Behaviour of liquidators to come under greater scrutiny by corporate watchdog
ODCE warns of possible prosecutions over breaches of statutory reporting obligations
Director of Corporate Enforcement Ian Drennan: His office issued 198 notices last year to 79 liquidators advising them that they were in default of their statutory reporting obligations. Photograph: Dara Mac Dónaill
The behaviour of liquidators is set to come under greater scrutiny from the Office of the Director of Corporate Enforcement as the number of company failures remains at a high level.
New ODCE director Ian Drennan said yesterday he would consider prosecutions in cases where liquidators failed to comply with their statutory reporting obligations.
Liquidators of companies that are in insolvent liquidation are obliged under the Company Law Enforcement Act 2001 to report to the office on the company’s demise. These so-called section 56 reports accounted for 1,787, or over 75 per cent, of the total external inputs received by the director’s office last year, according to the annual report for 2012.
The report noted that as a result of the severe economic downturn, company failures continued at a high level during 2012.
Insolvent liquidations (creditors’ and court liquidations combined) accounted for 59 per cent of all liquidations during the year. In addition, 2012 was the fourth consecutive year in which the number of insolvent liquidations exceeded 1,200. Solvent liquidations fell by 13 per cent during 2012, from 1054 to 919.
Mr Drennan said that of particular note was the fact that a number of liquidator reports related to “large-scale entities”, the commercial affairs of which were “particularly complex”.
His office issued 198 notices last year to 79 liquidators advising them that they were in default of their statutory reporting obligations.
A small number had “ repeatedly failed to comply”.
“Such cases are a particular area of focus for the office and appropriate enforcement action up to, and including, criminal prosecution may result from such persistent breaches of statutory obligations.
“In that context, it should be noted that liquidators’ behaviour generally has been identified as an area deserving of greater focus in 2013 and beyond,” the report stated.
Work related to the Anglo Irish Bank investigation is likely to be a “significant and continuing” feature of the work of the office “for some time to come”, Mr Drennan said.
The investigation was “substantively complete” but he would not comment further on the details.