareholders. Some of the parts of this section could put directors who happen to be shareholders at a disadvantage with regard to selling their shares. As far as I am aware, chairmen are very rigid at present in their enforcement of this rule. I would not like to see the situation where directors who happen to be shareholders are put at a huge disadvantage.

I also agree with Senator Conroy. If it is posted and people do know, it will be the small shareholder who will be panicked into wondering whether a director or a chairman is buying or selling shares. I have not heard of a situation over the past number of years where there has been anything wrong with directors selling or buying shares. The rules that are there at present are working effectively. Those suggested in the Bill are too draconian and I do not see why they should be put into force. All in all, I believe this Bill is very necessary and I am happy it is before the House and I hope it will be enacted as quickly as possible.

I would like to welcome the Minister to the House and I am delighted that the Bill is eventually reaching fruition after such a long gestation period. I want to refer to just one small item and it has to do with share options and insider dealing. There are, as I am sure, the Minister is aware, employer shareholding schemes. These are special option schemes which are approved by the Revenue Commissioners and which are in operation in over 130 companies in Ireland. I believe it is going to be very difficult for people who have these share options to exercise them without being accused of insider dealing as the Bill stands. I would just ask the Minister to look into that and maybe make some amendment that might take care of that.

It gives me great pleasure to welcome this Bill. It is probably one of the most overdue pieces of commercial legislation ever to be introduced and I would like to congratulate the Minister for, as a colleague of mine said, bringing it by the scruff of the neck through the Houses of the Oireachtas.

The Companies Act, 1963, provides a very valuable and comprehensive framework for managing, operating and controlling commercial organisations and it was a great help in providing the legal framework within which limited liability could operate. The 1963 Act took its philosophy and principles from the 1948 UK act and, although that was very good for its time, it was very quickly outpaced by developments in the marketplace and the significantly changed role of business in society. The 1963 Act was really essentially biased towards shareholders and directors. The widespread abuses of the privileges of limited liability and other protections provided by previous Companies Acts have made it imperative to introduce this new legislation. That original concept of business as solely equity based and existing primarily for the benefit of the shareholders is long gone.

In this world of ours, with all the changes in communications, education, consumerism and social re-alignment, business will only survive if based on the stakeholder concept. That is, based on the premise that there are four key stakeholders in every business operation — the shareholders, the employees, the customers and society in general. The role of business is now to satisfy as far as possible all the legitimate aspirations of these key stakeholders and not just to provide benefits for the shareholders at the expense of all the others. I am very pleased to see that the Companies Bill now before us goes a long way towards protecting the interests of all the stakeholders rather than being exclusively shareholder based.

The controls introduced to cover transactions involving directors are a vital protection for the other stakeholders in the business. The unveiling of the protection of law for limited liability in cases where it is abused is a very valuable advance in terms of protecting the interests of all the other participants in business. It does ensure that errant directors can and will be held responsible for any abuse of the powers entrusted to them. The disclosure of interests requirement ensures that there is full awareness by all the stakeholders in the business of the vested interests of others in the activities of the business.

The abuse of privileged information obtained by officers and others in the company is very well dealt with in Part V of the Bill governing insider dealing. Insider dealing made lots of money for people in the past and in the worst days of business it was even seen as a respectable way to make money. I am very pleased to see that this Bill treats it — as it is — as a criminal offence punishable by fine or imprisonment. It is no different to larceny or robbery.

This is a very comprehensive piece of legislation and, taken together with the range of consumer and labour legislation which has been introduced over the past number of years, it provides a very good framework for the proper regulation of modern business in a way which provides fair and equitable protection to all the stakeholders. In general terms I am delighted to see the passage of this Bill through the House.

I would like to thank the Senators who have spoken. I will try to deal with as many of the points as I can in the course of replying to this, but I will not be able to deal with every single one of them. Perhaps I will not be able to go into all the detail that might be wished. There are constant complaints about the procedure that is used here and about people being confronted with large amounts of documents in the last day or two. That is the procedure of this House, it is the convention of how these are dealt with. This is a Seanad Bill and if it creates, on its return to the House, a lot of problems for the House the question really has to be asked whether Bills should be initiated here. I have always believed they should. I have often, over the years, initiated many of them myself. I think that this is perhaps not a good example of what the normal procedure is in the sense that this Bill has been so widely recast, by myself particularly, over the last year or 18 months that the amendments and additions to it since it has left this House are very substantial.

It is wrong to blame me or my Department or the Government or anybody else. We have to deal with the procedures here as they are. We cannot change them. So far as being confronted with a lot of papers in the last few days is concerned, I am quite sure that that would be a valid complaint if these were all provisions, amendments or Bills that were being introduced, de novo and that suddenly they appeared from me or my Department without any notice. But this debate has been going on for just short of four years between the two Houses. All these amendments are constantly being debated in one House or the other. The reports are being published all the time, all the amendments are constantly being published and the acceptance or otherwise of them by the other House is constantly being published and for those who are interested in this topic — and I accept that that of course is a limited minority — it was possible for them to keep up to date on every point that arises here today and to have been able to do so over a long period.

Senator Doyle and some others made reference to the strong representations being made by, God bless us, the Irish Bankers' Federation in the last couple of days and how worried they were. I am not sure whether it was the Irish Bankers' Federation or one of the other interest groups concerned but they arrived in my Department yesterday, I am informed, frantic about a particular provision that is in this Bill which they only came to hear of yesterday morning and on checking our records we discover that the particular amendment concerned, which was long since adopted by the Dáil, was published first in November, 1989, precisely 13 months ago; but there were accusations yesterday that we were trying to slip something quickly across on the public. That is not the case.

I accept that people find it difficult to cope with such volume and I am fortunate that I have people who are able, on my behalf, to cope with the volume. I would ask Senators to bear in mind that none of this is new, that some of it is four years old and that all of it has been constantly publicly debated in one House or the other over the last four years. Indeed the genesis of the Bill is far from new. Senator Upton referred to the part that the late Deputy Cluskey played in this Bill. I am reminded in the Department that this Bill that is here now began with an idea or a request of mine to the Department in 1982 to abolish, as I so simply put it, "the phoenix syndrome". I thought that was a question of a section or two. When the Department got down to it, it was ten or 12 sections but by the time they had the ten or 12 sections ready, there were all sorts of other things that quite legitimately had to be done.

This Bill is the biggest snowball, I think, in legislative terms that has ever gone through the Oireachtas because it has gathered a great deal from the time it started to roll, which was as long ago as 1982. Senators will therefore appreciate my anxiety to try to have it enacted, not to go back and start all over again, section by section. If we do, all kinds of additional sections are going to have to be brought in from a domestic point of view; and not just additional sections but a whole lot of additional directives of the European Community will have to be added to it. Some of those are 20 and 30 sections long.

This Bill could then get itself into a situation where it could never be enacted. If all these changes were made here I would have to go back to the Dáil with them all, we would have the same there and it would be back here — it would be a case of perpetual motion. I have to determine that we will cut it off here now, ask the Oireachtas to agree to cut it off here now. Otherwise, we will be in a state of perpetual motion with it. I propose, early in 1991, to start the next Companies Bill, because it is going to be necessary, in spite of the hugeness of this. I will never again bring into the Oireachtas a Bill as big as this, because it is in danger of the very fate that this almost suffers now of perpetual motion. We will have to do them in small single issue Bills, to use the phrase at the moment, because they are too complicated. This does broadly bring our law up-to-date. It certainly deals with the major abuses which are very serious.

If I could refer to just one of the later speakers — and I will go through the thing seriatum afterwards — I heard Senator Ryan say that the present regulations on insider dealing were being complied with and he did not hear any complaints about directors and others dealing wrongly or dealing in breach of them. I have to say to the Senator there are no regulations, so they cannot be complied with. They may not be breached either, but there are none. There is no law against insider dealing.

The stock exchanges.

In regard to the stock exchanges, it is a matter for themselves. So far as the public and the law is concerned, it is neither a civil nor a criminal wrong to engage in flagrant abuse of one's privileged, unique, inside information. That is very wrong. It is absolutely urgent that we do not remain one of the few countries with a stock exchange, with dealings in public shares, that does not have control over that situation.

If I could just deal with a couple of the general points briefly. Senator Upton said he thought the fact that there were fines of millions mentioned in the Environmental Protection Agency Bill yesterday should be, as it were, an encouragement to me, or that I should replicate that with fines of millions here. The fines here are all substantial and they have been substantially increased. The highest fine I see is in respect of insider dealing at £200,000, but there is also the little matter of ten years imprisonment. That is by far the more relevant deterrent. Nobody has ever gone to prison in this country for this kind of activity, even though we see quite significant numbers of significant people in prison in Britain at the moment; and we even see someone from our own jurisdiction in prison in Northern Ireland at the moment for something which was done on a much wider scale down here but which has been ignored by the relevant authority here.

I would like to take Part II and some of the points that were raised in regard to it. Senator Howard said that the Special Committee of the Dáil did not deal with Part II. That, of course, is right; but the committee of the whole Dáil dealt with it. On Part II alone, it devoted two and a half days, which was a long time to devote to a relatively short Part by comparison with some of the others. So it was very fully examined there. The same Senator asked whether this covers foreign banks. Of course, it does not; its jurisdiction is limited as to what goes on within Irish borders. We cannot legislate for foreign people or companies. In so far as they are established here and operating here, they are subject to the law.

I agree with Senator McCarthy when he says that the changes introduced in Part II should overcome the various difficulties that have clearly arisen under the 1963 Act and which are calling out for rectification.

Senator Howard mentioned, under Part II, in reference to section 20, that there is no definition of premises. There may be one, but I have not had the opportunity to check whether there is a definition in the 1963 Act which is read together with this one. It is impossible to define every phrase or word that is used in a Bill, particularly in one as long as this. The normal use of that word, I think, would be appropriate.

In any event, I do not think the Senator or any Senator need have any undue concern about it, because of course any searching of premises for documents or whatever that goes on can be carried out only on the warrant of a district justice. The Senator was concerned, as were some others, whether private houses were subject to the possibility of such a search. They are, of course; otherwise every corporate crook would carry on his activities from his house rather than from his office. Of course, they are subject to it, or in respect of any other form of premises that he happened to be on or he happened to be keeping documents in. A warrant, as I understand it, would have to be got in each case.

