The Office of the Director of Corporate Enforcement (ODCE) has published its Annual Report for 2015.
Key Developments from the Report:
- Under the Companies Act 2014, which was brought into force on 1 June 2015, a new regime of Restriction and Disqualification Undertakings was introduced. This provides a statutory mechanism whereby, in appropriate circumstances, the ODCE can offer company directors the option of consenting to a Restriction or Disqualification Undertaking (on a voluntary basis) rather undergoing legal proceedings before the High Court. A number of restriction undertakings were obtained from directors of insolvent companies under the new regime during 2015. In the Annual Report, the Director of Corporate Enforcement notes that while the regime is still in its infancy, in the event that the provision of Undertakings becomes the norm, the result will be to significantly free up Court time to deal with other matters;
- 171 company directors were restricted and a further 14 disqualified by the High Court on foot on applications by the ODCE;
- Voluntary rectification of directors’ loan infringements was achieved in 89 cases (a reduction from 115 cases in 2014) and to an approximate aggregate value of €21m;
- Cautions were issued to a total of 73 defaulting companies as an alternative to formal enforcement actions, including to the directors of 13 companies in relation to matters associated with the keeping of proper accounting records. 132 directions were issued to relevant parties requiring them to comply with their statutory obligations under company law;
- 4 demands were issued for the production of companies’ accounting records and other relevant documents;
- A successful appeal was made to the Court of Appeal, of a High Court decision not to disqualify the directors of a company which had been struck off the Register whilst insolvent. As a result, the High Court decision was overturned and Restriction Declarations were made in respect of the directors;
- A 19% reduction in the number of insolvent liquidations was reported, compared to 2014. The Report states that based on current indications, a further reduction of approximately 17% is expected over the course of 2016; and
- Finally, the Annual Report reports that the ODCE plans a strategic shift towards confronting more serious wrongdoing in 2016 and plans to focus its available resources on activities that are most likely to maximise its effectiveness as an enforcement body.