Conor Lenihan (Dublin South West, Fianna Fail)

Senators should excuse me for chuckling in response to Senator McCarthy's intervention.

This is a standard provision which applies in the case of the majority of appointees to State boards. Appointees to State organisations must be upstanding in all matters, including financial matters. If an individual is financially compromised, he or she could be open to undue influence. This provision is designed to protect the integrity of the board.

Following concerns voiced about this provision during the Committee Stage debate in the Other House, advice was sought as to the precise meaning of the term. As a number of Senators noted, when one coldly reads the legislation, the provision appears to be rather threatening. I am advised, however, that the phrase used is a technical term borrowed from the bankruptcy code. It refers to an arrangement made with creditors under the Bankruptcy Act 1988 or a composition made with creditors under the specific terms of the Act. The provision has a specific meaning and cannot be construed as meaning all arrangements between a debtor and creditor, for instance, a renegotiation of the terms of a mortgage, the example cited by Senator Walsh. It is important that Members are satisfied that the phrase is specific to the Bankruptcy Act 1988 and does not have a wider meaning which encompasses people who have a stressed mortgage or business but have not been subject to the Bankruptcy Act.

I accept the concerns voiced in this and the Other House on this matter. I welcome the appointment of a specific group within the Government which is seeking to implement the measures set out in the Law Reform Commission report regarding the Bankruptcy Acts. I understand the group will seek to amend the Bankruptcy Act 1988. This will present an appropriate forum for further debate on this matter. At present, however, I regret I am unable to accept the proposed amendment.

I reassure Senators that the provision does not have the alarming meaning that any ordinary person would construe from a reading of it. I do not pretend to be wiser than any other Member. While the provision may appear alarming, it is specific to the Bankruptcy Act.