Amid increased public interest in corporate enforcement, the Office of the Director of Corporate Enforcement (ODCE) has published its Annual Report for 2013. The report indicates a general increase in the level of enforcement actions being taken for breaches of the Companies Acts.
There was a total of 1,803 liquidators’ reports made to the ODCE in 2013. The majority of initial liquidators’ reports (i.e. reports made within 6 months of appointment) related to the Wholesale & Retail sector.
Promisingly, the number of companies entering liquidation in 2013 decreased by 12% on 2012 and for the first time in four years, this figure dropped below 2,200. A total of 252 complaints were received, of which the main areas were:
- Alleged reckless/fraudulent trading (17%)
- Directors’ conduct (16%)
- Unpaid debts (12%)
The number of suspected indictable offences, reported by auditors, rose by 26% to 212 cases. The majority of these cases related to directors’ loan infringements which increased by 30% on 2012.
As a result, numerous enforcement actions have been taken under the Companies Acts. Approximately 34 disqualification orders, 222 restriction orders and €62 million of non-compliant directors’ loans were rectified on foot of ODCE and liquidators’ applications. Additionally, 17 criminal convictions were secured and 11 matters concerning accountants were referred to the professional accountancy bodies for consideration.
The report illustrates the growing importance for directors to ensure that effective systems of corporate governance are in place and that failure to comply with the Companies Acts is becoming an increasingly dangerous business.