A report today claims serious misconduct appears to be present in one in five insolvencies.
A consultation paper published today by the Director of Corporate Enforcement, Mr Paul Appleby, said that since the introduction of statutory reporting requirements on insolvencies last year, serious misconduct appears to be present in about 20 per cent of insolvenct cases.
Mr Appleby proposes that all liquidators appointed to insolvent companies on or after January 1st, 2000, and before July 1st, 2001, will be obliged to report to him where these liquidations are still ongoing at June 1st, 2003.
Under Section 56 of the Company Law Enforcement Act 2001, which came into effect in June 2002, a new reporting regime was created for liquidators of insolvent companies.
This was to address the situation described in the McDowell Report on Company Law whereby the conduct of the directors of insolvent companies in liquidation was not subject to any scrutiny, other than in the case of High Court liquidations.
If a court orders the restriction of a director, he/she is effectively barred from participation of any kind in the affairs of any company for five years - unless that company is capitalised above a certain minimum figure.
Mr Appleby has invited written submissions on the consultation paper by close of business on Monday, March 31st.