Chris Andrews (Dublin South East, Fianna Fail)

I welcome the opportunity to speak on the Bill. As the previous speaker said, how we are perceived is important. We need to ensure that Ireland is perceived as a safe place to do business. That was not the case. This Bill will help in many ways to repair the recent damage done to the reputation of the financial sector. Its main purpose is to ensure that directors' financial dealings will be fully represented on companies' balance sheets which has to be good.

It also provides welcome additional powers for the Director of Corporate Enforcement to access information held by companies or third parties that may be relevant to an investigation of corporate malpractice. In addition to these measures, it increases the penalties for company officers whose companies provide loans to directors in prohibited circumstances and gives greater search powers to the authorities in cases of suspected corporate malpractice.

The Bill follows the recent controversy in which directors of financial institutions received large loans, yet did not have to disclose them to shareholders in the company accounts. We were all shocked, disappointed and angry at the disclosures last December that the chairman of Anglo Irish Bank had, over eight years to 2007, temporarily transferred loans from Anglo Irish Bank to the Irish Nationwide Building Society prior to the group's year end. These loans amounted to over €87 million and the bank's shareholders were not aware of them. Total loans to directors at that institution were in the region of €179 million and while this may not have been illegal at the time it was, in the words of the former chairman, "inappropriate and unacceptable from a transparency point of view". That is putting it mildly because the damage that it has done and the anger it has created have undermined the economic and political foundations of the State. That cannot be allowed to go unchallenged. People must be dealt with in the most severe manner.

Investigations into some of these matters are going on and I have every confidence that the right course of action will follow from them. The public is angry about what went on in many of these institutions and that is as it should be. I do not wish to pre-empt any of these investigations but anyone who is found to have abused his or her position must be held accountable. In order to rebuild confidence in the economic and political foundations of the State, people must be held accountable. I cannot emphasise that point strongly enough.

Questions remain too about the behaviour of the former Financial Regulator who allowed these practices to happen. I cannot fathom why he did nothing to prevent them. It is hard to understand what was going through his mind at the time. To some extent we all live in bubbles, but he must have been living on a different planet. People who hold positions of authority, such as chairmen and chief executives, have a responsibility to behave openly and honestly to serve best the interests of the people they have been appointed to serve. Unfortunately, as the lessons of recent months have shown, people cannot always be trusted not to abuse the faith placed in them. There are people in every walk of life who betray the trust placed in them. We must put in place legislation and systems to ensure that people comply with regulations and standards.

While it is regrettable that those measures were not introduced previously, this Bill will ensure that the stakeholders will be protected from the practices that became known last year. It sends out the message loud and clear that Ireland is deeply committed to holding companies and their directors to account. It ensures that disclosure in company accounts of loans to directors of companies that are licensed banks will be treated in the same way as those in non-banking companies. All loans above the minimum threshold to each individual named director must be disclosed separately in the annual accounts as opposed to an aggregate format. The maximum sum outstanding during the year will be disclosed, not simply the sum outstanding at the end of the financial year. It will also be an offence for companies, including banks, and their directors, not to comply with the disclosure provisions in the companies Acts regarding loans to directors and connected persons and regarding the material interests of directors in company contracts.

I also warmly welcome the increased powers afforded to the Director of Corporate Enforcement, including the greater powers to enter premises and seize documents. In respect of the operations of Anglo Irish Bank, I am concerned that action must be taken as soon as the alarm bells ring. The enforcement officers must act straightaway. There should be no time lag. There is concern that there was a gap between the ringing of the alarm bells and the entry into the property. The power to seize documents will enhance and assist in the investigation of malpractice.

I commend the Minister and her staff on their work on this Bill which will go a long way to restoring Ireland's reputation and reassure people not just here, but internationally that Ireland is a safe and trustworthy place to do business.

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