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Company Law and the ODCE - time for reform?


MsAnneThrope

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Apr 8, 2009
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I was on the website of the Office of the Director of Corporate Enforcement (ODCE). It's not clear to me if they are simply not updating their website or that they're just not very successful at prosecuting. There are only 2 prosecutions shown for all of 2010. Of these, one is particularly farcical, to me anyway.

Contrary to Section 187 (1) of the Companies Act 1990, Mr. Byrne, carrying on business under the name and style of Byrne and Associates, acted as auditor of seven companies when not qualified to do so. A total of nine charges were before the Court relating to Mr. Byrne having acted as auditor for one financial year in the case of five of the companies and for two financial years in the case of two other companies.

Outcome:
On a plea of guilty, the Court convicted the defendant on seven of the charges, pursuant to Section 187 (6) and (9) of the Companies Act 1990 and imposed fines of €500 in respect of the each of the seven charges, totaling €3,500
€500 for acting as an auditor when not qualified to do so. Total €3,500. I'm scared to ask how much the costs of this 'successful prosecution' were. What kind of a deterrent is that for other people to pass themselves off as qualified auditors, or accountants or tax advisors etc? Imagine being able to charge people perhaps €50k for services you're not authorised/qualified to offer and, if caught, get fined a paltry amount and keep the difference?

In the only other prosecution case listed for 2010 a construction company was fined €1,900 for failing to keep proper accounting books.

Even enshrined in our new NAMA legislation is the derisory fine of €1,000 for lobbying NAMA. €1,000! They must be quaking in their boots! Who on earth thought €1,000, in this day and age, was a suitable deterrent for trying to influence perhaps the most important agency in the history of the State?

Is the ODCE and Company Law in Ireland up to the job in 2010 and beyond? From what I can see there are serious questions to be asked and some serious reform of existing laws badly needed. Thoughts?
 

He3

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Oct 1, 2008
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17,094
Judging by what we can see, corporate regulation via the ODCE is somewhere on a par with banking regulation under Mr Neary.

Harsh, but is the evidence pointing any other way?

And at that, they even claim we expect too much of them:

http://www.politics.ie/justice/133085-corporate-enforcement-office-says-we-expect-too-much.html

Spancelled by Bertie's refusal to give them staff they needed for minimum effectiveness, they really should call the government's bluff and resign.

http://www.politics.ie/justice/45664-crippling-whitecollar-crimebusters-how-fianna-fail-did.html
 

Nemi_

Active member
Joined
Aug 20, 2010
Messages
252
Is the problem with the law, or with the implementation of the law? ODCE have quite extensive powers. What's not clear is why we don't see more prosecutions.
 

MPB

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Joined
Nov 27, 2009
Messages
4,465
Irish corporate law is designed to make corruption legal.
 

Pauli

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Sep 22, 2006
Messages
1,181
Why are people surprised that the ODCE doesn't function properly? Nothing else does so why should this be an exception? The only thing that marks this out for particular attention is that the FF/PD government under Bartie Ahorn denied it the resources it needed to function properly and that this became public knowledge.
 

Cassandra Syndrome

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Aug 23, 2009
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16,908
There will soon be no companies left in Ireland. Just one big convenient corpocracy. No need to worry about company law.
 

loner

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Messages
8,171
I was on the website of the Office of the Director of Corporate Enforcement (ODCE). It's not clear to me if they are simply not updating their website or that they're just not very successful at prosecuting. There are only 2 prosecutions shown for all of 2010. Of these, one is particularly farcical, to me anyway.



€500 for acting as an auditor when not qualified to do so. Total €3,500. I'm scared to ask how much the costs of this 'successful prosecution' were. What kind of a deterrent is that for other people to pass themselves off as qualified auditors, or accountants or tax advisors etc? Imagine being able to charge people perhaps €50k for services you're not authorised/qualified to offer and, if caught, get fined a paltry amount and keep the difference?

In the only other prosecution case listed for 2010 a construction company was fined €1,900 for failing to keep proper accounting books.

Even enshrined in our new NAMA legislation is the derisory fine of €1,000 for lobbying NAMA. €1,000! They must be quaking in their boots! Who on earth thought €1,000, in this day and age, was a suitable deterrent for trying to influence perhaps the most important agency in the history of the State?

Is the ODCE and Company Law in Ireland up to the job in 2010 and beyond? From what I can see there are serious questions to be asked and some serious reform of existing laws badly needed. Thoughts?
Fine of 1000 euro for lobbying Nama at a time when Noel Dempsey tells us that 100,000 euro is chickenfeed---if the ODCE is not adequately staffed to carry out its remit the Director should issue a statement to that effect and offer hisresignation if the position is not rectified within a short time span.
 

MsAnneThrope

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Apr 8, 2009
Messages
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Judging by what we can see, corporate regulation via the ODCE is somewhere on a par with banking regulation under Mr Neary.

Harsh, but is the evidence pointing any other way?
Unfortunately it is beginning to look like a fair comparison.
 

MsAnneThrope

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Apr 8, 2009
Messages
1,818
Found the total of all fines resulting from prosecutions by the ODCE for all of 2008. It's an earth-shattering €46,000.

A record amount of fines were imposed, totalling just over €46,000.
And this was a "record amount" :-(

The Sunday Business Post reported, back in 2005, about the perception of the ODCE:

The office has been criticised for focusing on company law breaches by small business operators, instead of going after larger firms. The majority of prosecutions have been taken against low-profile people.