Senator Kennedy raised the question of subsection (5) of section 10, where he referred to comments made at the Limerick Chamber of Commerce by Mr. Justice Keane, who was then in the High Court and now, if I am not mistaken, in the Law Reform Commission. I cannot stand here, nor can any Minister, and give a copperfastened guarantee that every section and every subsection of every section in this Bill is constitutional. There are many Bills that waltz through this House, everyone thinking highly of them, and are found to be unconstitutional afterwards. There are others whose constitutionality was doubted at great length in this and the other House which were found perfectly sound afterwards. It would be very foolish to do that.

However, as Senators will be aware, the procedure on the drafting of this or any Bill is that when it is drafted it is looked at by the Attorney General and his people from a constitutional point of view; and of course it is not let go further by them if he or they were to have any doubt about the matter. Again, when substantial amendments are made, as is the case in this Bill, it is looked at again, of course, that procedure was followed in this case. That is no certain guarantee. I have read and re-read a few times a few of the points that were made about subsection (5) of section 10. It makes specific reference to the High Court, and the High Court only, being the body who would impose a penalty if somebody did not comply with the requests of inspectors or investigators under the Bill. Those investigators will be put in by the court.

The point of possible unconstitutionality seemed to be based on the fact that in a sense this was the administration of justice and that it was being done by somebody other than the courts. The people other than the courts are purely instruments of the court in this context. They are certainly established or appointed by the court and they have no power of sanction against a recalcitrant director or shareholder or whoever it is, without going back and reporting to the court what the problem they have run into is and allowing the recalcitrant director an opportunity to be heard by the court before the court makes any decision about it.

There is an amendment in fact that is relevant to this. It is amendment No. 19 and it is the insertion of subsection (6) in section 10. If Senators look at that they will find that in case there was any possibility of the court finding itself too constrained, that all it could do was to find the person either in contempt of court and act accordingly or not in contempt of court, it was pointed out in the Dáil that it should have greater powers than that.

It should also be able to say to somebody "OK, you are in contempt of court, but we are not going to let you off now by just fining you £20,000 for being in contempt of court and then you are free to go. We are telling you that you are in contempt of court but the penalty that will be imposed is dependent on whether or not you comply with the requirements and requests of the investigators" or, alternatively, they can say well, in all the circumstances we think it is probably appropriate or just that you do not have to comply, if you, say, went part of the way or something. That is there.

I think it strengthens the court's discretion to a greater extent and it makes it absolutely abundantly clear that it is entirely a court matter as to what sanctions will be applied. If this subsection were to be found unconstitutional it would be really impossible for any form of investigation usefully to be carried out in this country. This is largely court based. I have asked the House to contrast that with the DTI procedures in London which are entirely departmentally or almost entirely departmentally based. The reason that we are so court oriented in this country is because of our Constitution. We cannot go any further than we have gone in subsections (5) and (6) of that section. Otherwise, it means that literally everything would have to be done by the court. The judges themselves would have to go round doing the investigating, which is impossible. We must have an investigatory procedure and appartus that will work. I think this will work and it has all the safeguards that people might reasonably want.

Senator Upton suggested that, under Part II, rather than have my Department involved we have an investigation commission. I really do not think that is necessary because the kind of investigators that one would tend to appoint would be people who would very rapidly be able to get to the bottom of these things and I do not think you need a permanent commission for that. I am against quangos, particularly against unnecessary ones. You can pick suitable people quite readily to do these sort of jobs.

On Part III, Senator Howard asked if we considered the question of an outright ban on loans to directors. We did consider it, but I really thought that that would be far too stringent a requirement and that it would interfere quite unjustifiably with commercial freedom. It would be going far too far to tell the average law abiding director that it was illegal for him to borrow money from his own company. It would not be acceptable and it really would be heard to defend. We are constantly faced in this Bill, in the difficulties one is trying to deal with here, with weighing up how far you go I order to catch recalcitrant or malevolent people but not unduly interfere with the perfectly legitimate rights of bona fide people. You can always go a little bit further if you want to get at the recalcitrant, but if you go baldheaded for the recalcitrant you will penalise the large number of innocent people. On the other hand, if you fall over yourselves — as some Deputies, I recall, almost did — in trying to look after the interests of the law-abiding, you are going to let the recalcitrant people away with murder. You are all the time trying to find that balance somewhere in the middle. I think that by and large this Bill has had to approach that dilemma maybe 50 times in all; I cannot say it is dead right in every one of the 50 but I think that by and large it is.

On the question of the provisions about loans, I think Senator Howard thought that small companies were disadvantaged. As I said earlier to day at the outset, the mischief which we are trying to tackle is excessive lending to directors of companies, no matter how big or how small the company is.

In general it is my view that a director cannot treat his company as his own personal bank. On the other hand, what the Dáil did in the amendments it made was to allow some flexibility in this area and instead of having fixed amounts, which was the way that the Bill came out of this House originally, I changed it to a percentage of net assets of the company. I think that is fairer. The figure was something like £2,500. That may have been quite enough for a director of a very small company that had very little in terms of net assets, but it would be a bit ridiculous to tell a director of Smurfits or CRH or somebody like that that he could only borrow £2,500. I thought it was more appropriate to have it as a percentage of the net assets.

Senator Doyle regretted that this Bill does not tackle the question of personal guarantees which are being expected by banks. There is in fact no reference to this subject on the list of amendments which were made in the Dáil. Amendments on that topic were, as she said, tabled in the Special Committee and they were extensively debated. While it is true, obviously, that I do not like the practice that is involved in this country by banks of extraordinary reliance, almost automatic reliance, on personal guarantees from directors, there are valid reasons nonetheless, given the circumstances in which we are, for not accepting those amendments, not least because it would turn the whole creditor debtor relationship upside down and indeed would interfere to a significant degree with the issue of freedom of contract as well.

The basic problem here is that it is assumed that most companies will be financed by borrowed capital, by borrowings from banks. That has tended to be the practice here. That is not the practice in many other countries. That is why there is so much greater dependence on banks here. That is why banks have a more powerful position here than they have in other countries. I will be publishing in the next week figures which show that quite substantial capital was raised through the Irish Stock Exchange in the past three years. Speaking from memory, I think the figure is £1.4 billion; but of that I could only trace that £100 million of it, which is a very small percentage, was actually devoted to manufacturing industry in Ireland. That is where our dilemma is and that is why the banks are so dominant. That is why the banks do all the things that were mentioned here. They have the most incredible margin. The margin between their deposit rate and their lending rate is, as was mentioned by some Senators, perhaps one of the highest in the world, perhaps the highest, and we are all paying for that. We have elevated the banks to a position that they are the source of nearly all our capital, and that is wrong. When efforts are made from time to time by successive Governments to try to make free capital available on an equity basis for investment, frequently it is seen not really as a source of productive investment capital but as some kind of a task. It is driven by the tax avoidance aspect rather than by the investment aspect. One good example of it is that in the BES scheme last year somebody raised £34 million and he created seven jobs. That £34 million was there because it was attractive as a tax avoidance vehicle rather than because it was seen as being attractive as an investment vehicle.

That is where a lot of our problems are. If we were less dependent as a productive nation on the banks and on borrowed capital, if we took for example the attitude and approach that is taken in Germany, if we were prepared to risk more investment in productive assets, but we do not. We only have to look around us to see where is the investment. We have the highest home ownership in the world. We are all the time inundated with propaganda that that is a good thing. It may not be. I am not saying it is a bad thing, but it is not productive. We can never get away from that.

On Part IV, Senator Conroy raised the question of whether the 5 per cent figure was the correct one for the disclosure of holdings in a company. That applies, if I am not mistaken, to a private company, too, in certain circumstances. Of course, it would primarily to be a plc. This is the first time we have had a disclosure requirement of this kind unlike the UK where provisions like this have existed for about ten years or so, as the Senator mentioned. After a certain period of operation of the provisions involved here, I am sure I could consider whether 5 per cent remains the most appropriate minimum level for disclosure. There is provision in Part IV for me to reduce the percentage by regulation if it was thought appropriate. At the moment it is probably the appropriate figure to start with.

On Part V, I mentioned one aspect of this earlier and I would like to go back in particular, and in conclusion, to amendment No. 132, which was mentioned by Senator Doyle and some others, where the banks want refinements to amendment No. 132. Senator Doyle read out some of what they were looking for. They want paragraph (a) dropped, regarding the 21 day notice period. I want to say words in general on this amendment.

Some people have suggested that, far from being helpful, this amendment may prove to be counterproductive. Let me say straight away that I did not willingly accept the desirability of this amendment for quite a long time, even though it was being pressed on me to do this, since I felt strongly that there was no particular need for it. My view was that the basic prohibition on insider dealing was there for all to see in the Bill and that if someone was in possession of inside information, no matter who he was or when it was, then he should not deal. That should be the general rule. Representations were made to me constantly by bankers and other directors of large companies that this would mean that directors and key executives of major quoted companies would, as a result of the provisions of Part V, effectively find themselves locked into their existing shareholdings in their companies since they would, it was claimed, always have some inside information which would affect the share price if it was generally known.

I must say I was reluctant to provide any leeway at all here. I only decided finally to table amendment No. 132 after the most careful thought and in the conviction that whatever leeway was given it could only be availed of under the most strict conditions in order to avoid abuses. That explains why amendment No. 132 provides for advance notice to be given of intention to deal, the publication of that notice and so on. I am not convinced by anything I have heard that the effect of this will be to undermine the market or lead to an undue knock-on effect in terms of share dealing by other investors once a director has announced his intention to deal. For one thing it would be perfectly obvious to the market that this form of leeway was available by law and that over time it would be common accepted practice which would not have suspicious overtones, as people now commenting on it suggest that it has or would have.

Secondly, and more importantly than the point I have made, I want to draw the particular attention of the House to the opening clause of the amendment itself which makes it clear that the exemption will only apply where the person concerned "does not otherwise take advantage of inside information". That is the overriding consideration. The window period after notice that is the subject of complaint does not give any leeway or does not sanctify or make valid what would otherwise be an improper dealing because the person had information. This window is not a guarantee that if you sell within the window period you are o.k. anyway. It is not.

