Corporate convictions rise 50%

THE number of convictions for company law offences shot up by 50% last year, figures from the corporate enforcer reveal.

The Office of the Director of Corporate Enforcement (ODCE) secured 66 convictions in 2004, an increase of 23 on the previous year.

Offences ranged from fraudulent trading, acting as an auditor while unqualified and acting as a director while disqualified.

The corporate enforcer’s annual report for 2004 shows that 217 people were restricted from acting as company directors.

Paul Appleby, head of the ODCE, said it was likely the number of cases against rogue companies and directors this year would rise.

“Certainly, it is my intention to achieve a substantial increase this year in the number of proceedings leading to possible disqualification,” he said.

Some 1,500 cases of suspected indictable offences were made to the ODCE from auditors, while members of the public made 340 complaints.

Around 500 cases are under review by the body, with the bulk of these concerning directors taking out excessive loans from their companies and failing to keep proper accounts.

The corporate enforcer revealed that he received 20 files from the Irish Stock Exchange last year.

Mr Appleby said many related to breaches of share trading rules and some of the cases are still open.

“Most of them relate to the failure of directors to notify dealings in shares within the prescribed period, which is five days.”

It has also emerged that the ODCE is considering legal proceedings against some of the 19 individuals named in a High Court inspectors’ report on fraud at National Irish Bank.

“I hope in the course of the next few weeks to make a formal decision on whether to proceed with disqualifying a number of people criticised in the inspectors’ report,” Mr Appleby said.

The ODCE also confirmed the file on the activities of AIB Investment Managers and an offshore investment trust linked with former senior bank executives, is still open.

To cope with the extra workload this year, the corporate enforcer has asked the Government to increase its staff from 35 to 55.

The Institute of Chartered Accountants in Ireland welcomed yesterday’s report, but said it was concerned at the burdens placed on auditors.

“We must be wary of a regulatory environment that acts as a disincentive to people becoming involved as executive and non-executive directors,” ICAI chief executive Pat Costello said.