U-turn on company law plan

TAOISEACH Bertie Ahern has announced a major climbdown on controversial plans to make company directors personally liable if their businesses fail to comply with legal requirements.

Mr Ahern said yesterday that recent changes to company law, which were due to take effect shortly, would instead be referred to a review group. The group will re-examine provisions governing directors’ compliance statements, which require directors to include a statement in their annual accounts confirming the business has complied with company and tax laws.

Directors would have faced fines or even jail terms if they failed to fulfil their obligations.

Accountants and business groups had opposed the new provisions because they said they would increase regulatory burdens, add to costs and make Ireland unattractive as a place to do business.

The Institute of Chartered Accountants (ICAI) welcomed yesterday’s announcement but said the three-month timetable for the review was too short.

“These measures have been controversial since their announcement,” said ICAI president Terence O’Rourke. “They impose a regulatory burden on firms in excess of that which applies in other countries and are already being cited abroad as a reason not to do business in Ireland.”

Mr O’Rourke said the requirement for compliance statements needed to be sensible and proportionate. “The existing version is neither,” he said.

EU Commissioner Charlie McCreevy also warned recently that the extra regulations involved in the new proposals would turn qualified people away from acting as non-executive directors of Irish companies.