Download Statement - Office of the Director of Corporate Enforcement

End-2004 Statement by the Director of Corporate Enforcement
For Release no earlier than 18.00 on Friday, 7 January 2005
“The ODCE has become a valuable resource in supporting responsible market
conduct” - Director
Mr Paul Appleby, the Director of Corporate Enforcement, today published his Interim
Review of ODCE Activity in 2004 (attached). Highlights have included:

the increase in successful enforcement activity. Some 67 convictions were
obtained for company law offences in 2004, a 56% increase on the 43
recorded for 2003. Two offences were successfully prosecuted by the ODCE
for the first time (fraudulent trading and acting as a director while restricted
and in breach of the statutory conditions);

the increase to 470 in the number of restricted directors (200 at end-2003) and
the new focus on investigating unliquidated insolvent companies. This has
seen the sanctions of disqualification and restriction imposed on irresponsible
directors by the High Court on the ODCE’s initiative;

the rectification of significant non-compliance in the area of directors’ loans.
Some €100 million of company assets has been repaid to companies by the
relevant directors and connected persons who appear to have been using much
of this company money for personal purposes;

the development of Revised Guidance on Directors’ Compliance Statements.
This involved extensive work in association with business, professional and
State interests and the general public;

some 100 presentations given to business, professional, voluntary and State
organisations in support of the Office’s advocacy work in compliance;

the continuing success of the ODCE’s website as an informative resource for
compliance and enforcement assistance. Visits increased 54% in 2004 to
almost 117,000, compared with about 76,000 and 42,000 in 2003 and 2002
respectively.
In an accompanying Statement to the 2004 Interim Review, Mr Appleby commented:
“It is clear from Court decisions in 2004 that company directors and others
are being regularly found to be in breach of their statutory obligations or to
be acting recklessly or irresponsibly in discharging their duties. Such
behaviour often directly costs the stakeholders of the affected companies in
monies owed to creditors, employees or even fellow directors. It also of
course has a damaging reputational impact on the business or the individuals
associated with such behaviour.
What has changed in recent years is that directors and others are now
increasingly being called to account for a failure to comply with the standards
of behaviour expected of them by the law and by society generally. Legal
obligations to creditors or employees or the public interest cannot be ignored
in order to minimise costs, because a regime of non-existent or lax
enforcement no longer exists.
Yet it is clear that we are still a long way from conditions of extensive
compliance with legal obligations and duties. Our role in the ODCE is to
assist genuine businesses to improve their compliance activity in the company
law area, and we will continue to deter non-compliance. In doing so, we are
supporting entrepreneurship and helping markets to work more effectively.
We want to support the creation of conditions of fairer competition and
reduced enterprise risk by ensuring that more people act and compete within
the law. Our work in 2004 indicates that the ODCE has become a valuable
resource in supporting responsible market conduct, and we plan to build on
that success further in 2005 and beyond.
In conclusion, I want to thank my staff for their assistance in our collective
endeavour in improving market behaviour in the company law area and
thereby reducing the risk of loss from unscrupulous corporate trading. I also
want to acknowledge the contribution which the Courts, business and
professional interests, including in particular auditors and liquidators, have
made during the year in supporting this important work. I look forward to
their continuing assistance in 2005.”
ENDS/
Editors’ Note
The following Interim Review of Activity provides information on the main
developments with respect to the work of the Office of the Director of Corporate
Enforcement (ODCE) in 2004. The Director will publish a detailed Annual Report in
May.
Information on the activities of the Office are updated from time to time on the ODCE
website at www.odce.ie/. For further information on this Interim Review, contact
Paul Appleby at (01) 8585820, Eamonn McHale at (01) 8585827 or Barry Harte at
(01) 8585843.
Office of the Director of Corporate Enforcement
7 January 2005