Corporate enforcer, Mr Paul Appleby, received close to 2,000 reports of suspected company law crime last year, according to a review of 2003 published yesterday. Barry O'Halloran reports.
The Office of the Director of Corporate Enforcement (ODCE) reported that the number of auditors' reports of suspected company law offences more than trebled in 2003 to 1,500, from 399 the previous year. At the same time, the number of complaints from the public and other sources doubled to 448.
The allegations included failure to keep proper books of account, directors' loans that exceeded limits laid down in company law and failure to provide information to the Companies' Registration Office (CRO).
During the year, the director successfully prosecuted 45 people, who were connected with 17 cases, in the District Court. The review said that 30 of these convictions related to 13 cases of failure to keep proper books of account.
Of the remaining four, the court also banned one individual from acting as a company director. It was discovered that he had held such a position while an undischarged bankrupt.
The director can prosecute minor offences in the District Court and refer serious breaches of company law to the Director of Public Prosecutions (DPP). Mr Appleby told The Irish Times yesterday that he had not referred any cases to the DPP in 2003. By the end of the year, there were a further 13 prosecutions pending.
In the course of its investigations into corporate crime during the year, the office executed 10 search warrants, had 10 people arrested and five people detained. It also served 13 court orders for the production of banking documentation. Its staff is supplemented by a number of gardaí seconded from the force's fraud office.
The director was pursuing a number of high-profile investigations at the year's end. These included the examination of Dunnes Stores Ireland and Dunnes Stores (ILAC Centre) Ltd. That investigation arose out of Moriarty tribunal revelations about the dealings of former cabinet minister, Mr Michael Lowry, and former Dunnes Stores boss, Mr Ben Dunne.
The High Court inquiry into National Irish Bank and National Irish Bank Financial Services Ltd is also ongoing, while the director is waiting for the same court to rule on allowing it access to the Ansbacher inspector's papers.
The office received 820 liquidators' reports during 2003, and dealt with 600. This resulted in the restriction of 189 directors during the year. In previous years, the average number of directors restricted was between 25 and 30.
Since mid-2002, liquidators are obliged to send their reports to Mr Appleby. He then decides which directors of insolvent companies should face restriction proceedings. However, it is the liquidators, not the ODCE, who bring the directors to court.
Last year, he ruled that the directors of more than 300 liquidated companies need not face proceedings. Directors in more than 200 cases had to justify their conduct to the High Court. In the remaining cases, just some members of the relevant companies' boards faced proceedings.
Anyone who is restricted may not act as either a director of secretary of limited companies for five years, unless the businesses are capitalised over certain thresholds, €127,000 in the case of public companies and €25,400 in the case of private limited companies. The Companies Office also publishes the names of restricted and disqualified directors.
In restriction proceedings, the directors of insolvent companies are required to show that they acted honestly and responsibly at all times. In cases involving fraud, they can be disqualified completely from acting as directors for five years.
The ODCE's review warns that there is an ongoing problem with insolvent companies that are continuing to trade.
It said that it had contacted the directors of 12 companies it suspected should be placed in liquidation and said that it would bring restriction proceedings in the absence of satisfactory replies.
