Convictions for company law offences fall sharply

Convictions for company law offences fell markedly last year amid a crackdown on regulatory breaches by the newly established Office of the Director of Corporate Enforcement (ODCE).

In 2002, 430 companies and 30 directors were convicted for company law offences which, on indictment, carry a maximum penalty of five years in prison or a €12,700 fine. This represented a significant fall on 2001 , when 755 companies and 128 directors received convictions. The information is contained in the Companies Report, issued yesterday by the Department of Enterprise, Trade and Employment.

Last year saw the introduction of new requirements under the Company Law Enforcement Act, including obligations on auditors to report to the ODCE suspected indictable offences by companies and other parties, and an obligation on liquidators to report on the conduct of company directors.

In addition, companies faced new penalties for late filing of returns, with businesses given specific annual deadlines.

The report provided a snapshot of a hugely significant year for corporate enforcement, said Mr Michael Ahern, Minister of State at the Department of Enterprise, Trade and Employment.

Drafting of new legislation to implement the recommendations of the Company Law Review Group is "progressing satisfactorily", he added.

Accountants' representatives said reporting obligations for accountants and auditors needed to be harmonised.

"Currently these operate under criminal, company and taxation law and are posing a considerable challenge to auditors and accountants," said Mr Brian Walsh, chief executive of the Institute of Chartered Accountants in Ireland.

The Government's decision to move towards a single consolidated Companies' Act with two separate parts is also welcome, said Mr Walsh. But accountants are still waiting to hear how the new international accounting standards (IAS) will apply in the Republic, he said.

"The EU has made the adoption of IAS mandatory for listed companies by 2005 but the Government needs to decide whether these standards will apply to other companies."

A recent business survey by Deloitte and Touche suggests Irish companies are unprepared for the adoption of IAS, said Mr Walsh.