I could easily take out that window period and just let the normal rule apply, which is that you do not deal if you have information. You have to accept that. If you are the chief executive or chairman of the Bank of Ireland or the AIB or somebody like that, you do not deal in your own shares, and you do not deal in anyone else's either, if you have access to information about them. You do not deal, but you are paid a lot of money and you have a lot of perks for the right not to deal. It is assumed in this country that if you are a director of a particular company you should own large lumps of shares in the company. It was seen years ago as showing that you were expressing support for or confidence in the company. That is not necessarily the case today. A lot of excellent directors would not hold any shares in the company so that they would not be in this position. Long before this becomes law — which I hope it will in a week or two — there are many people who would not hold shares in any circumstance in which they might feel themselves morally inhibited from dealing. I admire them. So what, if the chief executive of the Bank of Ireland cannot deal in his own shares? Hard cheese, I say. He does not have to stay there. He can resign, if he finds that too onerous. Let him leave. If he wants to go off dealing in the market, let him leave. If you take on a major job of that kind there are many things you cannot do. When you become a Minister you cannot deal in shares. I did not hear anyone pleading on my behalf, while a few of you bled on behalf of chief executives of banks, etc.——

On Minister's salaries we would not be terrible worried.

I would expect the Stock Exchange authorities to keep a particularly close eye on any dealings that take place around the time a company's financial results are published so that, again over time, the likelihood of someone connected with a company making a killing in the context of a company's financial results would be eliminated.

Overall, therefore I prefer to see Part V operating in practice before making a judgment as to whether any adjustments are desirable. The thing to remember is that amendment No. 132 is in there because the very people who are now complaining about it wanted it in there. They said otherwise they were precluded from dealing. I have tried to give them some limited opportunity to deal and now, as far as I am concerned, we go back to where we were which is you do not deal if you have information. That is what it is all about. There are many people who for a long time, have been in receipt of inside information and have dealt on the Stock Exchange. It was not an offence against Irish law. Now it will be and that is right. It is the position in most other countries. I thank the Seanad for what it had to say about the Bill.

Acting Chairman

We have concluded debate on Parts I to V. I call on the Minister now to speak on the content of the amendments made to Part VI and VII.

On a point of order, could we put Parts I to V and dispose of those now and take each group of Parts as they come?

Acting Chairman

No, that is not possible. The effect of Item No. 3 on today's Order Paper is to allow each Senator to speak on each section of the Bill. It does not provide for the putting of the individual segments to the House. The Bill is debated at Report Stage.

That is the interpretation of Item No. 3 on today's Order Paper? Is that what you are saying?

Acting Chairman

That is the interpretation of the decision.

The Bill shall be received for final consideration, shall not exceed a period of 12 hours in the aggregate and at the expiration of that period, the proceedings thereon, if not previously concluded, shall be brought to a conclusion by the putting of one question from the Chair. That could be interpreted that if we had not concluded, that we wind up with the motion at that stage but does it preclude taking the group of Parts as we go along? I mean there could be a final guillotine motion——

Acting Chairman

It does.

On what grounds?

Acting Chairman

I now call on the Minister to speak on the amendments to Parts VI and VII.

There is a division in the Dáil.

The Minister is automatically paired.

I am not. I have just been sent for most urgently to go and vote.

On what basis? There is a procedure where the Minister in the Seanad is automatically paired. It is part of Seanad reform.

Acting Chairman

Can the Acting Leader of the House indicate the procedure?

My understanding is that there is an arrangement but I would not like to cause the Minister to miss a vote if he has been urgently called.

Is there a change?

No, that is not my understanding. I will check it out because I suspect there will be many votes as the night goes on.

It should be checked.

Sitting suspended at 5.5 p.m. and resumed at 5.15 p.m.

Part VI makes a number of important changes and adds a number of new provisions to the existing law in relation to the winding up of companies. In many ways, this Part is seen by many, together with Part VII, as the very raison d'être of this Bill. I agree that it is an important Part since it is in winding up situations that many company law abuses come to light. For the benefit of the House I will mention a number of amendments which have been made to this Part in the Dáil.

The first amendment I want to refer to is amendment No. 147. This essentially deleted section 102 of the Bill, which attracted a fair amount of criticism in this House the last time. The new section will now only make a modest change to section 99 of the Principal Act which it was originally proposed to replace. It will also permit the Minister, by regulation, to add to the description of charges requiring registration under that section.

Amendment No. 149 tackles the situation which gives rise to concern where a liquidator sells assets by private contract, usually at a very favourable rate, to former directors while the creditors are out of pocket. It will now be obligatory on a liquidator to notify the creditor concerned and they will be able to take whatever action they consider appropriate.

Amendment No. 159, in substituting a new subsection (1) into section 297 being inserted into the Principal Act, now ensures that criminal fraud proceedings under that section can be taken where a company is live, whereas the original section could only be used in a winding up situation.

Section 116, which was subject to quite an amount of debate in this House the last time and was indeed refined in the light of the points made, was further fine-tuned in the Dáil by amendments Nos. 160 to 168, inclusive. I am now satisfied that we have a satisfactory and workable provision as a result.

While section 122 (2) was added by way of amendment in this House to make it clear that liquidators and receivers did not have to name names under this section, this created its own problems in that if it were reported that an unspecified case had been referred to the DPP, all the directors of the company concerned could be tainted by such a disclosure. In these circumstances, I recast the section so that the obligation of disclosure only arises where the court has actually made a declaration of personal liability against a director of a company concerned or where the person is or is deemed to be subject to a disqualification order.

I also substituted a new section 126, by amendment No. 175, to ensure that any party who has a connection with the proposed liquidator will be obliged to disclose this fact to the meeting at which the liquidator is to be appointed thereby ensuring that no apointment of a friend can be engineered behind the schemes.

Finally, on amendments made to Part VI, I replaced section 127 with a shorter and more concise section which clearly spells out the power of the court to order a director of a subsidiary's holding company to repay or restore money or property which has been misapplied or where the director has been guilty of any misfeasance or other breach of duty or trust in relation to the subsidiary.

I mentioned earlier my view that, along with Part VI, Part VII pretty much represents the whole raison d'être of this Bill since it has to do with disqualifying people from being company directors for proven abuses and placing other related restrictions on them to curb the so called phoenix syndrome.

The approach taken in Part VII of the Bill is basically (a) in Chapter 2 — in other words, sections 134 and 135 of the Bill as passed by this House — we build on provisions that have existed in company law for many years now under which the High Court can disqualify a person from being involved in a company where serious misconduct is involved. Chapter 2 tightens up the law considerably in this respect as well as broadening the range of circumstances in which the court can make a disqualification order.

Chapter 1 of Part VII, on the other hand — that is sections 128 to 133 of the Bill as passed by this House — does not actually disqualify anyone from being a director. What it does is to say that if you are a director of a company which goes into insolvent liquidation you cannot become involved in another company unless the company meets certain conditions. The main condition involved is that the second company must have a certain minimum capitalisation as a protection to its creditors.

Chapter 3 of Part VII — that is sections 136 to 144 of the Bill as passed by this House — contains a range of provisions designed to make sure that the measures we are putting in place here are enforced. Having put further thought into these provisions, in the light of the very great interest they attracted both within and outside the Houses of the Oireachtas, I brought forward a number of amendments which significantly refined the provisions as passed by this House. In this regard I liberalised — to coin a phrase — the provisions by making the following changes. First, rather than have the provisions in Chapter 1 apply automatically, as it were, a person will not become subject to the restrictions unless the court declares that he should.

Second, the court cannot make such a declaration, firstly, where it is satisfied that the person concerned has acted honestly and responsibly in relation to the conduct of the affairs of the company; or, secondly, and subject to the honesty test, where the person concerned is a director of the company solely by reason of his nomination by a financial institution which has provided credit facilities to the company as long as the institution has not obtained a personal guarantee for repayment of the loan concerned; or, finally, and again subject to the honesty test, where the person concerned is nominated by a venture capital company which has purchased or subscribed for shares in the company concerned.

Third, the restrictions will last only for a set period — in other words, five years — rather than be open-ended as originally proposed. Fourth, the provisions will only apply to companies whose winding up commences after the Bill comes into effect.

That is the way I liberalised the provisions of Chapter 1. On the other hand, I have toughened the provisions by making the following changes: first, where the court makes a declaration, the minimum capital amounts for the new company will be double what they were in the original text — in other words, they will now be £100,000 for public limited companies and £20,000 for private companies. Second, the restrictions will apply not merely to any company with which the director subsequently becomes involved but also to any existing company of which he is a director. Finally, the restricted company cannot take advantage of the new more liberal directors loans regime which is set out in Part III.

In view of the fact that the provisions relating to the restriction of directors is now court based, I also introduced, in amendments Nos. 181 and 205, two sections which provide for the manner in which information regarding restricted and disqualified directors is to be kept on registers to be maintained by the Registrar of Companies. In particular, if the court grants full relief to a restricted director his name will be removed from the register concerned as it will when the term of his restriction expires. As I am sure the House will appreciate, the revision of the provisions in the manner in which I have just outlined necessitated a large number of technical amendments in this Part which are included in the white list of amendments before the House.

Part VI of this Bill deals with the winding up of companies and related matters and Part VII of the Bill deals with disqualifications and restrictions placed on directors and other officers. These deal with some of the most important provisions in this Bill.

I welcome the provisions contained in Parts VI and VII because they seek to strike a fair balance between, on the one hand the need to tackle firmly abuse and malpractice and to discourage and prevent reckless people from becoming involved in limited liability companies and, on the other hand, the need to encourage and promote honest and genuine enterprise. The need to maintain this fair balance has been very well summed up by the Cork Committee, the British Review Committee under the chairmanship of Sir Kenneth Cork which reported on insolvency practice in the United Kingdom in 1982. The report stated:

A fair balance has to be drawn between the right of the honest and prudent businessman, who is prepared to work hard, and to continue to trade out of difficulties if he can genuinely see the light at the end of the tunnel, and the corresponding obligation to put up shutters when by continuing to trade he would be doing so at the expense of his creditors, and in disregard of those business considerations which a reasonable man is expected to observe.

I have no doubt that this legislation to tackle the abuse of limited liability and to put a stop to the activities of delinquent and dishonest directors has the support of a wide consensus of opinion in the public, commercial and political world. I welcome the provisions in the amendments to Part VII of the Bill which cover this area. It has been the subject of many demands for legislative action in recent times. These provisions seek to tackle, as the Minister has indicated, the so-called phoenix syndrome and the fly-by-night director rising from the ashes of an insolvent, liquidated company under another name, leaving behind in many cases a trail of unpaid creditors. In the words of Ronan Keane, an eminent Judge of the High Court and President of the Law Reform Commission:

The abuse of the protection of limited liability is causing many problems. In particular, the readiness of some entrepreneurs to put companies into liquidation, leave their creditors to whistle for their money and then form another limited company has, understandably, caused serious concern.

