the role & powers of the office of the director of corporate enforcement presentation to the...
TRANSCRIPT
![Page 1: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/1.jpg)
The Role & Powers of the Office of the Director of Corporate Enforcement
Presentation to the Dublin City University MBA Association
Corporate Governance Seminar23rd February 2002
Ian DrennanCorporate Compliance Manager, ODCE
![Page 2: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/2.jpg)
Presentation Overview
• Background to the establishment of the ODCE
• Role & Powers of the ODCE
• Steps Company Directors Can Take To Improve Compliance
![Page 3: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/3.jpg)
Background to the Establishment of the ODCE
• Increased public concern arising from a number of alleged instances of corporate malpractice e.g. McCracken (Ansbacher (Cayman) Ltd. etc.), Moriarty, Flood, NIB etc.
• Working Group on Company Law Compliance & Enforcement (1998)
• DIRT Investigation (1999) and resultant reports
![Page 4: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/4.jpg)
Working Group on Company Law Compliance & Enforcement • Established by Government and Chaired by Mr. Michael McDowell
SC AG
• Government’s decision to establish the Group was influenced by the emergence of strong indications of abuses of company law and the need to allay public concerns
• Membership comprised representatives from Government Departments & Agencies, the business community and the legal and accountancy professions
![Page 5: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/5.jpg)
Report of the Working Group• The Working Group, which reported in November 1998,
found, inter alia, that:
• Irish company law has been characterised by a culture of non-compliance
• enforcement of the law in relation to non-registration offences has been very rare and wholly unpredictable
• those tempted to commit serious breaches have had little reason to fear detection
![Page 6: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/6.jpg)
How Change Has Been Effected
• Two Companies Acts enacted in 1999 (dealing with, inter alia, examinerships and audit exemptions)
• Review Group on Auditing, Chaired by Senator Joe O’Toole, established post DIRT (reported in 2000)
• Enactment of the Company Law Enforcement Act, 2001
![Page 7: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/7.jpg)
Company Law Enforcement Act, 2001
Enforcement of filing obligations remains with the Registrar of Companies
Company Law Review Group established, on a statutory basis, in recognition of the need for a modern company law regime
Office of Director of Corporate Enforcement established to deal with Companies Acts in general
Other measures introduced to streamline enforcement
![Page 8: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/8.jpg)
Office of the Director of Corporate Enforcement
• Director: Mr. Paul Appleby
• Staff of approximately 40 comprising legal and accounting professionals, members of An Garda Síochana and administrative staff
• Budget of approximately €3.7m per annum
![Page 9: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/9.jpg)
Role and Powers of the ODCE
• Under the provisions of the Corporate Enforcement Act, 2001, the role of the ODCE is twofold i.e.
• a Compliance role, and;
• an Enforcement role
![Page 10: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/10.jpg)
Compliance Role
• The ODCE will encourage compliance with the Companies Acts through:
• The delivery of public presentations
• Pursuing information strategies through the electronic and printed media e.g. Consultation Papers (2 issued to date)
• Decision Notices
• Engaging with relevant professional and represenative bodies
• Other initiatives as appropriate
![Page 11: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/11.jpg)
Enforcement Role• Company investigations
• Breaches of the Companies Acts
• Restriction
• Disqualification
• Unliquidated insolvent companies and companies in liquidation
• Supervision of liquidators and receivers
• Other measures
![Page 12: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/12.jpg)
Company InvestigationsThe Director may:
conduct a preliminary examination of a company’s books and records for the purposes of establishing whether breaches have taken place
appoint an Inspector directly to establish the beneficial ownership and control of a company’s shares/debentures
apply to the High Court for the appointment of an Inspector to conduct a wide-ranging inquiry
![Page 13: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/13.jpg)
Breaches of the Acts• Where breaches of the Companies Acts are detected, the
Director can:
Impose a fine in respect of summary offences. (Where the fine is paid and the default remedied within 21 days of notification, no prosecution will ensue)
Initiate a summary prosecution
Refer the case to the DPP for decision
![Page 14: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/14.jpg)
Restriction
• The Company Law Enforcement Act, 2001 requires the liquidators of insolvent companies to apply to the Court for the restriction of directors, unless exempted from doing so by the Director
• The Director may also apply to the Court for restriction orders e.g. against directors of unliquidated insolvent companies
![Page 15: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/15.jpg)
Disqualification• The Director can seek a disqualification order from the
Court where:
a person is guilty of three or more defaults in relation to Companies Acts requirements
where a person is guilty of two or more offences of failing to keep proper books (new)
a director of an insolvent company fails to file all annual returns due and the company is subsequently struck off
![Page 16: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/16.jpg)
Unliquidated Insolvent Companies and Companies in Liquidation
In such cases, the Director can seek:
a Court order to inspect books to have Court examine directors, officers etc a Court order to search for and acquire property, etc. an arrest warrant a Court assessment of damages an Asset-Freezing Order
![Page 17: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/17.jpg)
Other Measures• Corporate Enforcement Act, 2001 introduced the mandatory
reporting of suspected breaches of company law by auditors, liquidators and professional bodies
• Penalty provisions have been increased (maximum fines have been increased to €1,900 (£1,500) and prison terms to 5 years)
• Director is responsible for the regulation of undischarged bankrupts acting as company directors
• The Director may also seek other Court orders/injunctions
![Page 18: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/18.jpg)
Steps Directors Can Take
• Ensure that general filing obligations are satisfied e.g.
• Annual return
• Change in directors/secretary
• Change of registered office
• Increase in nominal/issued share capital
• Registration of mortgages/charges
![Page 19: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/19.jpg)
Steps Directors Can Take• Ensure that the following are maintained, kept up to date
and are readily available for inspection:
• Minutes
• Register of directors and secretary
• Register of directors’/secretary’s interests
• Directors’ service contracts
• Register of members
• Register of debenture holders
![Page 20: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/20.jpg)
Steps Directors Can Take
• Hold regular Board meetings
• Maintain proper books and records
• Regularly prepare and review management accounts
• Ensure that delegatees are properly supervised
• Seek professional advice where necessary
• Hold an AGM when required
• Circulate members with signed financial statements and audit report in advance of AGM
• Hold EGMs where the circumstances require
![Page 21: The Role & Powers of the Office of the Director of Corporate Enforcement Presentation to the Dublin City University MBA Association Corporate Governance](https://reader030.vdocuments.mx/reader030/viewer/2022032703/56649d035503460f949d6b21/html5/thumbnails/21.jpg)
Conclusion
Immediate priorities of the ODCE are to:
prepare Company Law Compliance Statements (ongoing) expand the ODCE Website (http://www.odce.ie) further develop the ODCE Role enforce suspected Companies Acts breaches
End