Ms Sabha Greene:

I thank the Chairman and committee for the opportunity to present today. As members will have seen from the general scheme, the Bill covers a number of areas which is why there are three company law sections in the Department represented here today.

The general scheme of the Companies (Corporate Enforcement Authority) Bill gives effect to two of the 14 measures published in November 2017 in the document entitled, Measures to Enhance Ireland’s Corporate, Economic and Regulatory Framework - Ireland combatting “white collar crime”’. The two measures contained in this Bill are to establish the Office of the Director of Corporate Enforcement, ODCE, as an agency that is better equipped to investigate increasingly complex breaches of company law and to implement recommendations of the Company Law Review Group, CLRG, on corporate governance. The general scheme also incorporates some additional provisions. It implements recommendations of the CLRG on shares and share capital and introduces some new transparency measures with respect to companies, the conduct of liquidations and the Register of Companies.

The establishment of the ODCE as an agency is dealt with in part 2 of the general scheme. As mentioned already, the Government decided in late 2017 to establish the ODCE as an agency with a commission-type structure and distinct from the Department. Accordingly, the general scheme provides for establishment of the ODCE as an agency, to be named the corporate enforcement authority. The commission structure is modelled on the Competition and Consumer Protection Commission, CCPC and, therefore, many of the provisions are inspired by provisions in the legislation that established the CCPC. In some cases, the recent legislation establishing the Data Protection Commission has also served as a precedent.

The new authority will have between one and three commissioners, one to be chairperson, and each will be appointed by the Minister following a recruitment process conducted by the Public Appointments Service, PAS. This structure and flexibility is intended to allow the authority to adapt if its workload expands significantly or if it needs to organise its work into discrete areas or functions. Another feature of the scheme with respect to the authority’s autonomy is that it provides that the authority will be able to determine itself the skills, levels and numbers of staff it will need to conduct its work, subject to overall budgetary sanction and approval.

All of the current functions of the ODCE will be carried over to the new authority. These include encouraging compliance with the Companies Act 2014, investigations of suspected offences and non-compliance with the Act, prosecution of summary offences, referring indictable offences to the Director of Public Prosecutions, DPP, and the exercise of certain supervisory functions with respect to liquidators and receivers. The scheme also includes savers for any work under way at the time of the transfer from the ODCE to the authority.

The Government also decided in 2017 to better equip the new authority to investigate increasingly complex breaches of company law. While the current range of powers of the ODCE will be carried over to the new authority, some new investigative tools have been identified and added. The first of these is a development of the current power of search and entry at head 46. The intention here is to meet the changes arising from technological advances and to allow the authority to get a search warrant that enables it to search for electronic records that a company may hold on a server that is remote from the company or to be able to use its own equipment, where the equipment of the company is a little slow or old. This is new ground and, if feasible, this power will be of interest to other investigative bodies such as An Garda Síochána. For this reason, and to ensure that it is workable, robust and includes appropriate safeguards, the Department will be developing this provision in consultation with the Offices of the Attorney General and the Parliamentary Counsel as well as the Department of Justice and Equality.

Another new tool is the provision in head 45 on the admissibility of written statements. This is a statutory exemption from the hearsay rule, allowing the courts to consider written statements as evidence in certain circumstances. This is modelled on a provision in the Competition and Consumer Protection Act.

Alongside these provisions in the general scheme, the Department is working with the Department of Justice and Equality with a view to giving the new authority a power under the forthcoming communications (retention of data) Bill to apply directly to the courts to retain specified telecommunication records for an investigation.

The general scheme also introduces new measures with respect to liquidations that are designed to enhance the authority’s powers. Part 5 introduces a new ground for the authority, or others, to apply to the courts for an order restricting a person’s ability to act as a company director. In particular, it enables the authority to apply for a restriction order where a director of a company has failed to meet certain requirements in the course of that company becoming insolvent. This is intended to address the situation where a director does not conduct an orderly winding up of a company. A consequence of this can be that creditors, including employees, cannot get paid from the company’s remaining resources or, in some cases, cannot access the State’s insolvency fund. This is based on a recommendation of the Company Law Review Group on the protection of employees and unsecured creditors. The general scheme also provides a power for the authority to request that a person acting as a liquidator provide evidence to the authority that he or she is qualified to act as a liquidator in accordance with the requirements of the Companies Act 2014.

The general scheme gives effect to recommendations included in two reports of the Company Law Review Group, namely, its reports on corporate governance and on shares and share capital, both published in 2014. These provisions are encompassed in Parts 3 and 4 of the general scheme and most may be categorised as technical in that they address omissions, provide clarifications or rectify perceived anomalies. As a rule, they arise from the large consolidation and modernisation project that took place between 2012 and 2014 and resulted in the Companies Act 2014.

Part 3 is concerned with shares and share capital. These heads are intended to rectify some perceived anomalies regarding share capital following the reform of company law in 2014. They reinstate provisions or clarifications from the now repealed Companies Acts 1963 to 2013 concerning the use of a company’s share premium account, the payment of commission to investors in a share issue of a public limited company, PLC, and the law concerning the share management of unlimited companies. In other cases, they are clarifications of the existing law.

Part 4 is intended to clarify certain corporate governance and other issues affecting the administration of company meetings. Their purpose is to address anomalies and unforeseen consequences and to reaffirm the overall policy approach to the legislation. As mentioned earlier, the provisions on restriction orders for directors are based on a third report of the Company Law Review Group.

The general scheme takes the opportunity to introduce some measures that are designed to improve corporate transparency. The first of these is head 42, which is concerned with the frequency at which liquidators must submit their reports to the Companies Registration Office. At present, only periods of six months or longer may be prescribed. However, a gap can arise where there is less than six months between an interim report and the final report which is supplied at the conclusion of a liquidation. Head 42 will facilitate the submission of interim reports more frequently, where necessary, to address such a gap.

Head 43 introduces a requirement for directors of Irish registered companies to provide their personal public service number, PPSN, to the Companies Registration Office. This information will not be publicly available but it will enable the Companies Registration Office to verify the accuracy of information supplied to it on foot of the statutory obligations in the Companies Act 2014. As well as supporting accuracy, this is intended to address the situation where one person uses different versions of his or her name on various company returns in order to appear as more than one person or to avoid the prohibition on holding more than 25 directorships at any one time.

Finally, head 47 proposes the deletion of an exemption from the rule that companies include the names of their directors on their company letterhead and correspondence. This exemption was introduced in 1963, when the change of director required a new print run of stationery every time in order to comply. In light of technological advances, this exemption from transparency requirements is no longer considered justified.

I am happy to take questions now.