Pádraig Mac Lochlainn (Donegal North East, Sinn Fein) | Oireachtas source

I thank the sitting committee members for allowing some of us to attend the meeting today and to put questions on behalf of our constituents. Mr. Humphreys was very upfront and honest in his assessment when he spoke about the precarious business element of these schools. It was alarming to hear that existing legislation technically allows for a type of Ponzi scheme to develop. Deputy O'Donovan's proposal has been seconded. I hope the committee will conduct a forensic examination of all these events and make recommendations to the Minister. There needs to be legislative change. I also endorse Deputy McHugh's call for the Director of Corporate Enforcement to investigate this matter. This is essential.

I have a number of questions. In 1992, the European College of Aeronautics based in Cork also closed down, with a similar impact on families. I refer to the Official Report at that time which records a response on the matter from the then Minister, Máire Geoghegan-Quinn, now a European Commissioner. This was 22 years ago. We know that the business element is precarious. We also know that State bodies such as Aer Rianta and IDA Ireland were shareholders in the European College of Aeronautics in 1992. The taxpayer was an investor in that college and it was a precarious business. Those were the lessons from the situation in 1992. The Irish Aviation Authority Act established the Irish Aviation Authority in 1993. Twenty years later it has all happened again, and nobody, including the Minister, is taking responsibility. The families have used their life savings to pay for these qualifications for their sons and daughters.

The authority's responsibilities include an examination of the management structure and the continuing evidence of sufficient funding. It must also have regard to safety regulations. It must give a clean bill of health to a company's finances. I refer to the authority's report in which it states there were no indications of any deficiencies with regard to resources and provision of approved training courses for the number of students registered with PTC and that all training was to be of a required standard. It further stated in the report that financial evaluation is not intended to be a consumer protection provision. However, families would be confident to invest in a company if it had been given a financial clean bill of health by a Government agency, albeit not funded by the taxpayer. Enterprise Ireland invested €400,000, along with a grant of €8,000. I think this would make families confident that the company was a safe place for their investment. They would regard it as a pretty good bet because the company had a clean bill of health from the IAA and Enterprise Ireland had invested a fortune in taxpayers' money.

The accounts of the company were not qualified by Cooney Carey. There are a number of statements by the accountants which must have caused alarm bells to ring. It was stated that the negative capital and reserves of the company were almost €2.2 million - €2,171,533 - as of 31 December 2010. That last sentence is my own qualification. The report states:

These conditions indicate the existence of a material uncertainty which may cast significant doubt over the company's ability to continue as a going concern. ... The financial statements do not include any adjustments that would result if the company was unable to continue as a going concern.

That is pretty worrying for any lay person. It is clear from the accountants' report that this company was quite financially precarious. Yet the company was given a clean bill of health and Enterprise Ireland invested in it. The families continued to pay the fees in good faith.