Large firms involved in breaches of Companies Act, says Tanaiste

Major breaches of the Companies Act have been uncovered by a series of inquiries undertaken by the Department of Enterprise, Trade and Employment, the Tanaiste revealed.

Ms Harney said: "The key to what is being uncovered is the fact that some very leading principals in very large organisations have been involved in huge breaches of the Companies Act. They seem to have felt for many years that the Act did not apply to them. I think that is very serious for corporate governance in Ireland, very serious for our economy, and it is very damaging to enterprise.

"It is for all of those reasons we want to change the culture in addition to implementing the recommendations of the McDowell group. We have to be seen to take action. I think that is what the public want."

The Tanaiste said that she hoped to receive the final reports of the various inquiries - perhaps with the exception of Dunne Stores, which was the subject of legal proceedings - shortly. "It may well be that these matters will have to go further and an inspector under Section 8 of the Companies Act appointed."

She said that the inquiries had been under way, in many cases, since September 1997.

Ms Harney told the Fine Gael deputy leader, Ms Nora Owen, that the legal representative of Garuda (a company associated with Mr Michael Lowry) had said it could not agree to the publication of the report relating to it.

She had not finalised her view relating to Garuda, she added. Clearly, that report could be sent to the Revenue Commissioners, the DPP and other bodies. She hoped to have legal advice on the issue later this week.

Ms Harney was asked by Mr Pat Rabbitte (Lab, Dublin South West) if she would introduce an amendment to the Companies Act to allow her to refer the results of the inquiries to a tribunal of inquiry established by the Oireachtas.

Ms Harney said that any new legislation could not be applied retrospectively to information which she currently had. Much of the information which had come to light, in the Moriarty tribunal in particular, had also been brought to her attention. "So, it seems to me, that the institutions, the banks and others, from whom information is being sought, have also given it to tribunals of inquiry."

She said that when she received the final reports it was open to her to petition the High Court to have an inspector appointed. "Clearly, that would then become a public document. I do believe the issues are so serious that they should get into the public domain."

Ms Harney said she would be strongly recommending to the Government that it accept in principle a private member's Bill, published by Mr Rabbitte, permitting the Minister to disclose certain information, books and documents to a tribunal of inquiry. The Government would then amend it.

"The amendment proposed in Deputy Rabbitte's Bill could not, I believe, be made applicable to the inquiries that are under way at present. This is because the legislative basis on which they commenced would have changed and my investigations would, therefore, be open to successful legal challenge.

"I wish that the position would be otherwise, but I am constrained by the provisions of the Companies Act as it stands relating to the present inquiries."

Earlier, Ms Harney said she envisaged that the proposed Office of the Director of Corporate Enforcement would work very much liked the Criminal Assets Bureau. It was envisaged that seven members of the Garda would work on the director's team.

In all, it would cost about £2.5 million a year to run the office. She hoped to have the legislation setting it up before the House after the summer.

She added that the Companies Registration Office was writing to 500 companies a day, which was the first step in the striking-off procedure. Some 11,000 companies - "an enormous number" - had been struck off since last autumn.