Ceisteanna—Questions. Oral Answers. - Companies' Report.

Tuesday, 10 October 1995

Dáil Éireann Debate
Vol. 456 No. 6

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  33.  Ms O'Donnell  Information on Liz O'Donnell  Zoom on Liz O'Donnell   asked the Minister for Enterprise and Employment  Information on Richard Bruton  Zoom on Richard Bruton   the reason a report under section 392 of the Companies Act, 1963, has not been presented to the Oireachtas since the presentation of the report for the period 1 January 1992, to 30 June 1993; and if he will make a statement on the matter. [14440/95]

Minister of State at the Department of Enterprise and Employment (Mr. Rabbitte): Information on Pat Rabbitte  Zoom on Pat Rabbitte  The latest Companies Report presented in accordance with section 392 of the Companies Act, 1963 was published in November 1993. The drafting of the next report to December 1994 is at an advanced stage. The present computer systems in the Companies Registration Office have [1445] presented difficulties in providing secure statistics for the report. These are being addressed in the finalisation of a new information technology plan. These difficulties, allied to pressures of work and stretched resources in the Companies Office and in handling company investigations and High Court actions, have played a significant part in delaying the finalisation of the next report. It is my intention to present an updated report to my Government colleagues and the Oireachtas as soon as possible.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  What percentage of companies filed returns each year?

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  I do not know that figure but the most recent report published shows a very large number of recalcitrant companies were prosecuted for failure to file returns; 1,963 companies were prosecuted that year. The terms of compliance are being improved under the 1990 Act and an evaluation made of the considerable injection to the IT area which will enable the Companies Office to be more effective. That will impact on the level of compliance.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  In awarding contracts does the State discriminate against companies that have not filed returns?

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  I am tempted to say I will leave that until the main event later today — the procuring and handling of Government contracts.

Mr. E. O'Keeffe: Information on Ned O'Keeffe  Zoom on Ned O'Keeffe  The Minister of State is very confident.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Extremely.

Mr. T. Kitt: Information on Tom Kitt  Zoom on Tom Kitt  He is the relief man.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  It will also deal with the manner in which they were awarded under the ancien regime.

Mr. E. O'Keeffe: Information on Ned O'Keeffe  Zoom on Ned O'Keeffe  The Minister of State was wheeled out for the 6 o'clock news on television.

[1446]Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  A tax clearance certificate is the primary requirement. I do not know if a search is carried out in the Companies Office to see if returns are filed. I do not believe it is mandatory to do so.

Miss Harney: Information on Mary Harney  Zoom on Mary Harney  Will the Minister of State consider discriminating in favour of companies that file returns? Is there any merit in commercialising the office and making it operationally independent? It would not cost anything extra as it could sustain itself financially and the office might not suffer the staff constraints it has at present.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  The procedures and systems in the Companies Office are being examined. I referred to the IT injection envisaged given the evaluation of a plan we are considering. If the latest computer capacity is adopted by the office, there is no reason it should not be able to provide the quality of service which Deputy Harney correctly expects it to provide.

I have not examined the question of its privatisation. I have an open mind on the issue and whether it would contribute to the efficiency with which it does its job. The current review in the Companies Office and the application of the most modern systems ought to put the office in a position to do the job adequately.

Mr. E. O'Keeffe: Information on Ned O'Keeffe  Zoom on Ned O'Keeffe  Is the Minister satisfied the office is adequately staffed and has the necessary expertise to evaluate the companies which make applications?

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Companies Office reports issued over the years, as required under the 1963 Act, have tended to be mainly statistical. The provision in the 1963 Act is very general in nature. It is only in the recent past that the compilation of the report has gone beyond mere statistics. Assessments are now contained in the report in terms of different aspects of the responsibilities [1447] imposed by the Companies Acts and this is likely to be the trend in the future.

It is difficult to give the Deputy a categorical assurance regarding the adequacy of staff. I am not aware of any office which would claim to be adequately staffed, particularly an office which took on the onerous duties included in the 1990 legislation. As Deputy O'Keeffe is aware, extensive impositions resulted from the 1990 Act and this has involved both the Companies Office and the company law section of my Department in extensive new functions. One only has to look at the number of company investigations carried out in the short time since the 1990 legislation was enacted. I cannot say to the Deputy, with my hand on my heart, that the office claims it has adequate and appropriate staff. However, measures have been taken to boost its capacity to do its job and discharge its functions under the legislation.