It is for that reason — and I think it is very well summed up by Mr. Justice Keane — that I welcome the provisions and the refinements contained in these amendments. It is most important to emphasise that these provisions are not designed to prevent the directors of insolvent companies from starting off in business again. They are merely providing a minimum set of standards to protect and safeguard the interests of future creditors.

Part VI of this Bill deals with the winding-up of companies and related matters and contains also many of the most important provisions in the Bill. Because, as the Minister indicated, it is in the winding-up of companies that most company law abuses and malpractices eventually come to light. There is much public demand, I believe, that dishonest directors should be made more accountable for their actions and activities.

Under section 297 of the Companies Act, 1963, provision was made in respect of fraudulent trading, under which company directors could be made personally liable for all or any part of a company's debt. However, we know that practice has shown that liquidators have tended to shy away from seeking declarations in the courts on the basis that under the 1963 legislation it was too difficult to establish the necessary standards of proof. At the same time, of course, and I think in marked contrast to the Legislature, the Judiciary have taken the initiative on this matter. Indeed, we have had some very significant and notable cases in this area, cases such as re Aluminium Fabricators in 1983, a judgment of Mr. Justice O'Hanlon, and re Hunting Lodges in 1984, a judgment of Miss Justice Carroll. In these cases the courts made declarations in respect of personal liability. They lifted the corporate veil of limited liability. In the course of her judgment in that particular case, Miss Justice Carroll summed up the position very well when she stated — and I quote:

The privilege of limited liability which is afforded by the Companies Act in relation to companies incorporated under the Act with limited liability cannot be afforded to those who use a limited liability company as a cloak or a shield beneath which they seek to operate a fraudulent system of carrying on business for their own personal enrichment and advantage.

Section 138 of this Bill, as amended in the Dáil, has two important objectives. The question of civil liability for fraudulent trading has been separated from criminal liability, which is now dealt with in section 137. This splitting up criminal and civil offences for fraudulent trading should, I believe, help to lower the standard of proof required in civil cases when liquidators or creditors take such actions.

Section 138 also introduces an important notion of reckless trading. There have been, indeed, many cases where directors have operated a company in a way which, while not actually with fraudulent intent, completely disregarded the interests of their creditors and their shareholders. However, it is to be hoped that this provision will not have serious adverse effects on business and that the safeguards provided in these amendments will protect the honest director. All in all, therefore, those two Parts — Parts VI and Part VII — which have been very well teased out in this House when the Bill was initiated in 1987 and were subject to quite a number of amendments, will be welcomed by the public. Certainly on my own behalf and on behalf of my party I welcome these provisions.

I, too, welcome these two Parts of the Bill. As the Minister said, amendment No. 149 in Part VI effectively tackles a real problem which gave a lot of concern where the liquidators could sell assets by private contract, usually at quite a good rate to a firm of directors, while the creditors were left to whistle. It will now be obligatory on the liquidator to notify the creditors concerned and they can take appropriate action. That certainly is a big improvement on what was obviously a pretty major defect.

Part VI is an important Part of this Bill. It is most important because, as the Minister and Senator Howard have said, it is in the winding-up of companies that the real abuses take place. In many cases they only come to light then. There is a great need and demand, after the winding-up stage, to ensure that proper accountability is practised by the directors of companies.

The tightening-up regulations on existing law and voluntary liquidations is also most appropriate. It is only right and proper that the power of the courts can be used now to examine officers of companies. That that will prove to be quite a major deterrent to fraudulent trading in the future. If the would-be fraudulent directors know that there will be an intensive examination of them by the courts as regards the procedures they have adopted, they will certainly think twice before indulging themselves in that form of malpractice.

The recognition in Part VI of this new concept of reckless trading is a very enlightened approach. It eliminates the sort of directors who, whilst they are not actually being flagrantly fraudulent, adopt a sort of a kamikaze approach towards the running of their companies. Whilst they are not involving themselves in fraudulent procedures per se nevertheless they can cause as much financial chaos and havoc as if they were actually acting fraudulently. These cavalier type of directors who recklessly trade, ignoring the rights of shareholders and or creditors, will certainly be restrained by this Bill. They will not be able to proceed along the lines followed in the past. They will be subject to the full examination of the courts and could be held fully financially responsible for the losses incurred by others as a result of their irresponsible or reckless trading. That certainly is something to be commended. It is a new approach to the recognition of the reckless trader. He or she has to be responsible for the debts incurred by others as a result of his or her reckless actions.

Part VII, as the Minister said, and as Senator Kennedy referred to, relates to this phoenix syndrome. We will all agree that it is about time we buried this type of phoenix. It is all over the country at the moment. It is a sort of endemic disease. Where we have irresponsible people trading, where people proceed in a blase fashion, do not particularly worry about paying their debts — they collect all right but they do not pay their debts — they do not pay private suppliers, they do not pay the Revenue Commissioners, they do not pay the PAYE and they do not pay their VAT. When things become in any way difficult they close up shop on a Friday evening. They open up on a Monday morning around the corner and proceed as if nothing had ever happened.

It is quite scandalous to think that people can get away with it. While they are flagrantly flouting the law in one sense, they do not have any shame either. These are the people who have the biggest cars in their towns or villages. They are trading on the misfortune of others. They are quite prepared to collect money on one hand but certainly do not intend to pay out. They will be inhibited and prevented in the future from doing this. This is very important. It is also very important that within this Part of the Bill, power is granted to the courts to disqualify directors who have been flagrantly involved in proven fraudulent dealings. That is important.

With regard to companies which get into insolvent situations and have to be wound up, it is only right that, as the Minister said, if the director involved in that company were to start up in another company or as a director of another company that the new company should be capitalised properly. The amounts specified by the Minister in a public company are £100,000 and in a private company £20,000. If anything, those figures may be slightly on the low side, in my opinion. I appreciate that since the Bill was first introduced the figures have actually been doubled. This is a major advance. It is going to clean up a lot of the real filth which was taking place in company practice. It certainly is going to prevent these people who are little more than thieves — because that is all they are — from proceeding along as they used to in their merry old fashion and not caring about anybody, but accumulating a considerable amount of wealth while fraudulently dealing with other people who are suffering as a consequence.

Part VI dealing with the winding up and related matters and Part VII dealing with the disqualification and restriction of directors and others are two parts of the Bill that I certainly have no great difficulty with. I want to say that I regard both Parts as strengthening the situation in dealing with fraud and reckless trading. For that reason I am quite happy to say that, on balance, I welcome them. I believe they will bring an improved situation in which results that all of us agree are necessary can be achieved.

There are certain points of clarification I want to raise with the Minister. Just before I go onto that, and at the risk of reverting back slightly but only for the purpose of clarification, I wish to say a few words. The Minister, Deputy O'Malley, when replying to the earlier discussion, said if Members were sufficiently interested there was enough documentation from debates in the Dáil and the Special Dáil Committee to keep a person up to date. That is fine. The difficulty I have encountered is relating what emerged from the debates on the Special Committee to the documents I received yesterday. It is relating the detail of these that is difficult. As far as the general thrust of the discussion is concerned, there is no problem. We are with it on that. It is trying in the number of hours available to relate the detail of the discussions in the Special Committee into the Bill itself. That is the difficulty I am in. Perhaps it is because of that difficulty that I am raising queries which, if I had greater time, might not be necessary for me to raise. However, I have not too many queries to raise on it.

Section 38 deals with the criminal liability of persons engaged in fraudulent and reckless trading. I think that that is the core of what we are dealing with here. I welcome the improvement that comes under that. It, indeed, has my full support. I would make the same comment in relation to section 139. That refers to the power the courts will now have under this legislation to order the return of assets when they have been improperly transferred. If you like, this was one of the things that happened first where a company was being led by people who intended to be fraudulent in their management of it. Assets were transferred.

The recovery of these assets or the reestablishment of the proper ownership of these constituted many problems. I know that my colleague, Senator Doyle, will be dealing with it. The whole question of the retention of title and goods is a matter that would probably be appropriate to raise at this point. If it is not appropriate, let me say again that I take refuge in the point I made earlier with regard to the disadvantages the lack of time has created.

I want to raise with the Minister a question in relation to what is contained in section 160. Section 160 deals with the disqualification of certain persons from acting as directors or auditors or from the managing of companies. The disqualification, as far as I can establish, is five years. I want to raise this query in relation to the position of an auditor so disqualified. I know there is a further section of the Bill dealing with audit and accountancy. This section of the Bill is a proper one on which to raise the query I want to raise. I want to ask the Minister to clarify for me the position of an auditor in a partnership, or perhaps more correctly the position of the other partners in the partnership of an auditor who would be disqualified under the provisions of section 160. What does it mean? If that particular individual is part of a partnership, what are the knock on effects on the other partners in that partnership? Does disqualification apply to them? Are they disadvantaged in some way? What is the situation there?

The final point of clarification that I want to get from the Minister is in relation to section 164. That deals with the penalty for acting under the direction of disqualified persons. I know it says that there is a question of knowing that such a person was disqualified, but I am a bit mystified as to the implications of subsection (2) of section 164. Perhaps the Minister in his reply will deal with that.

These sections are very necessary and overdue. We have had many situations, unfortunately, in which companies were allowed to go into liquidation. Certain particular industries were virtually notorious for this, and then the following day the people involved set up another company. It has been an ongoing scandal. It is high time it was ended. I just wonder in the legislation which hopefully will be built upon this legislation if the Minister would consider some appointment or arrangement of an office of an official liquidator or examiner. There is a situation, which is not remedied in this Bill, when a company purports to go into liquidation that the directors concerned have a duty to appoint a liquidator and call a creditors' meeting. In many cases the creditors are left with the situation in which they may not be very happy with what is occurring, but they are faced either with accepting what the directors of the company are offering or, alternatively, of going through the extremely expensive and time consuming procedure of applying to the courts for the appointment of a court liquidator or examiner. One does have the situation in which many people and companies slip through the net. People say it is only £500 or £2,000 and the creditors let the matter go; or, alternatively, are unable to afford to go through the possible high expenses of court procedures. There is this gap in our legislation for dealing with the winding up of companies and related matters. I would ask the Minister to consider the possibility of appointing or setting up such an office for the future.

