Robert Troy (Longford-Westmeath, Fianna Fail)
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I know from the Deputy's contribution to the Second Stage debate in the Dáil that she is concerned that 944AE(3) will limit the publication and so the transparency of sanctions imposed on directors in certain circumstances. This is important and I agree that such limitations should be minimal.

There are a number of reasons for their inclusion in this Bill. First, from a technical perspective arising from the repeal of chapter 3 of Part 15, section 10 of this Bill will insert a new chapter 3A and chapter 3B into Part 15 of the Companies Act 2014. Chapter 3B, sections 944Z, and 944AA to AH, re-enact sections 957AA, 957B to 957I, when section 3 repeals all of chapter 3 of the Companies Act 2014. The sections and paragraphs proposed for deletion are not new law. They arise as a consequence of the repeal of chapter 3 and they are just being renumbered to the sections in the Companies Act 2014. It is nothing new but a renumbering and a technical requirement in terms of this legislation.

Second, this is law as a consequence of Ireland’s obligations as an EU member state to take account of EU law from 2014 on statutory audit, first in 2016 by way of a statutory instrument and, subsequently, in the Companies (Statutory Audits) Act 2018.

The sections themselves transpose the requirements of the EU Audit Directive of 2014 to introduce administrative sanctions, including financial sanctions on directors of public-interest entities who are found, following investigation, to have contributed to a breach of statutory audit rules by a statutory auditor. Public-interest entities are banks, insurance undertakings and listed entities. The sanctions include directions to directors to cease conduct or prohibit them from carrying out certain functions as well as financial sanctions.

The audit directive sets out in detail the rules and requirements for the imposition of sanctions on directors in keeping with the principle of proportionality inherent in EU law. As a rule, details of sanctions on directors should be published as soon as practicable. However, the audit directive, which we have transposed word for word, requires that member states shall ensure that sanctions on directors are published anonymously, in certain circumstances. The circumstances are limited to where the authority is of the opinion that it would be disproportionate or would cause disproportionate damage to the director or would jeopardise the stability of financial markets or an ongoing criminal investigation. I wish to point out that it would be the director of the new corporate enforcement authority to determine that, and not the person in question, to seek anonymity. These circumstances, that were originally in section 957F(3), are re-enacted in sections 944AE(3) in the Bill, which the Deputy’s amendment would delete. Failure to re-enact these provisions would mean that Ireland would be in breach of its EU obligations. It is for this reason that I oppose the amendment and I hope that I have clarified the purpose of the sections.