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 OffencesVolumes: 400 in 2002; 1,000 so far in 2003Offences: 75% relate to Filing/Similar Offences

15% are about Directors’ Loans7% deal with Failing to hold EGMs3% relate to Inadequate Books

Actions: Filing Offences referred to the CROMost of the rest are under investigation

Uncovering Suspected Breaches (2)

Public ComplaintsVolumes: 200 in 2002; 250 so far in 2003Offences: 35% disclose no Company Law Issues

21% relate to Civil Matters/Debt Issues15% are filing defaults29% 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 DatabaseInter-Agency Co-operation • Garda Siochana• MOUs planned with Revenue, IFSRA, etc.

Prosecuting Detected Breaches (1)

Criminal Enforcement 2002 2003 so farConvictions: 20 40+ Offences: Failing to Keep Proper Books

Falsification of DocumentsUndischarged BankruptsDirectors’ LoansUnqualified Auditor

Prosecuting Detected Breaches (2)

Civil Enforcement 2002 2003 so farCompliance Order - 7Disqualifications - 1Property Seizure - 1Seeking Information 2 -Judicial Review 1 1

Prosecuting Detected Breaches (3)

Investigations 2002 2003 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 2001

• 1 June 2003: insolvent companies to which a liquidator was appointed on or after 1 January 2000

Sanctioning Improper Conduct in Insolvent Companies (2)

Volumes 2002 2003 so farLiquidator Reports 579 411 Cases Determined 4 477Full Relief 4 247 (52%)Partial Relief - 21 (4.4%)Relief at this time - 28 (5.8%)No Relief - 175 (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 www.odce.ie

• 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