Mr. B. O'Keeffe: Information on Batt O'Keeffe  Zoom on Batt O'Keeffe  The Minister mentioned the number of prosecutions taking place within the office. Up to what year did the review, which led to these prosecutions, cover? Many Members are aware of companies which were registered for a number of years, but which never made returns and have not faced prosecution.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  The figures I quoted were from the latest report. The trend has been that the report is published approximately one year after the end of the relevant year. Although the position was much worse in the 1980s, the current position probably reflects the additional business I mentioned. I referred to the year 1992 to 30 June 1993. An arbitrary period of 18 months was taken for the report which was presented to the House on 15 November 1993. The prosecutions to which I referred would have taken place within that 18 month period and up to 30 June 1993.

[1448]Mr. E. O'Keeffe: Information on Ned O'Keeffe  Zoom on Ned O'Keeffe  When does the Minister envisage the 1993-94 Companies Report will be published? Is it in the course of preparation? It is unsatisfactory that we are in the tenth month of 1995 and the report is not to hand.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  I agree the situation is not ideal.

Mr. E. O'Keeffe: Information on Ned O'Keeffe  Zoom on Ned O'Keeffe  I am not blaming the Minister of State.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  The report is virtually complete and I expect to be able to bring it to Government within the next couple of months. It will be published before the end of the year. As I indicated, it is not, unfortunately, out of synch with the practice heretofore. For example, the report for 1987 was published on 26 January 1989. The report for 1988 was published on 25 January 1993, which is five years later. I accept the situation is unsatisfactory and although it has improved, it is still inadequate. I have asked my Department to indicate whether it can comply with my wish that the report be available for presentation to the Houses of the Oireachtas not later than six months after the end of the relevant year.

Mr. B. O'Keeffe: Information on Batt O'Keeffe  Zoom on Batt O'Keeffe  I thank the Minister for the information. Can he give a categorical assurance that all the files and registrations up to 1992 have been reviewed by the Companies Office? Is he in a position to state that companies registered prior to 1992 but which did not make returns have all made returns as a result of the 1992 review?

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  I will have to take advice on that matter. I do not think I would be in a position to assure Deputy O'Keeffe or the House that all companies prior to 1992 which were required to register did so or that the Companies Office is in a position to state there is no company unregistered prior to that period which it has failed to follow up. Based on nothing other than anecdotal knowledge about Ireland and the Irish [1449] people — what we are and the way we were — it would be most surprising if every company in the State formally filed returns, was appropriately registered and complied with all aspects of company law. I do not think that is the case. It would be a rather expensive exercise to put in place the type of trawl envisaged by Deputy O'Keeffe. However, this is not, in any way, to condone companies which do not comply with the law. I do not think the Deputy's suggestion is feasible.

Mr. B. O'Keeffe: Information on Batt O'Keeffe  Zoom on Batt O'Keeffe  It seems quite simple to me. If a company is registered, it is mandatory to make a return at the end of the year. It seems a simple process to establish whether a company has made its returns.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  If one examines the statistics for any given year, one would be quite surprised by the number of transgressions. Some of these are merely technical but others are more serious.

Mr. M. McDowell: Information on Michael McDowell  Zoom on Michael McDowell  I am pleased the Minister's mind is open to the question of privatising the management function of the Companies Office. However, it is virtually the universal experience when one is in Opposition — a role I have always played — that when an amendment is proposed to legislation suggesting an annual report should have a specific deadline, every Minister from every party I have confronted always says they will do their best but ask not to be limited in time. Is it not the case that if the Companies Office, which plays the role of the policeman of companies, cannot get its own reports ready in time, it has no moral authority to tell any company to get its annual returns filed within a certain time?

The Minister can tell the management of the Companies Office to get its act in order. It deprives itself of moral authority in its dealings with all the companies it is supposed to kick around when they do not submit their returns on time [1450] if its reports on what it is supposed to be doing are years in arrears.

Mr. Rabbitte: Information on Pat Rabbitte  Zoom on Pat Rabbitte  Before I reply to that, I wish to indicate to Deputy O'Keeffe that in the last report to which I referred, annual company formations were in excess of 14,000 since 1989, so we are talking about a fairly large number of new companies each year.

I agree with Deputy McDowell; it is not good enough. I have tried to sketch the background, I have tried to indicate that the situation has been improving, but anybody who has ever been to the Companies Office on any kind of search would concede that there is a very hefty backlog, for a variety of reasons. Considerable resources have been devoted towards modernising the procedures in the Companies Office and as a result of that its capacity to discharge its functions is much better than it has been.

I indicated to Deputy McDowell that it is my wish to bring about a situation where, within six months of the end of the relevant year, the Companies Report as required by this section of the Companies Act will be ready, that is about as ambitious a target as one could reasonably expect to meet. It also is as ambitious a target as most private companies would meet in terms of their own shareholders, so if we could reach that situation, it would be acceptable and certainly a major improvement on the situation that has obtained up to now.


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