Ms Nessa Cahill:

Perhaps I will take the first question and let Mr. Duffy deal with the second. The first question, I believe, was about section 608 of the Companies Act, which is the provision that provides for assets to be recovered in the event that they were transferred before the liquidation with a fraudulent effect. We deal with this in our report and note that it seems on its face to be a potentially very useful provision for dealing with the kind of situation our report addressed.

The threshold for fraudulent effect has been considered in a couple of judgments. No very recent ones have drawn it out more clearly than the one addressed in our report, I believe. In effect, what the jurisprudence seems to talk about is that the asset was transferred and that it had the effect of depriving the members of something to which they were entitled. That seems like quite a general and not very exacting standard and that was applied in some earlier judgments. There was a more recent judgment of the High Court that we addressed in the report where they talked about there being some requirement of an impropriety being shown, which is a somewhat vague term.

To answer the Deputy's question on what is insured, it is not entirely clear. Some cases suggest that it is purely if the effect of the transfer is to deprive the company of something it is entitled to and that may be sufficient to show a fraudulent effect.

Others suggest that something more is required, some form of impropriety. The term "fraud" when it is used and applied by the courts generally comes with a fairly high threshold of proof. Fraud is not something lightly alleged in the courts. That may be part of the reason for the reluctance with this provision. That is where the interpretation of it rests at the moment.