I broadly welcome both these Parts. They are long overdue. We have all witnessed the abuse of the protection of limited liability now for a long time in one form or another and, indeed, reckless trading bordering on the fraudulent in many cases. At least there are procedures in place now for determining and chasing such directors that we have witnessed over the months and years gone by. There are a couple of points in this area that I would specifically like to refer to. They are by way of omission from the two Parts rather than speaking directly to amendments that have been included, but we have all been allowed considerable latitude this afternoon. Very few people have been strictly in order all the time.

I would just like to remind the House that my colleagues put down an amendment to this Bill in the other House to remove the preferential status of the Revenue Commissioners in company insolvencies. We believe very strongly that the Revenue Commissioners should be required to exercise the same discipline in collecting their debts as any other creditor, particularly with the passage of this Bill. At the moment the Revenue enjoy Commissioners preference over all company creditors, with the exception of employees. This effectively means that they can afford to see a company go down and to wait for their money in the almost certain knowledge that they, at least, will be looked after, whatever about the other creditors. Any resultant delay by the Revenue Commissioners places other unsecured creditors at an even greater risk. Innocent trade creditors would be left without their money while the Revenue, who may have been sitting on the case for years, will get all their money. This appears to be blatantly unfair.

This opens up the whole area of retention of title from small suppliers. All of us in our constituencies could give examples of small suppliers, farmers and so on, who with the collapse of bigger companies such as Clover Meats and many others were owed for cattle supplied or other goods to the value of £5,000, £10,000 or £100,000. Maybe in the overall scheme of things it is a small amount, but for an individual it is an enormous amount. I would love to see this whole area of retention of title specifically nailed down in the Bill. My understanding is that it is not. Perhaps we could have the Minister's views on this. He might tell us whether he will be prepared to take on board a thorough look at the procedures here to ensure protection for the unsecured creditor in any future legislation. I feel very strongly about this particular area. We all see innocent producers and suppliers being nailed and becoming unsecured creditors, with companies running into difficulty.

In recent times the Revenue Commissioners have improved their collection procedures and have received greatly enhanced collection powers with the supporting penalties that go with that in relation to defaulters. Hence, they do not need to continue to enjoy preference over all other creditors. The time has come to seriously look at this option.

If the Revenue preference is removed, the Revenue will then act more quickly if there are signs of a company going off the rails financially. This, in turn, will lead to speedier action by the company itself to correct the situation and will foster a generally healthier business climate. The Fine Gael Party were hopeful that the Minister, Deputy O'Malley, would have been favourably disposed to the amendments in relation to the removal of this preferential status for the Revenue Commissioners, as the Bill passed through the Dáil.

The Progressive Democrats policy document, Employment, Enterprise and Tax Reform, which was published in November 1988, called for, on page 83, and I quote: “an ending of the preferred status of the Revenue on insolvencies”. It is actually the Minister's own party's policy that we abolish the preferential status for the Revenue Commissioners. It is all the more disappointing that he did not take on board the amendment that was moved in the Dáil in relation to this issue.

An Leas-Chathaoirleach

I would like to remind the Senator that the only amendments that can be discussed are those that were made in the Dáil.

In fact, we are only supposed to discuss amendments that were accepted, but very few people have kept to amendments that were accepted, including myself. Therefore, I think we are being reasonable enough. We are not going too far away from the field at all with respect, but I accept the ruling of the Chair.

It should be noted that the Commission on Taxation also recommended that the preferential position of the Revenue Commissioners should be abolished in relation to assessing income tax, corporation tax, interest on preferential debts and capital gains tax. The Commission also said that the preference of the local authorities in relation to rates and motor vehicle duty should be removed. The removal of the Revenue preference was recommended in Britain by the Cork Committee, which did a major survey of company law there. The Cork Committee pointed out that any loss to the Revenue was likely to be insignificant in comparison with their overall receipts. But if the Revenue are paid in full a small supplier may get nothing. For the small supplier this loss is crucial. I know of one small builder who in recent times was threatened with eviction from his house because of a succession of financial disasters that were sparked off by the insolvency of a company that owed him a large sum of money.

The Revenue do not need preference as much as the small supplier, because the Revenue have an inbuilt system of credit information through frequent VAT and PRSI returns. The Revenue are likely to be the first to know if a company is going off the rails. Some might have justified Revenue preference in the past on the ground that so many company directors evaded their taxes by running their companies into the ground and then setting up a new company under a different name — what we have been referring to this afternoon as the phoenix syndrome. The phoenix syndrome is no longer a valid argument for Revenue preference, because the Companies Bill before us will put an end to this. I welcome that. Using the fear of the phoenix syndrome as justification for maintaining preferential status for the Revenue Commissioners is on longer just.

Section 116 makes a company director personally liable for the debts of an insolvent company if he carried on its business in a reckless manner. The court will declare him to be reckless if it, the court, decides that he ought to have known that his actions will cause loss to creditors. The Bill before us also provides——

It is now 6 o'clock and, in line with our earlier agreement, I will ask you to move the Adjournment.

I have one sentence and then I am finished. The Bill provides that any director of any insolvent company will now have to put up £20,000 if he wants to get back in business. These changes will mean that company directors will be much more careful in future. This is a further argument for saying that the Revenue no longer need the extraordinary protection of preferential status.

Sitting suspended at 6.10 p.m. and resumed at 7 p.m.

We are resuming now on Parts VI and VII. The Minister to reply.

I am glad to note that the House has generally welcomed the amendments which have been made to Parts VI and VII of the Bill which, as I indicated, were in many ways the real meat of this Bill. These are certainly examples of where both the Seanad and the Dáil made significant and substantial improvements and the Bill is, I think, very much better as a result of these amendments.

Senators Howard and Doyle wanted the question of retention of title to be covered in Part VI. The position is that parties are, of course, free to agree among themselves as to when title to goods should pass. It is provided for in section 17 of the Sale of Goods Act, 1893. It has also been recognised in a long series of decided cases. In these circumstances, I did not consider it desirable to provide separately for retention of title here as a statutory matter. Senator Doyle raised the question of the preferential position of the Revenue Commissioners. This subject has really been debated up, down and sideways in both Houses at this stage. I do not feel I should go into it all again here particularly since it is not relevant to the list of Dáil amendments which are now before the House.

Senator Howard referred to Chapter 2 of Part VII and asked whether, if an auditor is disqualified, the partners in his firm are disqualified also. The answer is no. A disqualification order will be targeted only at particular individuals. But if someone acts under the instructions of a disqualified person, knowing him to be disqualified, there are civil and criminal penalties for that. However, that does not mean that a partner of a disqualified auditor would automatically be himself disqualified which, I think, is what the Senator feared.

Senator Conroy asked whether an office of official liquidator should be established to cater for cases where there are not enough funds to pay for an ordinary liquidator out of the assets of a company that was defunct. We considered this in the course of the lengthy consideration of this Bill over four years or more. It was found necessary to reject it because of the costs involved, among other things. One is really talking here about a new office or, if you like to describe it as such, a new layer of bureaucracy, which I think most people would agree in principle would not be desirable if it can at all be avoided. At the same time I would draw the attention of the House to section 207 of the Bill as it left this House. That is the yellow Bill. That section provides that where a company which has ceased trading is not put into liquidation due to lack of funds, several provisions of the Bill will nevertheless apply and they are set out in the table to the last section, which is section 207, on page 154, of the Bill, as passed in this House. The sections which will apply anyway, even if a liquidator cannot be appointed in the normal way are — these are the sections of the Principal Act, of course, some of which are inserted by this Act — section 243 which relates to inspection of books by creditors and contributories; 245 to the power of the court to summon persons for examination; 245 (a) orders for payment or delivery of property against persons examined under section 245; 247, power to arrest an absconding contributory; 295 frauds by officers of companies which have gone into liquidation; 297 criminal liability for fraudulent trading; 297 (a) civil liability for fraudulent trading and section 298 the power of the court to assess damages against directors.

Therefore, it might be claimed that all the more basic powers necessary in a situation where there is some suspected element of fraud apply and it would be possible for the court or an interested party to have them applied against the officers, even if there is not a liquidator in the normal way. They are some of the main points that were raised in the debate on this Part and I would like to thank the Senators who contributed.

We come now to Parts VIII and IX. Part VIII contains a number of important provisions dealing with the role of receivers and it modifies or adds to the existing company law provisions governing the activities of receivers. I would like to highlight for particular mention three of the amendments which were made in the Dáil. The first of these is to section 147 which was previously amended in this House. Amendment No. 210 further added to this section to provide, as in the case of liquidators, that where a receiver proposes to sell by private contract an asset of a company in receivership to a former director, he has to give notice of his intention to all known creditors. Thus, creditors will be aware of such proposals and if they are unhappy they will be able to take whatever action they consider appropriate.

The second amendment which I would like to mention is No. 211. In the Bill as passed by this House, section 320 (a) being inserted in the Principal Act would have obliged the receiver to prepare a statement of affairs where those within the company responsible for the preparation of such a statement under section 319 had failed to do so. On reflection, I agreed with those who argued that this was not an appropriate duty to impose on receivers and accordingly I introduced an amendment which will enable the court to force defaulting officers of the company to comply with the requirements of section 319 of the Principal Act.

The third amendment I should mention is No. 216 which provides for the extension of the application of section 117 of the yellow text to receivership situations. This deals with the return of assets which have been improperly transferred and should prove a useful power to have in receiverships to prevent receivers being frustrated by improper means. The other amendments made to this part are more technical in nature and are intended to assist in the smoother operation of receiverships generally.

Part IX as passed by this House contains 32 sections introducing new company rescue procedures. In the meantime, as the House is well aware, it proved necessary to introduce a separate amending Act to implement these proposals in advance of the enactment of this present Bill. In the Dáil, therefore, I moved an amendment effectively to remove sections 154 to 185, inclusive, from this Bill. At the same time, a number of matters had been raised in the Special Committee about which I gave an undertaking to reflect on before Report Stage. Time did not permit me to complete my examination of these before the amendment Act was passed in August. On Report Stage in the Dáil I moved two amendments which picked up on those points which I had given a commitment to re-examine, as well as some other matters which had struck me in the meantime. Thus what we will now have in part IX are two sections which make various amendments to the Companies (Amendment) Act, 1990.

I am quite satisfied with what is contained in Parts VIII and IX. I thank the Minister for his detailed explanation. Both Parts of the Bill were dealt with very effectively in the Special Committee of the Dáil and, of course, a large part of what is involved in Part IX of the Bill was already dealt with by this House some time ago. Therefore, all I want to say at this stage is that I am quite happy and I welcome Parts VIII and IX.

