Dáil Éireann Debate, Thursday - 7 October 2004
2 Mr. Howlin asked the Minister for Enterprise, Trade and Employment the action he has taken or intends to take arising from the report of the High Court inspectors into the affairs of a bank (details supplied); and if he will make a statement on the matter. [23790/04]
Amharc ar fhreagraThe inspectors appointed to National Irish Bank Limited and National Irish Bank Financial Services Limited, on application by the Minister under section 8 of the Companies Act 1990, presented their report to the High Court on 12 July 2004. The court furnished a copy of the report to the Director of Corporate Enforcement, as required by section 11 of the 1990 Act. The report was subsequently published on the order of the court. The court also ordered that a copy of the report be sent to relevant authorities, including the Irish Financial Services Regulatory Authority, the Revenue Commissioners and the Director of Public Prosecutions. Primary responsibility for follow up action on the matters raised in the report rests with the various statutory agencies.
Following the commencement of the Company Law Enforcement Act 2001, it is now the statutory responsibility of the Director of Corporate Enforcement to pursue the possible breaches of the Companies Acts identified in the report. The Act requires the director to perform his functions with respect to the Companies Acts on an independent basis. It is not, therefore, the practice of the director to report to me on any individual case or issue which is the subject of examination by his office. However, the director has emphasised his determination to take appropriate action on foot of the report.
The report further confirmed the concerns the Tánaiste and the Government had for some time about the extent to which companies and their officers complied with the requirements of company and other law. However, the Tánaiste did not wait for the completion of this or other reports before taking action to ensure that any regulatory failures coming within the Minister's area of responsibility were dealt with.
Within my area of responsibility, various initiatives have been taken in recent years to improve the regulatory framework. These include proactive enforcement of the provisions of company law by the establishment and resourcing of the Office of the Director of Corporate Enforcement; increased penalties and additional resources to ensure companies meet their filing obligations with the Companies Registration Office; better oversight and regulation of the accounting and auditing profession by the proposed establishment of the Irish auditing and accounting supervisory authority; establishment of the company law review group on a statutory footing to ensure that the provisions of our company law are appropriate to the needs of Irish society; the introduction in the most recent Companies Act of new requirements on company directors of significant corporate entities to prepare an annual statement in respect of the company's compliance with company, tax and other key legislation.
The Government has also strengthened the regulation of the financial services sector in two Central Bank and Financial Services Authority of Ireland Acts in 2003 and 2004, including the establishment of the Irish Financial Services Regulatory Authority.
I wish the Minister and his Ministers of State well in their new responsibilities. Obviously, we must give the Minister some leeway to read himself into the brief but it is disappointing that in his replies to the two questions so far, the civil servants are winning the argument. Perhaps things will change in the future.
The Minister has outlined the situation with NIB. That was an absolute scandal which rocked public confidence in the banking system to its core. The Tánaiste said, on publication of the report, that too many people, including the bank itself, saw themselves as above the law and believed they could get away with what they did. What action has the Minister taken since his appointment to acquaint himself with the full implications of the report? Has he sought a meeting with the Director of Corporate Enforcement? Does the director have legal responsibility to report to the Minister on this matter? Does the Minister see it as his responsibility to ensure that the banking institutions in the State have public confidence and that where there is flouting of the law, as was clearly evident in the inspectors' reports, people will be called to account?
Legislative changes were mentioned in the Tánaiste's statement in July. What progress has been made by the Department since July in dealing with that and when will specific proposals be brought before the House?
I must take issue with the Deputy. Obviously, I share his concerns about the findings in this report. However, with regard to the issues and the role of the courts and the director, the director is independent in his function of pursuing these issues, as are the relevant authorities. The key issue now is that any breaches that may have occurred are properly prosecuted by the respective authorities. That is happening in this case.
The courts ordered that this report be sent to the relevant authorities, including IFSRA, the Revenue Commissioners and the Director of Public Prosecutions. The primary responsibility for follow-up action on this report is with those authorities, given the serious and grave matters raised in the report across the wide range of issues investigated. I have read the report. It was issued prior to the August bank holiday weekend and I recall publicly commenting at that time on RTE about the issues.
The Tánaiste took many pre-emptive actions in terms of legislative responses, not least with the establishment and resourcing of the office of the Director of Corporate Enforcement. Other legislation has also been passed and recent statistics show that this is beginning to show results. The Companies Registration Office, for example, reported for last year that 14 companies and 39 directors were convicted for breaches of company law. The Office of the Director of Corporate Enforcement reported that last year the number of convictions for breaches of company law had doubled. There were 45 successful prosecutions for company law offences and hundreds more cases are due before the courts. There was also an increase in directors being restricted from 25 in 2002 to 164 in 2003. The legislative measures put in place are beginning to bear fruit.
Is the Minister aware that today at a conference in Wexford the General Secretary of the Irish Bank Officials Association said there is something rotten at the core of banking in Ireland? Does he have a response to that statement? Is the Minister saying he is content that all that can be done to bring those who were complicit in wrongdoing to account is being done and that he believes there is nothing further he or his Department can do? Will he also confirm that he proposes to bring no further legislative improvements to the House?
As I said, there will be further legislation on company law in the future. However, with regard to this issue, it was this Government that took the initial decision to establish the investigation on foot of some good work undertaken by RTE in the context of NIB. The Tánaiste took resolute action in establishing this comprehensive investigation and it has produced significant results. It is not a question of being content that it is being referred further. It is now a matter for due process and politicians and Departments are not the correct vehicle for prosecuting breaches of the law.
