Strict legislation to deal with corporate crime was introduced in the Dail yesterday by the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney. She described it as the "most radical action taken by an Irish government to reform the enforcement regime".
The Company Law Enforcement Bill, which establishes the office of Director of Corporate Enforcement on a statutory basis, "signals a clear intention on the part of the Government to seriously address corporate crime and malpractice in Ireland", Ms Harney told the Dail.
The Minister said Ireland's reputation "as a safe and well-regulated place in which to do business has, in recent times, been seriously damaged by the emergence of strong indications of widespread abuse of company law".
With this new legislation, the director "will lead a dedicated team of accountants, lawyers, civil servants and gardai in a concerted effort to bring to book those who flout our company laws and damage our international reputation".
Opposition parties welcomed the legislation but Fine Gael's enterprise spokesman, Mr Denis Naughten, questioned the Tanaiste's commitment to providing the resources for policing it.
Ms Harney "has made great play about the future availability of lawyers, accountants and a special group of gardai to assist the new agency in its work. Demands last year for specially assigned gardai for the Competition Authority are still being met with stony silence," he said.
Under the legislation, the Director of Corporate Enforcement will have sweeping powers to fully investigate and enforce the provisions of the Companies Act through injunctions, prosecution and prevention. The Minister expects that the power of prosecution will result in "many more convictions being secured".
It will also introduce a specific annual return date for each company by which time it must file its returns. The law will give the Director of Corporate Enforcement power to seek a court order to disqualify someone from being a company director or from holding any role connected with the promotion, formation or management of a company.
It addresses the so-called "Phoenix Syndrome" whereby companies go out of business leaving unpaid debts and directors then set up new businesses without responsibility for those debts. The new Bill puts responsibility on company directors to ensure their firm complies with the requirements of the Companies Act. It also imposes obligations on auditors and accountancy bodies, including a requirement to report to the director if they believe breaches of the Companies Act might have occurred.
Labour's Enterprise, Trade and Employment spokesman, Mr Pat Rabbitte, said he had the impression that "some at the top of Irish business don't appreciate that incorporation and limited liability is a privilege". He said the question "needs to be asked whether some of the individuals recently paraded in the investigatory limelight ought to be free to set up a web of companies."