I would like to thank Senator Howard and the House generally for their welcome of these two important sections which set out to cover some very vital parts of company law. In so far as the original Part IX is concerned, it has done so with reasonable success so far. The one caveat I would like to enter in regard to the original Part IX, as now enacted, is that the principal case with which it is involved is the very unusual case in terms of its size and complexity and the examiner in that case undoubtedly has certain problems, but if you are acting as examiner simultaneously to 61 different companies and trying to keep an eye on a lot of others that are outside the jurisdiction, and of which you are not examiner, then it is inevitable that you would have problems. One of the criticisms has been that the time scale perhaps was too short and one might see that argument possibly being made in the case I am alluding to, but again that is most abnormal. I doubt if we will ever again see a case of such size and complexity under the old Part IX and in the four other cases which have taken place no problem has arisen in regard to the time scale; there has been more than adequate time in which to deal with them.

In my view, even in as large and complex a case as the one to which I refer, it is still desirable that there should be a fairly limited time scale because otherwise things will just drag on interminably as they do under the corresponding legislation in some other countries, with a resultant great increase in costs. Therefore, the House can be reasonably satisfied with the work it did in August and rest happy in the knowledge that it has enacted an entirely new system of company rescue which this country lacked up to now and which, in what I would call the more normal case, is likely to act with quite some efficiency and some effect.

In regard to Part X of the Bill, it is concerned with accounts and audits and, as passed by this House, provided for updating the existing company law provisions in a number of specific ways related to, in particular, the appointment and removal of auditors, the qualification for appointment as auditor, the duty of auditors to ensure that proper books of account are kept, defining precisely what the books of account of a company should contain and making provision for the imposition of personal liability on those responsible where proper books of account are not kept.

Practically all of the amendments made to Part X in the Dáil are designed to implement a Community directive which was adopted on 10 April, 1984. This directive requires member states to establish minimum educational and professional training standards and examination requirements for persons responsible for carrying out statutory audits of annual accounts of companies and firms. It also puts an obligation on member states to ensure that statutory audits are carried out with professional integrity and that there are appropriate safeguards in national law to protect auditors' independence. I might add that the Eighth Directive was due for implementation into the laws of member states not later than 1 January 1990 and accordingly we are almost 12 months late. The approach that I adopted involved the minimum change necessary to the existing procedures for the approval of auditors. Senators will note that under amendment No. 238, which inserted a new section 201, the Minister will be able to smooth out any difficulties which arise in the sections implementing the directive.

Finally, on this part I would like to mention that section 228, inserted by amendment No. 239, is essentially what comprised section 198 in the Bill as passed by the Seanad with a new subsection (2) added, together with some consequential textual changes. This section had been deleted in the Special Committee when, after some Opposition amendments had been defeated, there was an equality of votes on the motion that the section should stand part of the Bill. The provision is a very important section in this Part and was reinstated at Report Stage in the Dáil subject to the change which I have just mentioned.

Coming to Part XI, I would draw the House's attention to the fact that amendments No. 245 to 273, inclusive, comprise a new Part XI which was added to the Bill in the Dáil. Irish company law generally prohibits the purchase or redemption of its own shares by any company. The issue of redeemable preference shares is permitted under strict conditions, but the issue of redeemable ordinary shares is not currently allowed under Irish law under any conditions.

The present prohibition, which is set out in previous Companies Acts, is essentially a codification of a Common Law doctrine which was established in the last century. The basis for this was that those dealing with a company should be assured that all of the subscribed capital should remain available to pay the company's liabilities and that no part of it can be returned to a shareholder to the detriment of a creditor. The concept of a company purchasing its owns shares is well established in the United States and in Canada. The underlying principle is that a company can buy back its own shares so long as it does so out of profits and without impairing capital. The UK Companies Acts also allow companies to purchase their own shares subject to certain conditions designed to ensure the maintenance of capital.

The new provisions proposed followed a period of consultation with several interested groups in both the private and public sectors. My Department also looked at the legal mechanisms involved in the other countries which I mentioned earlier. This examination showed that there was a case for allowing Irish companies to purchase their own shares so that they could have all the tools in their armoury which their competitors have and are not in danger of being at a competitive disadvantage. In making these proposals, however, major consideration has also to be given to the protection of creditors by placing limits on the use of the power to purchase own shares.

The following are the main features and in-built safeguards proposed in this mechanism: (1) Shareholder approval will normally be required for such transactions. (2) The funds for such purchases must generally come out of the profits of the company and not its capital. (3) The new Part will provide for the necessary accounting treatment principally to ensure that capital is maintained. (4) Voting rights on shares held by a company in itself or by a subsidiary in its parent will be suspended. (5) Dividend payments by a company to itself will be restricted. (6) Companies who redeem or purchase their own shares will be allowed the option of cancelling or holding these shares. (7) Subsidiary companies will be allowed within certain overall limits to purchase shares in their holding company. (8) There will be built-in provisions to counter share price manipulation. (9) Finally, the Stock Exchange will be given a policing role to ensure compliance by quoted PLCs with the legislation, very similar to the policing role already given to the exchange in Parts IV and V of the Bill on disclosure of share ownership and on insider trading respectively. These provisions achieve a good balance between giving our companies advantages already in the possession of their competitors while at the same time giving a necessary amount of protection to their creditors.

By virtue of the previous batch of amendments which inserted a new Part XI into the Bill. What was previously Part XI will now become Part XII. As passed by this House this part contains six sections dealing with such diverse matters as offences, penalties for furnishing false information or for destroying, mutilating or falsifying documents, the systems of classification of information to be maintained by the Registrar of Companies and, finally, a section which provides for the application of certain provisions to companies which cease trading but are not formally wound up.

In the Dáil I added a further 11 sections to this Part. Five of these sections are directly related to the activities of the Registrar of Companies and are designed to enable the Registrar to operate more effectively. For example, the sections introduced by amendments Nos. 279, 280 and 281 will enable the Registrar to pursue those who fail to comply with requirements to lodge information in the Companies Registration Office and if necessary, strike defaulting companies from the register. However, the Registrar will also be able to restore to the register companies struck off where outstanding information is submitted.

Sections 207 and 208 inserted by amendment Nos. 282 and 283 will enable the Registrar to prescribe the manner in which information should be applied to the Companies Registration Office and in particular will enable the Registrar to use the most up-to-date technology.

Amendment No. 274 will enable the Minister to prescribe that certain matters can be dealt with in a court other than the High Court. This is something I am very keen to see happen.

Amendments Nos. 275 and 276 introduce provisions relating to qualifications. The former provides for the qualifications necessary for appointment as secretary of a public limited company, while the latter will enable the Minister to make regulations adding to the list of persons who shall not be qualified to be a liquidator or a receiver.

Part XIII of the Bill was introduced at Committee Stage in the Dáil. The purpose of the provisions of the part is to provide for a particular type of investment company known as an investment company with variable capital. In the financial world this type of investment vehicle is usually known by its French abbreviation SICAV. These types of company can in fact already operate in this country but only if they do so within the context of the European Communities Undertakings for Collective Investment in Transferable Securities Regulations 1989 or as they are more commonly referred to, the UCITs regulations.

There is however also a demand for a similar type of investment vehicle which would fall outside the scope of the UCIT regulations, in particular outside the investment constraints of those regulations. This demand has been catered for elsewhere, notably in Luxembourg. As I have said, the aim of this set of provisions is to cater for such companies in Ireland. The provisions are particularly desirable to enable such entities to operate in the international financial services centre. As the House will be aware, the IFSC competes for investment business with several other such centres throughout the world and it is important that companies operating in the centre are able to market a full range of products. It has become evident to those promoting the centre that these investment companies with variable capital, or SICAV, are an important vehicle in the international financial services industry. Having said that however, I do not propose to limit the operation of this type of investment company to the confines of the IFSC itself. Subject to compliance with the provisions of the Bill such companies could be situated anywhere in the State. I think it is logical to enable the Irish financial services industry to market this type of product in this country but — and I regard this as most important — subject to the condition that a suitable supervisory system is in operation.

To enable this type of company to operate certain principles of company law, mainly relating to maintenance of capital, have to be set aside. Such exemptions have only been allowed on the basis that these companies will have to be authorised and will be supervised by the Central Bank. The bank will have the power to attach conditions to the authorisation of these companies and will be able to add further conditions from time to time as it sees fit. The bank will also be able to require a minimum paid up capital below which an investment company with variable capital will not be allowed to operate. Some of the powers being given to the bank in relation to these companies are the same as powers that it already has in relation to UCITS generally and it will not be possible for such a company to operate unless authorised or supervised by the Central Bank. The provisions of this new Part to the Bill, Part XIII, are designed to ensure the correct balance between providing for the development of our financial services industry by adding to the range of investment vehicles and, at the same time, providing for the need to have such a development suitably contained within a proper regulatory and supervisory structure.

There are just a few points I would like to clarify with the Minister. Indeed, some of these points may have been taken on board because of the time constraints on us and the problems some of us had with material we got in terms of the reference numbers and exactly which previous document they referred to. I have not checked to the point of satisfaction that the points I make have not already in some cases perhaps been taken on board, so I will stand corrected. There are just a few general points I would like to make, points that have been put by some of the professional bodies — the CCAB and the CII, for example — and I am sure some other of my colleagues may have other points to make.

It has been noted that the Government have taken the opportunity, in reviewing existing legislative requirements relating to the annual accounts of limited companies and the related statutory audit obligations, to incorporate, as the Minister pointed out to us, within this Bill the necessary provisions to implement the EC Eighth Directive 86/253 concerning the qualification and training of statutory auditors. The term "practising certificate", which is contained in section 208, has come up for some query, particularly from the CCAB. I would like to know what the Minister's views are to the question of using that term which is contained in section 208 and which has been requested to be revised, because this term is already in use by branches of the profession involved in auditing, in solvency work and financial advice. It was being suggested to the Minister that an alternative term could be "statutory auditor certificate". It is not a point I wish to labour but I would be glad to be advised by the Minister as to what his preference was or whether he accepted the point the professional bodies are making in relation to the alternative expression there.

Section 213, replacing section 162 of the 1963 Act, as amended, specifically identifies categories of persons qualified to act as the auditor of a company or as a public auditor. To assist in the policing of this section's requirements and to enable members of the public to readily verify the status of individuals acting as public auditor, it has been recommended that, first of all, the description of "body of accountants" used in section 213 (1) (a) be amended to specifically identify the accountancy bodies concerned. I would appreciate the Minister's views on that and, secondly, that a list be available for public inspection — for example, at the companies registration office — of those persons individually authorised by the Minister under the provisions of section 213 (a) (2) or (4). Indeed, those references do not apply to the Bill as amended in the Dáil but to the one that came at Committee Stage in the Dáil so as to avoid heaping further confusion on the confused situation that already exists in terms of these reference numbers. I would be pleased to be advised by the Minister as to his opinion on that.