The investigation into the secret Ansbacher deposits many have yielded tens of million of euro in back taxes, interest and penalties for the exchequer, but it has not resulted in any prosecutions for breaches of company law.
Plus ça change, plus c'est la même chose...
 

Munnkeyman

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Jul 14, 2010
Messages
7,189
Found the total of all fines resulting from prosecutions by the ODCE for all of 2008. It's an earth-shattering €46,000.



And this was a "record amount" :-(

The Sunday Business Post reported, back in 2005, about the perception of the ODCE:



Plus ça change, plus c'est la même chose...

Their budget jumped 33.5% from 2008 to 2009
From €4.34 million (2008) to €5.8 million (2009)

I'm trying to do a big quango spread over here.
http://www.politics.ie/political-reform/136322-quangocratic-republic-ireland-2.html
 

laidback

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Jun 3, 2009
Messages
1,134
€500 for acting as an auditor when not qualified to do so. Total €3,500. I'm scared to ask how much the costs of this 'successful prosecution' were. What kind of a deterrent is that for other people to pass themselves off as qualified auditors, or accountants or tax advisors etc? Imagine being able to charge people perhaps €50k for services you're not authorised/qualified to offer and, if caught, get fined a paltry amount and keep the difference?

I don't know the facts of this case but the offence here may not be as bad as it might seem. You can be a fully qualified member of a professional body such as the Institute of chartered accountants with your sub paid to date but under current regulations you are not eligible to audit limited companies unless you have paid money to go on a govt list. Once upon a time being a qualified accountant was enough to audit limited companies.

A good few years ago, this was changed and now you have to pay a fee (probably quite large) to go on a govt list of registered auditors. I think this is automatic if you fill out the form, pay the money (very important for the govts coffers) and are a member of an accepted accountancy body.

This company might just not have bothered to get on the list of registered auditors in which case they had no option but to plead guilty. it does not mean they are inexperienced/crooked or both - merely that they tried to get out of what is another stealth tax.
 

He3

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Not a very sexy topic this, is it? :cool:
 

charley

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Apr 3, 2009
Messages
1,247
The reason they go after small operators is that they have a better chance of success

Large company will threaten to shut down and put a 100 or so out of work and make the local politician look bad.

Money is power in this country if you are a big enough concern these little pencil pushers will give you a wide berth.
 

MsAnneThrope

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Apr 8, 2009
Messages
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I don't know the facts of this case but the offence here may not be as bad as it might seem. You can be a fully qualified member of a professional body such as the Institute of chartered accountants with your sub paid to date but under current regulations you are not eligible to audit limited companies unless you have paid money to go on a govt list. Once upon a time being a qualified accountant was enough to audit limited companies.

A good few years ago, this was changed and now you have to pay a fee (probably quite large) to go on a govt list of registered auditors. I think this is automatic if you fill out the form, pay the money (very important for the govts coffers) and are a member of an accepted accountancy body.

This company might just not have bothered to get on the list of registered auditors in which case they had no option but to plead guilty. it does not mean they are inexperienced/crooked or both - merely that they tried to get out of what is another stealth tax.
I don't mean to sound dismissive Laidback but would that not just equate to receiving a paltry fine (and no jail term) for tax/fee avoidance? It's hardly a suitable deterrent for that crime in my opinion.
 

MsAnneThrope

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Not a very sexy topic this, is it? :cool:
No, unfortunately not, yet it's a major factor in the cute hoor culture here. There is so much white-collar crime going unpunished or with just the lightest, feather-like slap on the wrist that you couldn't blame all the gombeen crooks that thrive in this country for taking the chances they do. White-collar crime does pay it would seem, in Ireland anyway.

But Biffo lights a smoke at Croke Park and the threads run for pages and pages. A pop star or DJ dies and the server must come close to crashing. But white collar criminals collectively defraud the State of billions and billions and I sometimes feel like Tom Hanks in the Cast Away movie. I know the investigations are ongoing and people are vocal in numerous threads about who did what and who should face the full rigours of the law. The point of this thread is that if they do face the law then they won't have much to worry about, as things currently stand. A €1k fine for being caught lobbying NAMA for example? What a pathetic and insulting joke.

Thanks for the bump though :)
 

MsAnneThrope

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*bump*

11 months have now passed since the ODCE fined Pop Construction in Dublin 15 the earth-shattering sum of €1,900. You will therefore be delighted to read that they've started 2011 with a bang!

On February 3rd of this year, at Dundalk District Court, the ODCE had a successful case against McEvoy’s Self Service Drapery, which yielded fines totalling €3,000 for alleged book-keeping offences.

With a bit of luck we'll get another €2-€3k from a cobbler before the year is out...
 

an innocent abroad

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Apr 15, 2010
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27,685
Laws are for the little people, until they make abuse of corporate law, criminal law those who engage in abuse of any kind of corporate law do not see themselves as criminals.

Note the difference of accountability in England, U.S.A re corporate abuse, it is under federal law with all the power of the criminal and federal law to support it. That's why if you are the C.E.O. of a large corporate entity and engage in corporate fraud you will be marched out in handcuffs in front of your employees ( sends a strong message) and face the judicial system very quickly.

Here? Well what can I say? Better pay your t.v. fee, or you will see the inside of a cell pretty quick, use your company like your own personal bank account, Well I have no comparision so far. Anybody??
 
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