Mr. Ian Drennan:

I thank the Chairman and members for the invitation to appear before the committee and for the opportunity to discuss the general scheme of the companies (corporate enforcement authority) Bill 2018.

As referenced in the submission furnished to the committee on 4 December 2020, given the centrality of the Office of the Director of Corporate Enforcement, ODCE, to the general scheme, it is submitted that any assessment of the proposed legislation requires an understanding of the ODCE, that is, what it does, how it does it, the environment within which it operates, the resources at its disposal and the challenges that it faces. My principal functions as director are set out in section 949 of the Companies Act 2014. They include: to encourage compliance with the Act; to investigate instances of suspected offences under the Act; to enforce the Act, including by way of prosecution of offences summarily, by referring cases to the Director of Public Prosecutions, DPP, where there are reasonable grounds for believing that an indictable offence has been committed; and to exercise a supervisory role over the activities of liquidators and receivers in the discharge of their functions under the Act. In the context of the foregoing, it is important to note that the ODCE is independent in the discharge of the statutory functions conferred upon it by the Oireachtas.

Flowing from the aforementioned functions the ODCE has, in broad terms, two remits, namely, advocacy and enforcement. Across those two broad categorisations, the ODCE engages in, among others, the following activities: encouraging compliance with company law through the provision of information and guidance to stakeholders; examining complaints and other expressions of concern be they from members of the public, disclosures under the Protected Disclosures Act 2014, statutory reports, whether from auditors, liquidators or professional bodies, referrals from other law enforcement agencies and internally generated issues; conducting investigations into indications of breaches of company law; resolving lower level breaches of non-compliance in a cost and resource effective manner through a range of non-judicial interventions; examining and adjudicating upon liquidators’ reports in respect of insolvent companies; operating a statutory disqualifications and undertakings regime in respect of directors of insolvent companies; taking disqualification proceedings against directors of unliquidated insolvent companies; prosecuting cases summarily in my name and referring files to the DPP for consideration as to whether charges should be directed on indictment; and engaging in a full range of litigation associated with the foregoing categories of activities as necessary or as otherwise appropriate.

Over the last three years the aforementioned activities have given rise to, among others, the following: the publication of a suite of information and guidance documents aimed at assisting those involved in companies, for example, shareholders and members, directors and creditors, to understand their duties, obligations and rights, respectively; in excess of 100 production orders and requirements being issued to companies and individuals; 18 search warrants being executed by ODCE officers; voluntary cautioned interviews being conducted with 25 individuals; 18 individuals being arrested; on the application of the ODCE, the appointment by the President of the High Court of inspectors to Independent News and Media; 290 directors of insolvent companies being restricted; 88 directors of insolvent companies being disqualified; almost 100 statutory directions being issued requiring liquidators to comply with their statutory obligations; in more than 40 cases in which suspected directors’ loan infringements had been reported by auditors, or had otherwise come to attention of the ODCE, rectifications totalling in the order of €37.6 million; directions to charge summarily or otherwise in respect of five separate investigations; directions being received from the DPP to charge on indictment, or otherwise, in respect of seven separate investigations involving a total of 77 separate criminal charges being preferred as against eight individuals relating to breaches of company law, for example, fraudulent trading and provision of false information and to breaches of criminal justice more broadly, for example, theft, deception and money laundering; facts proved in the District Court as against two individuals relating to breaches of company law; and convictions being secured in the Circuit Court as against four individuals for breaches of the aforementioned categories of offences. As of today High Court inspectors continue to investigate the affairs of Independent News and Media; a number of criminal trials are before the courts; and a number of investigations are ongoing in respect of possible civil breaches of company law and-or criminal offences.

Part 2 of the general scheme is of most relevance to the ODCE, in that it provides for the establishment of the corporate enforcement authority, CEA, and for the transfer of the ODCE’s statutory functions to the CEA. As stated in the submission, the ODCE’s assessment is that the general scheme, as drafted, meets its statuary objectives in that regard.

The ODCE further welcomes the provisions of heads 38, 41, 43, 45 and 46, respectively.

The general scheme has been in gestation for some time, as was alluded to by the Chairman in his opening remarks, and as such it is understandably a priority for Government that it be enacted as soon as practicable. The ODCE fully supports timely enactment but would recommend that immediately following enactment, consideration be given to a number of important emerging issues in order that, where practicable, the CEA's effectiveness might be further enhanced.

Specifically, and as outlined in the submission, early consideration should, it is recommended, be given within company law and elsewhere, as applicable, to legislation to address: certain evolving legal issues in respect of which greater legislative clarity is desirable for investigators; technological advances in the law applying to search and seizure; complexities associated with white-collar investigations; and existing legal processes where scope for further streamlining exists.

The legislative amendments proposed by the ODCE would, in addition to further enhancing the CEA's effectiveness, also serve, to the extent practicable, to future-proof the CEA. I trust that these opening remarks I have read, in conjunction with the submission, are of assistance to the joint committee. My colleagues and I look forward to discussing the general scheme further with members over the course of the meeting.