Dominic Hannigan (Meath East, Labour)
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129. To ask the Minister for Jobs, Enterprise and Innovation if he will be enhancing the powers of the Director of Corporate Enforcement to ensure a more successful prosecution of white-collar crimes and provide more dissuasive sanctions; and if he will make a statement on the matter. [7249/14]

Richard Bruton (Dublin North Central, Fine Gael)
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I have no further plans to enhance the powers of the Director of Corporate Enforcement. The Director previously brought to my attention that section 77 of the Finance Act 2011 inserted a new section into the Taxes Consolidation Act 1997 which restricted the amount of information from the Revenue Commissioners that the Director could properly obtain and use in support of his investigative and civil enforcement work under the Companies Acts. Section 6 of the Companies (Miscellaneous Provisions) Act 2013, which was enacted on 24 December 2013, has resolved this difficulty.

Section 5 of the 2013 Act also provided that if a designated officer of the Director is named in a search warrant and subsequently ceases to be an officer of the Director, or is otherwise unable to act, that another designated officer may apply to a judge of the District Court for an order that his or her name be substituted for the original designated officer’s name on the search warrant. That amendment was also made on foot of a request from the Director.

Sanctions for breaches of company law are addressed in the Companies Bill 2012 which it is hoped will be enacted by year end. One of the innovations in the Bill is set out in section 872 and it involves the introduction of a new four-tier categorisation of offences. All offences are clearly identified and categorised throughout the Bill and the associated sanctions are clearly set out.

This reform follows on from a recommendation of the Company Law Review Group (the statutory body tasked with the responsibility of examining company law and making recommendations to me). It is proposed that, subject to a small number of exceptions in the case of the most serious offences which are covered by separate legislation, that all offences under the Companies Acts should be categorised according to this four-tier scheme.

Category 1 offences carry, following conviction on indictment, a term of imprisonment up to 10 years and/or a €500,000 fine. A summary prosecution for a category 1 offence will result in a Class A fine (as defined in the Fines Act 2010. The maximum is €6348.69 and/or a term of imprisonment up to 12 months. An example of a category 1 offence is set out in section 723. This concerns the offence of fraudulent trading with intent to defraud creditors.

A category 2 offence carries a similar penalty for a summary conviction and for a conviction on indictment, will result in imprisonment of up to 5 years and/or a €50,000 fine. For example, if a company enters into a transaction in contravention of section 240 (prohibition of loans etc. to directors and connected persons) any officer who is in default of this prohibition shall be guilty of a category 2 offence.

Category 3 is a summary offence only, attracting a term of up to 6 months’ imprisonment and/or a Class A fine. An example of category 3 offence is to be found in section 394. If a statutory auditor fails to notify the Director of Corporate Enforcement and Registrar of Companies of his or her opinion that a company has committed a category 1 or 2 offence then he or she shall be guilty of a category 3 offence.

Category 4 offences can also only be tried summarily and are punishable by imposition of a Class A fine.

A further new provision has been introduced at section 873 where it is proposed that, following a conviction for an offence under this Bill, the trial court may order that the convicted person should remedy any breach of the Bill in respect of which they were convicted.