The scope for recognition of a person as qualified for appointment as statutory auditor is being extended in the context of the implementation of the EC Eighth Directive. It is considered that the use of the generic term "statutory auditor" for all persons so qualified would enable members of the public to readily identify those persons entitled to act as auditors of a limited company or as public auditors. Again, the Minister's response would be appreciated.

Furthermore, as section 213 should specifically provide for recognition to be granted to auditing firms, not just qualified individuals but the firms themselves. Section 169 of the 1963 Act already acknowledges the practice of appointing an auditing firm rather than an individual accountant as auditors to a limited company. I have not been able to find the reference in the Bill we got yesterday as to whether there have been changes on that specific point. I suspect there may have been, as it seems such a reasonable request that the reference be to the auditing firm rather than to an individual auditor per se in relation to auditors to a limited company.

The fundamental opinion of the auditor, especially in relation to third party users of financial statements, is whether the financial statements give a true and fair view of the state of the company's affairs at the balance sheet date and of its results for the period then ended. Generally, concern has been expressed that the lengthy report format now applicable in this country, where opinions are expressed and statements are made on detailed aspects of company legislation, though no breach thereof may have occurred, risks obscuring the essential opinion of the auditor as to the true and fair view. Again, that is a detailed technical point from the professions concerned, but for the record I would like to hear the Minister's response as to whether he shares that concern, whether the lengthy now format applicable could risk obscuring the essential opinion of the auditor as to the true and fair view.

There have been recommendations in earlier company law submissions from the professional bodies that the structure of the auditors' report now specified in section 219 (4) be amended so that the requirements (a) to (d) with (g) are referred to on an exception only basis. Exception only basis is being requested. Apparently, this is the approach which has been adopted for a number of years in the UK and in Northern Ireland. It presupposes that if the detailed Companies Act requirements referred to in those subsections have been complied with, no specific reference thereto is made in the auditor's report. This in no way alters the scope of the auditor's examination in that he or she would still have to form an opinion in respect of each set of financial statements that those detailed provisions have in fact been complied with. Again, the Minister's response would be appreciated as to that view from the professional bodies.

It is noted that in section 198, specifying the "books and documents" to be maintained by limited companies and the related procedures regarding the currency of such records, that that has been deleted. Not having had the benefit of detailed discussion when the Bill was in the Seanad, as I was at that stage in the Dáil, and likewise not having been in the Dáil when the detailed discussion happened there, particularly at Committee and Report Stages, I would appreciate if the Minister could explain the thinking that went behind the deletion of section 198. Questions have been asked about that. There is probably a very rational explanation. I am just unaware of it having missed the debate, having been in the wrong House at the right time, or the wrong time, depending on what way you view it.

It is the view of the CCAB that it would be desirable that the commencement to section 220 (1) "if at any time the auditors ..." be clarified to indicate the additional notification obligations imposed on auditors by the section arising exclusively from the work undertaken by the auditors in planning, carrying out and completing their examinations of financial statements.

Finally, on Part X, the profession bodies urge in relation to ministerial orders made under section 227 — indeed, there are several sections in the Bill which, if I am correct in recalling, allow for ministerial order — which the Minister may consider necessary "for the proper and effective implementation of the Council Directive", that these ministerial orders would only come into force following a positive resolution from both Houses of the Oireachtas. Perhaps the Minister did change the requirement in the Dáil from just laying the order before the House to an affirmative or positive resolution. I feel very strongly, Minister, that a positive resolution of both Houses of the Oireachtas would be necessary, as I think you are taking unto yourself, not only in this section but at other places in the Bill, fairly important matters to change by way of resolution, matters that normally one could expect to debate in further amendment Bills of one kind or another. While technically this may be necessary until you get a further chance to amend the Bill at different Stages or to produce another Bill, I feel that, in the interests of democracy and in view of the important impact on corporate law that this Bill will have, any changes that you may take on board of your own volition should come before both Houses by way of affirmative resolution so that you can have an input from all sides. This particularly applies to the Seanad, where, despite what opinion the Minister may have formed today, there is less political decision in terms of weighing up the benefits of issues before us.

We started off today quite politically, but that was because of irritation with the procedures and the way we are allowed to deal with the Bill. Hence the situation was polarised to some extent. It never left the realms of good nature, but at the same time it was fairly to the point. This House particularly by its very nature is a vocational Chamber, a Chamber which is supposed to tease out the minutiae of legislation generally. Therefore, we should have ministerial orders before us by way of affirmative or positive resolution so that we can actually debate. It could be said we might have more time to give to these matters than perhaps the lower Chamber as they seem to have a queue of legislation waiting to be taken there.

Maybe the vocational benches will be full the next time. They create so much trouble when they are here, it might be nice to have them.

The photo opportunities are long since gone.

As I stated this morning, Senator.

Yes, my case rests at that. I would appreciate guidance from the Minister on the points made. They are of a professional and technical nature. I would be very interested in the Minister's response.

I just want to refer here briefly to Part XI, which is the acquisition of own shares and shares in the holding company. Everybody welcomes the change where companies can apportion their own shares and in line with European provision, acquiring one's own shares will be of benefit and will be welcomed by Irish practitioners. This section follows very closely the United Kingdom Act of 1985. I suppose the wording is slightly different to suit the Irish market, but in regard to the beginning, the power to issue redeemable shares, could the Minister clarify why there was a change in the second part of (a) which originally was "No redeemable shares shall be issued or redeemed at any time when the nominal value of the issued share capital which is not redeemable..." It had been "when there are no issued shares of the company which are not redeemable". It is at the bottom of page 55. I wish for clarification on that because I feel that the change is rather restrictive from "when there are no issued shares of the company which are not redeemable" to "when the nominal value of the issue share capital which is not redeemable is less than one tenth of the nominal value of the total issued share capital of the company." I would like clarification in relation to that. Right through those sections, 202 and 203, there are areas of confusion where it will be necessary for companies to elicit legal advice and opinions in relation to proposals.

If we move further to page 56 I would also like a definition for:

(e) the premium, if any, payable on redemption, must, subject to paragraph (f), have been provided for out of the said profits of the company".

What I really want there is the definition of "said profits". Does it refer back to (d) which is "out of profits available for distribution"? Likewise, in regard to (i) and (ii) of (f) there is clarification needed there, because it is rather restrictive, reducing the use of the share premium account in the issuing of redeemable preference shares.

Moving on to (ii) at the top of page 57, I wondered why it was necessary to alter and bring in a reserve fund. It seems to be a further complication in relation to the Bill.

Moving down to amendment No. 248 at the bottom of the page, the term "treasury shares" relates very much to UK terminology. The whole section there obviously may not be used by Irish companies to the same degree as it would be used in countries where you would have a tremendous number of large companies, particularly PLCs. Perhaps it is necessary to have it all in, but I saw no difficulty with those sections in relation to Irish companies. Perhaps because of the small number of registered companies in Ireland the use may not be necessary, but it certainly does show that it is taken from the United Kingdom 1985 Act, which obviously deals much more widely with PLCs.

A few general points in relation to that section. I feel that when we are talking about the Registrar in Dublin Castle, where he is registering companies, there will need to be more resources in order to implement this Act in relation to registration of companies and particularly in relation to the monitoring of the Act. I believe that until quite recently the said registrar was working under severe pressure with reduced staff. They are still working on the 1986 Companies (Amendment) Act. It is important to stress now that in relation to this, and the register of companies in the implementation of this Act, more staff will have to be allocated to that register if this Bill is to be implemented. It is all right discussing a Companies Bill for two and a half years or whatever, but what counts is the actual implementation of the Bill at the end of the day.

Likewise, practitioners are now dealing with the Companies Acts of 1963, 1977, 1982, 1986 and, possibly at the end of tonight, 1990. Really, it must be very complicating to have to refer back over and over again to all those Acts. They have enough to do in relation to the complications of business, particularly in the light of the European integration and harmonisation. Would it be possible that at some stage there would be a consolidated Act which would bring all of those together? The United Kingdom 1985 Act did that, but already there is a 1989 Act tagging on to it. Has the Minister anything in mind in relation to the consolidation of all of these Acts? In view of the complications spanning the years 1963 to 1990, it would be important that the whole lot would be consolidated together.

Could the Minister clarify those few points in relation to that section, which seems to be more or less in line. As I said, it has been taken more or less from United Kingdom legislation. Some of it will be relevant to us as regards the acquisition of shares. Other parts of it will not be particularly relevant because we are a country with a small register of companies in comparison to Britain, where you would have far larger companies registered, PLCs in particular.

I will see to reply to the different points made as best I can. Senators will realise that many of the points raised were relatively minor technical points which perhaps could be best dealt with by correspondence rather than tyring to give definitive answers to them here. Senator Doyle was quoting from a circular letter that, I think, the CCAB sent out. I gather that those people are in my Department every week and they are not seriously concerned about those points. They are matters that we can adjust as between the regulations and orders that will be made implementing or commencing the different Parts and different sections, because a lot of such orders will have to be made and some of this will come into a lot sooner than more of it. The points of information can be clarified well in advance of that. The points raised by Senators that I do not answer tonight, because there is so much detail involved, I will answer in correspondence with the Senators as required.

In regarding the points raised by Senator Doyle in connection with regulations to amend the Part which she felt should require a positive resolution, the power to amend by regulation is normally within the framework of the Part concerned. The principles, if you like, are settled by the legislation which is contained in the Part. Because of the very technical nature of it, because of the fact that it keeps changing from time to time, or the requirements keep changing, it is more appropriate to implement the very detailed but not the principle Parts by regulations, particularly as they may have to be changed.

