McCann Fitzgerald Solicitors Corporate Department Conference 19 September 2003

Office of the Director of Corporate Enforcement The ODCE’s Developing Role Paul Appleby, Director

Outline of Talk The ODCE’s Five Strategic Goals Progress to date under each Goal Conclusion – what lies ahead?

Purpose underlying ODCE Goals Facilitating Sound Competitive Enterprise Minimising Business Risks Protecting Business/Government Revenue Enhancing Ireland’s Business Reputation Supporting Societal Cohesion

The ODCE’s Principal Goals Improving Company Law Compliance Uncovering Suspected Breaches Prosecuting Detected Breaches Sanctioning Improper Conduct in Insolvent Companies Providing Quality Services

Improving Company Law Compliance (1) Publishing Accessible Information Seven Information Books on Obligations/Duties Scope of Auditor Mandatory Reporting Requirement Liquidation-Related Functions of the ODCE Consultation Paper on Directors’ Loans

Improving Company Law Compliance (2) Promoting Compliance Programme of Presentations, Articles, etc. Engaging with Business via Consultation Papers Website Development Media Work Effective Enforcement

Improving Company Law Compliance (3) Improving Company Related Provisions Supporting the Company Law Review Group Assisting the planned Irish Auditing and Accounting Supervisory Authority Advising the Department of Enterprise Trade and Employment on Compliance/Enforcement Issues Strengthening Professional Standards

Uncovering Suspected Breaches (1) Auditor Reports of Suspected Indictable Offences Volumes: 400 in 2002; 1,000 so far in 2003 Offences: 75% relate to Filing/Similar Offences 15% are about Directors’ Loans 7% deal with Failing to hold EGMs 3% relate to Inadequate Books Actions:Filing Offences referred to the CRO Most of the rest are under investigation

Uncovering Suspected Breaches (2) Public Complaints Volumes: 200 in 2002; 250 so far in 2003 Offences: 35% disclose no Company Law Issues 21% relate to Civil Matters/Debt Issues 15% are filing defaults 29% cover a range of issues Actions:Many closed, others being assessed

Uncovering Suspected Breaches (3) Matters of Public Record Tribunal of Inquiry/Inspector Reports Media Disclosures CRO Database Inter-Agency Co-operation Garda Siochana MOUs planned with Revenue, IFSRA, etc.

Prosecuting Detected Breaches (1) Criminal Enforcement so far Convictions: Offences: Failing to Keep Proper Books Falsification of Documents Undischarged Bankrupts Directors’ Loans Unqualified Auditor

Prosecuting Detected Breaches (2) Civil Enforcement so far Compliance Order -7 Disqualifications -1 Property Seizure -1 Seeking Information 2- Judicial Review 11

Prosecuting Detected Breaches (3) Investigations so far Search Warrants 5 7 Bankers’ Books 7 13 Arrests - 6 Detentions - 3

Sanctioning Improper Conduct in Insolvent Companies (1) Phased Commencement 1 June 2002: insolvent companies to which a liquidator was newly appointed or was appointed on or after 1 July June 2003: insolvent companies to which a liquidator was appointed on or after 1 January 2000

Sanctioning Improper Conduct in Insolvent Companies (2) Volumes so far Liquidator Reports Cases Determined Full Relief (52%) Partial Relief - 21 (4.4%) Relief at this time - 28 (5.8%) No Relief (37%)

Sanctioning Improper Conduct in Insolvent Companies (3) Some Section 56 Reports under criminal investigation Notable Absence of Section 299 Reports Unliquidated Insolvent Companies Restricted/Disqualified Directors Supervision of Liquidators (Demands for 20+ Companies in Liquidation)

Quality Services Informative Website at Publications (Annual Report, etc.) Complaint Form Compliance Information Liaison Group with Accountants

Conclusion Compliance Work is in continuing demand More Information on Misconduct needed Completion of Investigations a priority Liquidator Reporting, etc. well underway Resources will be kept under review