Almost 500 company directors have faced sanctions over the last five years either through liquidators’ court applications or measures imposed by the Corporate Enforcement Authority (CEA) through undertakings, the Dáil Committee of Public Accounts (PAC) will hear.
In an opening statement at a hearing on Thursday, corporate watchdog chairman Ian Drennan is expected to say that one individual had been disqualified in recent weeks for five years on foot of behaviour judged by the agency to present a significant risk to the public.
It is understood he will maintain that a further two company directors had been sent forward for trial on indictment in respect of alleged accounting-related offences.
It is expected that Mr Drennan will also maintain that the authority had lodged an application with the High Court seeking the disqualification of a liquidator, based on concerns regarding that individual’s behaviour.
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He is expected to tell the committee that in return for the privilege of limited liability, company law requires certain minimum standards of conduct and probity from companies and their officers.
“Where those standards of behaviour are not met, restriction and disqualification are important public protection measures.”
Data provided by the authority to the committee will show that 362 company directors were “restricted” and an additional 120 disqualified.
It is understood Mr Drennan will maintain that the system of undertakings, which was introduced as part of Companies Act 2014 and which is administered by the regulator, had “resulted in substantial savings in terms of High Court time, liquidators’ litigation costs (thereby benefiting creditors) and directors’ litigation costs”.
It is expected that Mr Drennan will say that, in 2024, “certain interpretations and propositions” regarding the authority’s criminal enforcement mandate had been put forward but these had been found to be incorrect.
[ Landlord Marc Godart disqualified as a company director for five yearsOpens in new window ]
“Having considered those matters carefully, and with the benefit of a joint opinion from two senior counsel – both of whom specialise in criminal law – the CEA satisfied itself some time ago, inter alia, that the proposition that, in criminal matters, the role of those charged with the CEA’s governance is confined to setting the organisation’s strategic priorities is incorrect.
“Indeed, were that proposition to be correct, it would give rise to a situation in which the chairperson of the authority would be accountable to the Minister, the Oireachtas, to this committee, and to the courts for investigative activity – conducted by CEA officers, conducted in the CEA’s name, using CEA resources, and generating risks for the CEA – over which s/he has no lawful authority or control.
“For a variety of reasons, including those relating to legislative intent, public policy, governance, financial control, risk management and accountability, that would be deeply problematic.”
