The conviction of former Enron chiefs in the United States should be a stern warning to company directors in Ireland, the director of corporate enforcement said today.
The Office of the Director of Corporate Enforcement has convicted almost 200 companies and bosses in recent years, securing disqualification's of 25 individuals. It has also seen the restriction of some 200 directors under its supervising regime since 2002.
Director of corporate enforcement Paul Appleby
Paul Appleby, director of corporate enforcement, said the office operates as aggressively as it needs to within the law to target rogue business chiefs. But he admitted it can be difficult to proceed with criminal charges.
"In terms of dealing with our investigations, we pursue matters as strongly as we need to in the circumstances," he said.
"It is very difficult in company fraud investigations to reach the criminal standard of proof, and at times it is necessary for us to proceed on a civil basis, where the standard of proof is lower. But there is a good range of sanctions, including civil sanctions."
A US jury convicted Kenneth Lay and Jeffrey Skilling yesterday of fraud and conspiracy in the collapse of the energy giant. The verdicts brought to an end an era of corporate mega-scandals in which Enron, Worldcom and Tyco collapsed under tens of billions of dollars of debt.
Lay (64) and Skilling (52) were accused of setting up an elaborate scheme to deceive investors over Enron's crumbling finances prior to what was then the largest corporate bankruptcy in US history.
Skilling was found guilty of 19 of 28 counts of fraud and conspiracy and faces a maximum penalty of 185 years in jail. Lay was found guilty of six fraud and conspiracy charges, and federal bank fraud charges in a separate trial. He faces a maximum of 165 years in jail. They will be sentenced on September 11th.
The maximum sentence for imprisonment for breach of the Companies Act in Ireland is ten years and that is for a very limited number of offences only, Mr Appleby told RTÉ's Morning Ireland.
"I think things have improved enormously in Ireland over the last five years," he said. "Our own research indicates three out of four company directors believe that the company law compliance environment has improved.
"There has been a huge cultural change brought about, not only by the office, but by professionals and auditors working in the area," he said.
PA