Bovale Developments, the building firm which has featured in the Flood tribunal, is likely to be among the first batch of companies investigated and prosecuted by the new Office of the Director of Corporate Enforcement (ODCE).
Bovale is among 150 firms which have been registered in the Companies Registration Office by their auditors as not having kept proper books of account.
The director of the ODCE, Mr Paul Appleby, has said his office will take the filing of such auditors' certificates as "evidence that a breach of the Companies Acts has occurred, and proceed to prosecute".
Auditors will be asked to present themselves in court for the prosecution of such cases. The ODCE may also question auditors in private as to the reasons why they filed their certificates, and use these interviews when deciding whether more wide-ranging inquiries, including criminal inquiries, are warranted.
McGrath & Co, of Pembroke Row, Lower Baggot Street, Dublin 2, filed a "notification that proper books of account have not been kept" against its audit client, Bovale, in August 2000.
The notification is one of 68 filed in the past two years, reflecting a significant increase in such filings which followed the Tβnaiste, Ms Harney's pointing out in 1997 that such an obligation existed and that auditors were failing in their duty to do so.
A search for such certificates conducted for The Irish Times found that 152 had been filed since 1992. The majority of the companies concerned are small operations which would not be known to the public.
The list does, however, include Butlers Engineering Ltd, the Portarlington, Co Laois company which was mentioned during the Moriarty tribunal. The company supplied steel to Celtic Helicopters for the construction of a hangar at Dublin airport and, it is understood, took shares in the helicopter company by way of payment. Mr Ciaran Haughey, son of former taoiseach Charles Haughey, is a director and founder of Celtic Helicopters.
A certificate that Butlers had not been keeping proper books of account was registered in December 1995. The company went into receivership in February 1996. Its assets have since been brought by SIAC and the operation now employs 140.
The latest filed accounts for Bovale are for the year to June 30th, 1998. The accounts contain a note from the auditors stipulating that evidence has been given to the Flood tribunal by the Bovale directors which would have "a fundamental effect on the financial statements" and related tax returns, but that it was not possible to estimate what that effect could be.
The latest annual return - the document which contains details of shareholders, indebtedness and directors - which has been filed by the company, is to March 1999. It gives an indebtedness of £10.9 million (€13.84 million). The directors are Mr Thomas Bailey, Coolcommon, Batterstown, Co Meath, and Mr Michael Bailey, Kilamonan House, the Ward, Co Meath. In June 2000, Mr Michael Bailey apologised at the Flood tribunal for keeping the accounts of Bovale "in a wrong fashion".
Mr Desmond O'Neill SC, for the tribunal, said the manner in which the books were kept was sufficient to fool the company auditors from 1983 to 2000.
Interview of the week: page 5
