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Institute of Directors in Ireland

Institute of Directors in Ireland. Conference on Corporate Governance 29 November 2001. Role and Functions of the Director of Corporate Enforcement. Paul Appleby, Director. Outline of Talk. Introduction – how did we get here? DCE’s Role – what will I be doing?

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Institute of Directors in Ireland

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  1. Institute of Directors in Ireland Conference on Corporate Governance 29 November 2001

  2. Role and Functions of the Director of Corporate Enforcement Paul Appleby, Director

  3. Outline of Talk • Introduction – how did we get here? • DCE’s Role – what will I be doing? • Timetable – what functions start and when? • Concluding Comment – what lies ahead?

  4. The Key Drivers of Change • Public discontent with poor business standards, e.g., McCracken Tribunal Report (1997) • Working Group Report on Company Law Compliance and Enforcement (1998) • DIRT Inquiry Report (1999) • Company Law Enforcement Bill (2000) • Enactment of the Bill (2001)

  5. Company Law Enforcement Act • Enforcement of filing obligations stays with the Registrar of Companies • New Director of Corporate Enforcement will deal with Companies Acts in general • Measures to streamline enforcement • Need for modern company law regime recognised in establishment of Company Law Review Group

  6. ODCE Role and Powers (1) Compliance Role • Public presentations • Information strategies • Printed media • Electronic media • Engaging with professional bodies • Other Initiatives

  7. ODCE Role and Powers (2) Fact-finding company investigations • Apply to have High Court Inspector appointed to conduct wide-ranging company inquiry • Establish directly a person’s interest in company shares and debentures • Examine privately a company’s books and documents

  8. ODCE Role and Powers (3) Detected Breaches of the Acts • Seek to impose an administrative fine • Initiate a summary prosecution • Refer the case to the DPP for decision

  9. ODCE Role and Powers (4) Insolvent Companies • Seek Court order to inspect the books • Seek to have Court examine directors, etc. • Seek Court order to search for and acquire property, etc. • Seek arrest warrant • Seek Court assessment of damages • Seek Asset-Freezing Order

  10. ODCE Role and Powers (5) Disqualification of Company Officers ODCE can directly seek Court order of disqualification if: • Persons guilty of three or more defaults in relation to Companies Acts requirements • Persons guilty of two or more offences of failing to keep proper books • Directors of insolvent company fail on request to file all annual returns due and company is then struck-off

  11. ODCE Role and Powers (6) Restriction of Company Officers • Liquidators of insolvent companies must apply to Court to restrict directors, unless exempted by ODCE • ODCE can directly seek Court declaration of restriction • Companies with a restricted director must have paid up sharecapitalof € 63.5K or € 317.4K

  12. ODCE Role and Powers (7) Supervision of Liquidators and Receivers • Will obtain copy of notice of appointment of liquidator/receiver from the Registrar • May require production of his/her books • May seek explanations of conduct • Receiver will require to state if company is solvent at the close of the receivership

  13. ODCE Role and Powers (8) Other Measures • Mandatory reporting of suspected breaches of company law by auditors, liquidators, professional bodies • Regulation of undischarged bankrupts acting as company directors • Seek other Court orders/injunctions to remedy defaults • Increase in penalty provisions

  14. Commencement Timetable (1) 1 October, 2001 or earlier: • Part 1 of the Act (Preliminary and General) • Part 7 (Company Law Review Group) • Part 9 (Transactions involving Directors) • 24 sections, most in Part 10 (Miscellaneous)

  15. Commencement Timetable (2) 28 November 2001: • Part 2 (Director of Corporate Enforcement) • Part 3 (Investigations) – most sections • Part 8 (Auditors) • Part 10 (Miscellaneous) – c. four sections

  16. Commencement Timetable (3) Early 2002 • Part 4 (Restrictions and Disqualifications) – most sections • Part 5 (Winding up and Insolvency) – most sections • Most of the remaining sections, including those relevant to the Registrar of Companies

  17. Concluding Comment (1) Resources • Annual budget of € 3.68 million • 20 administrative staff • 10 staff with legal, accounting, etc. qualifications • 7 Gardai

  18. Concluding Comment (2) Immediate Plans • Prepare Company Law Compliance Statements • Expand the ODCE Website • Roll out the new Enforcement Act Powers • Develop the ODCE Role • Enforce suspected Companies Acts breaches

  19. Concluding Comment (3) Issue being addressed by Government • Reducing red tape .v. regulation Balances to be struck by the ODCE • Information .v. advice • Public .v. private interest • Independence .v. accessibility • Publicity .v. confidentiality • Compliance .v. enforcement

  20. Institute of Directors in Ireland Conference on Corporate Governance 29 November 2001

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