Civil servant steps out of shadows to spread word on company compliance

As a civil servant, Paul Farrell is a reluctant interviewee

As a civil servant, Paul Farrell is a reluctant interviewee. Yes, the Civil Service has become more transparent but it still prefers to operate behind the scenes.

He was warned he would have to reveal what time he gets up in the morning. Most people lie and say something about 6 a.m. Mr Farrell, in fact, will answer that one. He rises at 8a.m. and walks from his 100-year-old home near Clanbrassil Street to his office in Parnell Square.

He uses "we" a lot. But it is not the royal "we", he points out, rather the teamwork approach of the civil service. Equally, he is uncomfortable about "personalised issues".

"One does not want to be faceless anymore and to run away from responsibilities but, at the same time, the Civil Service operates in an advisory world to the political world," he says.

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But as Registrar of the Companies Office, he concedes that he is not quite in the same mould as a department official, hence the interview. He has a message to get across, which is that companies should get on board, accept the new regime of compliance and file their annual returns annually.

Under the impending legislation, the striking off or prosecution process will begin after a year has elapsed from the date when the annual returns are due. It will mark a big change to the current process, which begins when annual returns have not been filed for two consecutive years. Now the message has to get out.

"What we have to have is the accountant saying that you could be prosecuted," he says.

Currently, not much more than 13 per cent of companies are filing returns in time, although this figure is distorted by the number of companies registered but no longer trading. In the long run, the more widespread the compliance, the more resources can be diverted into a user-friendly electronic system, enabling companies to file electronically. Meanwhile, the Companies Office website will be operational this autumn, providing users with database access, but for a fee, of course.

"The whole trend is going to be towards getting the information on your desktop rather than visiting an office to find it out," Mr Farrell says.

But the approach will not work, he says, if "people outside" continued to do business in the old "technophobic" way.

"With the professions, the take-up and the approach is very fixed. You could be talking to one person one minute who is pressing you to make leaps into the 22nd century not to mind the 21st, but the next time you could be talking to someone who is proudly telling you they are getting a PC into their office."

Farrell is from the South Circular Road in Dublin and lives with his wife, Maeve Garrett, and two daughters, in the house his father, a house painter, grew up in. It provides some opportunities for the DIY he enjoys.

He went to school at the Christian Brothers College in Monkstown, studied architecture for a while in Bolton Street but found the "4B pencil" was not for him. He ended up in the Civil Service, working as a mapping draughtsman for the Land Commission initially, mapping residual estates which had not been distributed. Later he took the executive officer exams and moved on to work in price control "when there was a regime for getting approval for price rises for everything from milk to taxis to restaurants."

He is a former private secretary to Mr John Bruton in the Department of Industry and Commerce and Ms Maire Geoghegan Quinn in the Department of the Gaeltacht. "It improved under pressure, let's just say, while I was there," he says of his Irish. The association with the Companies Office began when he was appointed manager in 1985, fulfilling pretty much the same role as he does now. Before being appointed registrar, there was an interlude when he became an industry attache at the Council of Ministers in Brussels from 1993 to 1997, an experience he enjoyed tremendously although he regrets not sampling more Belgian beer.

The post involved moving his family over and seeing his daughters quickly surpass him in their command of French.

When he first started in the Companies Office, it could take three hours to find a file. Up to 25 per cent of the files were unavailable and commercial transactions were being held up because it was difficult to find out if properties had mortgages outstanding on them. "People were annoyed. People did come in, mostly foreigners, asking `why can I not access the accounts of this company?' " he says. "We reckoned we would have to have 20 or 30 staff simply running the filing system. The first thing we had to do was computerise some of the records to try to identify some companies for prosecution."

The office is striking off 500 companies a day - 28,000 since last September - as it goes through an enormous backlog of registered but now defunct companies, some of which were set up to carry out one business transaction. It uses an electronic online system to store about two million documents.

The rate of expansion of company registrations has been exponential. It took more than 100 years to have more than 100,000 companies registered. In the past 10 years, this has risen to more than 250,00 0.

Under new legislation, which will create a Director of Corporate Enforcement, the Companies Office will be empowered to impose on-the-spot fines for some summary offences under the Companies Act, although a strike-out policy will take precedence over a prosecution one for some time. He describes the reluctance to divulge information on one's business as one based on keeping affairs hidden from neighbours. "And people have objected to their accounts being disclosed to other companies," Mr Farrell says.

But the system is necessary, he says, for people to know who they are dealing with in business and the financial health of the companies they come in contact with. A whole mini-industry has sprung up around the reporting of companies' creditworthiness. Credit reference companies buy copies of the Companies Office files for £50,000 annually.

"Most of this is business to business. It is one company interested in another. So the data that is going out is going out to exactly the same people who are filing it," he says.