I anticipate that I shall be publishing the Report of the COMPANY LAW COMPLIANCE AND ENFORCEMENT WORKING GROUP in the immediate future. The centrepiece of that Report is the proposal to establish an Office to enforce compliance with company law requirements.

Why have we arrived at the necessity to review the enforcement of company law here?

• In 1997 the compliance rate for companies filing their Annual Returns was found to be as low as 13 per cent. The Registrar of Companies has no greater news for the year ended 1998. Indeed it is a matter of disquiet that a number of significant companies listed on the Stock Exchange are considerably remiss in making statutory returns to the Companies Office,
• Company Law Inquiries were necessitated arising from the McCracken Tribunal and, separately, issues arising from the National Irish Bank/CMI affair,
• the activities that occurred in two listed companies on the Irish Exchange, CountyGlen plc [now in liquidation] and more recently Bula Resources [Holdings] plc, and
• issues of regulation of the accountancy profession.

H aving regard to this background, I believe that breaches of the Companies Acts might be categorised as relating to:

• disclosure,
• accounting deficiencies and
• lack of various registers, or inadequate or delayed completion of same.

It was against this backdrop that last August I announced the establishment of a Working Group to advise me on improving compliance with and enforcement of company law. The terms of reference of the Group were inter alia to review the compliance arrangements and enforcement regimes for company law, make appropriate recommendations to address these issues; and report to me. I anticipate publishing the Report of the Working Group within the next week or so. It will be considered by the Cabinet tomorrow.

It is no secret that the Group found that the majority of company law offences have never been the subject of prosecutions apart from those instigated by the Registrar of Companies in relation to companies failing to file annual returns.

Arising from the McDowell Report, a twofold strategy is being put in place, one concerning the Registrar of Companies, the other being the proposed establishment of a new Office to enforce company law.

The implementation of a new IT system in the CRO has had and continues to have a significant effect on the compliance rate. Throughout 1998 the number of companies complying with their statutory filing requirements has increased dramatically. This significant increase, which is evident since September, 1998, can be attributed to the introduction of the new strike off procedures in the CRO whereby 500 strike off notices per working day are issued. Since the introduction of the scheme some 11,000 companies have been dissolved. In addition 1,800 companies will be prosecuted by the Registrar in the first half of this year for non filing of returns.

Separately I have directed prosecutions where breaches of the Companies Acts have come to light. Amongst sections of the Act that have been prosecuted in recent times are Section 131 of the 1963 Act - Failure to hold an AGM; Section 116 of the 1963 Act - register of members; Section 187 of the 1990 Act - Qualification for appointment as auditor. Currently prosecutions are being considered in relation to Section 23 (failure to change name), Section 146 (inspection of minute book) and Section 381(misuse of the word limited), as well as section 202 of the 1990 Act [books and documents].

The second part of the Strategy is the proposed establishment of an Office of the Director of Corporate Enforcement who would essentially take over the role of company law enforcement. This is a matter that will be considered by the Government at its meeting tomorrow.

The McDowell Group also highlighted the need for ongoing reform in the area of Company Law and associated legislation and suggested that a Companies Bill should be initiated at least every two years. Immediately I should say that I am bringing forward the well heralded Companies (Amendment) Bill, 1999. The main provisions of the Bill are concerned with:

• Examinership
• Audit
• Irish Registered Non-Resident Companies (IRNRs)

The Bill will provide the removal of the statutory audit requirement for companies whose turnover is under £100,000 and meet the other thresholds for a small company under the Companies Acts. However, I should warn that there will still be a requirement to file accounts. Thus directors of companies should commence putting in place procedures to ensure consistency of books and records, especially to meet the section 202 requirements. The Mantruck judgment of the High Court should be a caution to all in the area of books and records!

There will also be a new more straight forward system for striking non-compliant companies off the Register, and in the case of creditors, I propose to permit the restoration procedures to be achieved at Circuit Court level, which will be more economical for all concerned.

You will be conscious that the Government has approved a package of measure under both Company Law and Taxation Law which it considers has the necessary elements to tackle the problems created by certain Irish Registered Non-Resident Companies in a comprehensive and focused manner. These measures were announced by my colleague the Minister for Finance on the 11th February, 1999 on the occasion of the publication of the Finance Bill 1999. I am finalising some of the company law provisions with the Parliamentary Draftsman and I expect to publish the Bill shortly.