In this kind of area we are constantly looking over our shoulder, for example, at what they are doing in Luxembourg in particular. We need flexibility to keep up with them. In a few instances in this Bill, if the Senator has the opportunity to study it in full she will find that there are provisions for the making of regulations which only come in on the passage of a positive resolution in each House. The other and more common form of regulation is made on the basis that it is valid unless it is disallowed in either House within 21 sitting days. I am afraid the bulk of them we have to do that way, because a lot of this has to be done, for example, in the Summer Recess, or sometimes it has to be done at a few day's notice. Even if both Houses are sitting, as we well know it is difficult to get a number of these motions listed. It is not so bad in this House, but it is very difficult to get them listed in the Dáil. There are motions on the Dáil Order Paper in my name at the moment that I cannot get taken. I would be fearful of a situation arising whereby some obvious malpractice has been identified and is being availed of widely which we would have power under the Act to stop by regulation, by changing the regulations or amending them, and we would not be able to do it perhaps for several months. That would be undesirable. But where a question of principle is involved there is provision in this Bill for positive resolution in one or two of these appropriate cases.

On the question of the purchase by a company of its own shares, I have received various representations from different business interests on this Part of the Bill. However, I have to say that these provisions relating to the purchase of own shares were first published on 21 November 1989. They were debated for the first time in the Dáil on 26 June 1990, which was more than seven months later, and by the Special Committee, which accepted them with a minimum of comment and a minimum of amendment. Such comments as were made led to my introducing six amendments on Report Stage only last Wednesday. Thus, I think there was ample opportunity for the necessary amendments to be tabled and discussed in the Dáil. The period of availability in the Dáil was 13 months from the time of the publication of the proposals.

As regards the views expressed on this Part by business interests, we have considered these very recently. I believe that our provisions provide the right balance between the need to maintain capital, the need to protect the interests of shareholders, the need to protect the interests of creditors and the desirability of giving Irish companies the freedom to purchase their own shares. It depends from what point of view you are viewing it. If you are a proprietor or a shareholder, you may take one point of view. If you are a creditor or a potential creditor, obviously you would take another. I think that the balance is reasonably struck in these provisions. I do not anticipate a major problem with them, but I certainly would be open to amend them if after a year or two of practice with them showed that there was any form of defect.

On Part XII, Senator Jackman inquired about the prospects of a consolidation Bill. She listed off a lot of the extant legislation on company law, beginning in 1963, including already an Act in 1990 and, hopefully, this one, also in 1990, but just. On the face of it, it would be ideal to do a consolidation Bill. I have to now give the Senator a truthful answer that there is not a hope, not a hope.

Let it be an aspiration.

I will undertake it if she is prepared to make representations on my behalf to the appropriate quarters for an additional Assistant Secretary, two Principal Officers, four Assistant Principals and eight HEOs. I will give her her consolidation Bill then within a year or two but otherwise the answer is no. As an example of the pressure we are under in terms of legislation in the companies field, when this is passed we will have to start again on another Companies Bill. There are 11 Community directives to be implemented outside of the ones we have in this Bill. We have to give them priority together with whatever amendments of this Act may be necessary. It would be unwise, at a time of fluidity in company legislation to have a Consolidation Bill because it would become out of date rapidly. I have to give priority to the 11 directives that I was not able to include in this Bill. If I had included them, we would be another year at the Bill.

Senator Doyle asked why section 198 was deleted from the yellow text. What is now section 228, which is inserted by amendment No. 239, is essentially what comprised the original section 198.

That was done on Report Stage.

Yes, the Bill passed by the Seanad, with a new subsection (2) added, together with some consequential textual changes. This section was deleted in the Special Committee of the Dáil when, after some Opposition amendments had been defeated, the section was then challenged although I do not think there was any real objection to the section. The objection was to the nonacceptance of the amendments to the section, but the section was challenged for pig iron, or for whatever, and there was an equality of votes.

Who was in the Chair?

It does not matter who was in the Chair because the Standing Orders of a special committee state that the chairman shall have only one vote. He votes in the first instance and does not have a casting vote. The equality of votes was on the motion that the section should stand part of the Bill. Under the Standing Orders that was declared lost because on an equality you cannot change the status quo. The provision is a very important section in this Part and it was reinstated on Report Stage in the Dáil, subject to the one change I mentioned. The section the Senator mentioned now has been reinstated through the amendment in question, with the sort of amendment that she thought was desirable to the original section 198.

I will deal very briefly with some of the CCAB points. On the question of whether a firm of auditors should be entitled to be appointed as an auditor, this is already possible under section 160 (a) of the 1963 Act, whereby the appointment of a firm is taken to be the appointment of anyone in that firm who is individually qualified to be an auditor.

Senator Doyle asked that the bodies of accountants be named in the Bill. Amendment No. 191, which introduces the new section 222, retains the procedure first set down in section 162 of the 1963 Act whereby the actual bodies are not specified. They have not been specified by name since 1963. I regard this as the best way to deal with the matter as otherwise, if I recognise another body, we would have to amend the primary legislation. That would be undesirable. I can see why the existing bodies would prefer if they and they alone were named so that if anybody else were to come in there would have to be a new Bill. I do not regard that as right. One should leave open the possibility of some others being added in.

Senator Jackman made a point about the resources that are available in the CRO. I agree they are not sufficient but there is nothing I can do. We do not have enough people. There are serious shortages in the Department and we have to live with that. The overall size and cost of the public service is, unfortunately, too high. My thinking on these matters is that where you have outside offices of a Department performing a particular function, I would like to be able — I think the Government may agree to this when we have thought it through a bit more fully — to set them up as quasi-autonomous bodies away from the Department and not subject to the same constraints of recruitment and numbers, subject to the proviso that they are self-supporting.

I have not gone into the economics of the Companies Registration Office and I do not know whether it is self-supporting at the moment. It might be possible to achieve that. It is being done in the Land Registry, as the Senator probably knows. The Patents Office is profitable and not just self-supporting. I will look at the possibility of doing it in regard to the Companies Registration Office. As things stand, I regret to say that I cannot increase resources as we do not have the money.

The Companies Registration Office has become a great deal more efficient with the advent of new technology there. We are still in the relatively early stages but I signed a contract earlier this year for a large computer and a lot of equipment. Gradually all information in the Companies Office will be part of electronically recorded data and will be available much more quickly and readily to the public. Importantly, it will be available to people other than callers to the office in Dublin. It can be picked up on whatever form of telecommunications people use. That is long overdue. In that sense, hopefully, without increasing numbers, its efficiency can be improved.

I know there are some other detailed points but if the Senators do not mind I will deal with those by correspondence. Some of the points were dealt with already. I thank the Seanad for its reception of this Bill. It is most important commercial legislation. It had a fairly remote genesis and has been going through both Houses for almost four years. It is very long and complex and because of this I cannot be absolutely certain that every line of it is perfect. I am sure there will be defects in it that will come to light but it is what is required. It will be of great importance and value to the economy in regulating commercial activity while, at the same time, giving as much self-regulation as is possible to those who are involved with the State only in a general supervisory way or an overseeing way rather than being actively involved in day-to-day regulation. There will be a considerable relief in many quarters when the Bill finally becomes law which I hope it will very shortly if the Seanad agrees to these amendments and if it is signed by the President.

May I, in conclusion, mention some names with the permission of the Chair, which I do normally do and which is not the convention. At this stage after such a monumentally long period of debate in both Houses, I should like to pay tribute to the two officials in the Department of Industry and Commerce who dealt with this Bill from the start, Mr. Purcell and Mr. Madigan. I have plenty of experience, over 22 years now, in piloting legislation through the two Houses and I have rarely come across a more difficult Bill than this. Equally I have never come across a Bill that was better done at official level than this one in spite of huge pressures particularly in the last few months. It was quite remarkable that this Bill and all matters associated with it were dealt with at the same time as the Irish Presidency was involved in much complicated company law matters in Europe, which work was done by the same people. It is a remarkable feat on their part. I would like to pay special tribute to them because I am not just grateful to them, I think the whole country should be grateful for what they have done in such difficult circumstances. It is as well to remember that the work done by two, three or four officials in Ireland is often done by 80 or 90 officials in other jurisdictions.

I wish to respond to the concluding remarks of the Minister. I would like to thank him for his attitude towards the debate. I join with the Minister in the tribute he paid to the officials who helped to prepare the legislation. He also devoted quite an amount of energy and time to it and I want to record that also.

The Bill, when enacted, will be useful legislation. That is my hope but I cannot be certain, for reasons we have already dealt with today and which I do not want to repeat. It is important that Members of the House be given every opportunity to prepare themselves fully for any legislation coming here. We sought today to have the Bill recommitted to Committee Stage and the Government refused and, because of this, we will oppose the passage of these amendments, not because of what is in the Bill but to put the Government on notice that the manner in which this Bill was brought in here today is unacceptable. It is to put down a marker that in future the Seanad must receive adequate opportunity to deal fully with any legislation coming before it.

I wish to thank the Minister and his officials.

I suggest it would be more appropriate if the Senator availed of Fifth Stage to do that. Is Report Stage Agreed?

Question put.
The Seanad divided: Tá, 23; Níl, 12.

  • Bohan, Eddie.
  • Conroy, Richard.
  • Dardis, John.
  • Fallon, Seán.
  • Farrell, Willie.
  • Finneran, Michael.
  • Fitzgerald, Tom.
  • Foley, Denis.
  • Honan, Tras.
  • Hussey, Thomas.
  • Keogh, Helen.
  • Kiely, Dan.
  • Kiely, Rory.
  • Lanigan, Michael.
  • Lydon, Don.
  • McCarthy, Seán.
  • McKenna, Tony.
  • Mooney, Paschal.
  • Mullooly, Brian.
  • Ó Cuív, Éamon.
  • O'Keeffe, Batt.
  • Ryan, Eoin David.
  • Wright, G.V.

Níl

  • Cosgrave, Liam.
  • Doyle, Avril.
  • Howard, Michael.
  • Jackman, Mary.
  • Kennedy, Patrick.
  • McDonald, Charlie.
  • McMahon, Larry.
  • Naughten, Liam.
  • Neville, Daniel.
  • Ó Foighil, Pól.
  • O'Reilly, Joe.
  • Staunton, Myles.
Tellers: Tá, Senators Wright and McKenna; Níl, Senators Howard and Neville.
Question declared carried.

I find it ironic that the Independent Senators held up the proceedings of this House for three hours and not one of them had the interest to be here tonight.

The Senator is out of order. Resume your seat, please. Is the Bill agreed?

It is amazing how business can be done in this House when those over-educated university mavericks are not here.

I must ask the Senator not to engage in anything that will cause further difficulties for this House.

Question, "That the Bill do now pass", put and agreed to.

I thank the Minister and all who contributed to this very excellent debate.

When is it proposed to sit again?

At 2.30 p.m. on Tuesday, 18 December 1990.

Barr
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