Robert Troy (Longford-Westmeath, Fianna Fail) | Oireachtas source

I understand that the Senator is concerned that the proposed section 944AE(3) will limit the publication of, and therefore the transparency of, administrative sanctions imposed on directors in certain circumstances. This is important, and I agree that such limitations should be minimal. However, there is an important reason for their inclusion in this Bill in the first place. I will try to explain this as clearly as possible so that there is no misunderstanding about the need for and rationale behind this rule.This section is a specific requirement of EU law and transposes Article 30c(2) of the EU audit directive practically word for word. The section provides for certain circumstances in which administrative sanctions imposed on a company director by the authority may be published anonymously. Comparing this with what goes on in court, therefore, is not a fair reflection of this aspect. This is an administrative process and done outside the judicial system. The administrative sanctions in question in this Chapter of the Bill relate to situations where a director of a public interest entity is found to have contributed to breaches of EU audit rules. That is all we are dealing with here. These provisions do not extend beyond these breaches into the broader provisions of the Companies Act 2014. What we are doing is transposing EU rules on the audit directive, and that is exactly what this specific section is concerned with in this legislation. It is entirely a decision and at the discretion of the authority as to whether it decides to publish the sanctions anonymously. However, it is a principle of natural justice that a director subject to sanction could seek to make a case that publication of a sanction would be disproportionate in some way.

Nonetheless, there are many precedents for publication of directors' details under the umbrella of the Companies Act 2014, such as in the case of restriction and disqualification of directors. So while I cannot pre-empt a decision of the authority, which is independent in its functions, I can say with confidence that the default position in law and in practise should be that sanctions imposed under this Chapter of the Bill are published. Ultimately, as I said, failure to re-enact these provisions would mean that Ireland would be in breach of its EU obligations.

The authority is independent in its functions, but the default position in law and in practise should be that administrative sanctions imposed under this Chapter of the Bill are published. The threshold for making an exception to the rules is very high, such as, for example, where there is the possibility of damage to the financial system or where a criminal case could be impacted. I understand that, to date, no sanctions have been imposed on directors of public interest entities under sections 957B to 957I. However, there are equivalent administrative sanctions and procedures for statutory auditors in sections 934A to 934I, inclusive, of the 2014 Act. The Irish Auditing and Accounting Supervisory Authority, IAASA, has imposed two sanctions to date under its similar powers and in both cases the full details of the auditors and the audit firms are published on the body's website.