“Defending the Corporate Realm in Times of Crisis”

1. “Defending the Corporate Realm in Times of Crisis” RMI Group Conference Citywest 7 November 2002

2. Role of the Director of Corporate Enforcement Paul Appleby Director of Corporate Enforcement

3. Outline of Presentation • Role and Responsibilities • Company Law Enforcement • Current Challenges • Future Developments

4. Role and Responsibilities (1) Encouraging Improved Compliance (with the Companies Acts) • Publishing Accessible Information • Promoting Compliance • Improving Company Law

5. Role and Responsibilities (2) Uncovering Suspected Breaches • Developing Detection/Reporting Channels • Mandatory Reporting • Voluntary Reporting • Identifying Prima Facie Breaches • Undertaking Company Investigations

6. Role and Responsibilities (3) Prosecuting Detected Breaches • Developing a Balanced Enforcement Policy • Upholding Disclosure Requirements • Sanctioning Parties Disregarding Company or Other Interests • Acting against Parties denying Accountability

7. Role and Responsibilities (4) Sanctioning Improper Conduct with respect to Insolvent Companies • Supervising Liquidators • Assessing Directors’ Conduct • Sanctioning Fraudulent/Abusive Behaviour

8. Role and Responsibilities (5) Providing Quality Services to Customers • Securing and Managing Resources • Developing Staff • Maintaining Quality Customer Services

9. Company Law Enforcement (1) Company Investigations • Conduct wide-ranging company inquiry • Establish interest in company shares, etc. • Examine a company’s books/documents • Require production of the books • Demand explanations

10. Company Law Enforcement (2) Criminal Investigations • Inspection of Company Registers, etc. • Search and Seizure Powers for Documents • Accessing Bank Documentation • Powers of Arrest

11. Company Law Enforcement (3) Prosecution • Seek to impose an administrative fine • Initiate a summary prosecution • Refer the case to the DPP for decision

12. Company Law Enforcement (4) Insolvent Companies • Seek to have Court examine directors, etc. • Seek Court order to search for and acquire property, etc. • Seek Court assessment of damages • Seek Asset-Freezing Order

13. Company Law Enforcement (5) Restriction of Company Officers • Liquidators of insolvent companies must seek to restrict directors, unless exempted by ODCE • ODCE can directly apply for Court declaration of restriction • Nominal value limits increased to €63K and €317K in private and public companies

14. Company Law Enforcement (6) Disqualification of Company Officers • ODCE can directly seek Court order of disqualification • Specific criterion is a person guilty of two or more offences of failing to keep proper books • Another criterion is a person in persistent default of the relevant requirements

15. Company Law Enforcement (7) Liquidations and Receiverships • Will obtain copy of notice of appointment of liquidator/receiver from the Registrar • May require production of his/her books • May seek explanations of conduct • Receiver will require to state if company is solvent at the close of the receivership

16. Company Law Enforcement (8) Other Measures • Regulation of undischarged bankrupts acting as company directors • Seek other Court orders/injunctions • Increase in penalty provisions

17. Current Challenges (1) Changing the Culture of Non-Compliance • ‘Carrot’ and ‘Stick’ approach • Guidance material • Enforcement measures • No overnight successes likely

18. Current Challenges (2) Tackling the Caseload of Malpractice • 470 issues received by ODCE to end Q3 • 260 cases concluded by ODCE to end Q3 • 210 cases on hands in ODCE at end Q3 • 400 more cases expected by year-end

19. Current Challenges (3) Preparing for Insolvent Liquidation Reports • New Area of Work • Decisions by end-Feb. on 300 Reports • Monitoring Progress of Court Action

20. Current Challenges (4) Defining the ODCE Role vis-à-vis Others • ODCE Role versus Other State Authorities • ODCE Role versus Private Interests

21. Current Challenges (5) Using the Company Law Enforcement Act • Many New Powers • Some difficulties to be expected • Exercise of powers will be tested

22. Current Challenges (6) Achieving Our Potential • Integrating Staff • Bedding down the new powers • Establishing External Relationships • Resourcing the Office

23. Current Challenges (7) Maintaining the Right Focus • Achievable Results • Priority Areas of Work • Resolve Matters extra-legally if possible

24. Companies Company Directors Members/Shareholders Creditors Auditors Company Secretaries Examiners Liquidators Receivers Future Developments (1)Company LawCompliance Guidance

25. Future Developments (2) Irish Auditing and Accounting Supervisory Authority (IAASA) • Will supervise compliance with accounting and auditing standards • To be established in 2003

26. Future Developments (3) International Legislation • EU Plans – Market Abuse, Prospectuses, Regular Reporting, etc. • US Sarbanes Oxley Act

27. Future Developments (4) Company Law Review Group • One Irish Companies Act by 2005 • Simplified Legislation for Private Companies

28. Future Developments (5) Corporate Governance and Competitiveness • Enhancing investment prospects • Improving the enterprise environment • Promoting fair competition • Reforming the legislative framework • Safeguarding the State’s revenue base • Supporting social solidarity