Company liquidators will have to report on the conduct of each director of an insolvent company under new procedures outlined yesterday. They will be required to give their opinion in writing to the Office of the Director of Corporate Enforcement within six months of their appointment on whether each individual director "has acted honestly and responsibly in relation to the conduct of the company's affairs", according to the director, Mr Paul Appleby.

His office will then have three months to decide whether the liquidator should be relieved of their obligation to apply to the High Court to have the directors "restricted".

Once it replies, the liquidator will have two months in which to issue proceedings against directors - proceedings must be issued unless the director relieves the liquidator of this obligation.

Mr Appleby wants comment from liquidators and other interested parties by Friday, May 3rd, on consultation papers published yesterday. He wants to have the provisions in force by June 1st, when they will apply to all new liquidations from that date and to liquidations started from July 1st, 2001 and still in progress.

The office expects to get in about 400 reports within six months of the rules coming into force.

The new procedures should help "to pick up evidence on directors who have made a habit of setting up companies, abandoning them when insolvent and starting again" - the so-called Phoenix syndrome - Mr Appleby said.

This information could be used by State authorities or other regulators in deciding on the issuing of licences to run regulated services, he suggested.

The consultation papers set out how the director proposes to implement its supervisory powers over companies in liquidation and to address the problem of unliquidated insolvent companies.

"The Liquidation-Related Functions of the Director of Corporate Enforcement" - C/2002/3 - is based on the powers set out in Part 5 of the Company Law Enforcement Act 2001. In this paper, Mr Appleby set out how liquidators should report to his Office under section 56 of the Act. Liquidators will have to complete a six-page form requiring information which "should be readily available" to the liquidator, he commented.

The director will publish details of liquidations on its website (www.odce.ie) to "open another line of information directly to the office from creditors or other sources ... so we can check against the information and opinions given later by liquidators". It also wants to be made "a notice party" to all proceedings taken by liquidators so that it can bring up any information it received in court.

Consultation paper C/2002/4 - "Unliquidated Insolvent Companies" - is based on the powers under section 251 of the Companies Act 1990 (as amended by section 54 of Company Law Enforcement Act 2001). Mr Appleby's office will only intervene in "exceptional cases in the public interest".

The intervention criteria will include where there is a pattern of disruption in particular sectors or where individuals have undertaken and abandoned similar type companies.