The office of the Director of Corporate Enforcement, to be established by the Company Law Enforcement Bill, currently on its way through the Oireachtas, is thought to be one of the most powerful such agencies in existence.
The Tanaiste, Ms Harney, has said the Republic's reputation internationally as a safe and well-regulated place in which to do business has been "seriously damaged" by the emergence in recent years of "indications of widespread abuse of company law".
The new agency is designed to counter such negative impressions as to corporate ethics, and any disincentives towards investment that might result from them.
On the other hand the Attorney General, Mr Michael McDowell SC, has said the new agency will be sensitive to commercial realities and the needs of small business and will not be a "Frankenstein" let loose in corporate Ireland.
The creation of the agency was the central recommendation in the McDowell report in relation to restoring the Republic's international reputation.
Its responsibilities fall into four categories: investigation; prosecution; injunction; and prevention.
The investigative role will involve the director taking over the role currently exercised by the Tanaiste, though with the additional resource of having gardai and Garda powers available. The new agency will be able to apply for search warrants from the District Courts.
Changes in the law will allow inspectors to pursue their inquiries into the affairs of a company that has had commercial dealings with the company to which the inspectors were originally appointed. Inspectors will also have increased powers in relation to the questioning of accountants, bookkeepers and taxation advisers employed by the company being investigated.
In relation to prosecution, the director will have the power to prosecute offences under the Companies Acts by summary proceedings and, where appropriate, to refer cases to the Director of Public Prosecutions. A significant increase in the number of company law offences coming before courts is expected and increased fines and prison sentences are being provided for.
The director will have the power to apply to the High Court for injunctions restraining companies or their officers from continuing to breach company law, and to seek orders to restrict or disqualify directors and other officers whose conduct warrants such measures.
The object of these measures is to restrict the ability of people seeking to use limited liability provisions for reckless or illegal purposes.
The director will have a general supervisory role in respect of liquidators and receivers, and will be able to use his own funds to conduct inquiries into companies that have been stripped of their assets. Often the appointment of receivers or liquidators to such companies does not take place because of the absence of assets.
In this way it is envisaged that the "phoenix syndrome" can be addressed and that persons responsible for the affairs of failed companies, which have been stripped of their assets, might be made responsible for such companies' debts or be forced to return assets to such companies.
The director will have an international role in that the agency may conduct inquiries in this jurisdiction on behalf of company law enforcement agencies in other jurisdictions. Similar requests from the director to foreign agencies are also provided for.
