The CEA published its 2024 Annual Report. The report provides a helpful insight into the activities of the CEA and their approach to investigation and enforcement of Company Law in Ireland.
Some of the main highlights from the 2024 Annual Report
Director Restrictions
- 98 restrictions on foot of CEA review of liquidator reports
- 90% by director undertaking
- 10% by Court
- Director Restriction Undertaking
- 109 Restriction Undertakings offered
- 81% accepted 19% not accepted
Director Disqualification
- 20 directors were disqualified on foot of CEA review of liquidators reports being a 43% increase on 2023
- 70% by undertaking and 30% by Court
- 2 directors who allowed the companies they were a director of to be involuntarily struck off were disqualified on foot of disqualification undertakings
- Disqualification Undertakings
- 25 Disqualification Undertakings offered
- 67% accepted 33% not accepted
Enforcement Process of Involuntarily Struck Off companies
The CEA highlighted its approach to dealing with Involuntarily struck off companies and the prosecution of the directors. This will re-commence when the CRO restart the involuntary strike off process.
Insolvency
The CEA corresponded with all liquidators during 2024 to remind them of their filing obligations and of the potential consequences of non-compliance. Following these measures, compliance rates increased in 2024 to 92% in relation to first reports and 90% in relation to further reports.
- 654 reports were received in 2024
- 272 complaints and expressions of concern were received
- Registered Office address issues, Directors Duties/Responsibilities, Allegations of Fraud/Reckless Trading and Debt Disputes being the main complaints made
- 8 protected disclosures
- 78% No further action Deemed Necessary
- 157 Auditor Indictable Offences were reported
- Financial Reporting Standards, Group Financial Reporting Standards, Directors Loan Breach and Inadequate Accounting Records were the main offences reported
- 62% reported from “Big 4” Firms, 16% Mid-Tier, 22% Smaller Firms
- A change of Auditor appears to be a contributing factor in reporting offences
- Holding Companies, investment/financial services/insurance companies, technology and aircraft leasing companies made up the majority of the reports
- SCARP
- 29 reports filed with the CEA
- 16 rescue plans
- 8 where no rescue plan was achieved
- Examiners Reports
- 9 Examiner reports filed
- Investigation on foot of internal analysis
- CEA identified 52 occasions where individuals had been restricted, disqualified or declared bankrupt and had failed to take the necessary steps to remove themselves or put in place the necessary capital base where they wished to remain as a director
- 4 investigation files referred to the DPP.
- 29 reports filed with the CEA
Case Studies
The 2024 annual report contains 20 case studies highlighting various breaches of company law and prosecution. These include:-
- Failure to issue a valid notice convening the Annual General Meeting of a company
- Breach of a disqualification order
- Use of residential address without homeowner’s consent
- Failure to notify the CRO of changes to registered address
- Acting as a statutory auditor while not permitted to do so
- Acting as a process advisor while not permitted to do so
- Failure to comply with the terms of a rescue plan
- Trading under a misleading name
- Persons holding more than 25 directorships
- Charities’ late filing
- Charities’ incorrect director details
- Companies without a director
- Application to compel filing of annual returns under section 797 of the Companies Act 2014 against Blackbee Group Holdings Limited (BGHL) and City Quarter Capital II plc (CQC II)
- Non-filing of section 682 reports – enforcement action Mr. Patric Black
- Restriction Undertaking: SDM Emerald Green Exports Limited
a. the liquidator formed the opinion that Mr. Sean Mitchell was a shadow director of the company, and the main driver who was responsible for the management of the company’s affairs.
b. the CEA offered restriction undertakings to both Mr. Sean Mitchell and Mr. Daniel Mitchell, who consented to restriction for a period of 5 years. - Court Disqualification: Boxer Logistics Limited
a. Two personal bank accounts were used to facilitate the misappropriation of company funds by the directors and their associates, including the facilitation of large-scale tax evasion, fraudulent claims under the Temporary COVID-19 Wage Subsidy (TWSS) Scheme and Employment Wage Subsidy Scheme (EWSS).
b. The Company had an estimated Revenue liability of approximately €6m.
c. The Company did not maintain proper books and records and the directors were found to have placed their own interests ahead of the interests of the company’s creditors. The liquidators also obtained a judgment of €12.4 million against Mr. Bill Henry and Mr. Stewart Alexander.
d. Following an application by the joint liquidators, the High Court imposed a 14-year disqualification on both directors. - Court Disqualification and Restrictions: Swan Fruit Limited
a. The liquidator, through the investigation found that the business of the company was transferred to Haupt Distribution Limited, which continued to operate as a ‘phoenix’ company after Swan Fruit Limited went into liquidation.
b. The Court disqualified one of the directors and restricting the other two directors for a period of five years each. - Court Disqualification: Intensive Community Programmes Limited
a. The company provided services to the Child and Family Agency and the Health Service Executive respectively in connection with the care of highly vulnerable teenagers and young adults
b. The liquidator identified large unexplained withdrawals and payments in favour of the director, Mr. Bernard Morrin, and his family, of approximately €500,000 over a four-year period
c. The Court determined that the appropriate period in this case was a 12-year disqualification - Struck-off Insolvent Company Disqualification Mr. Simon Kelly
a. Simon Kelly was a director of 27 companies which were involuntarily struck off the Register of Companies for failing to file annual returns.
b. he was disqualified from acting as a company director for a period of four years by way of a disqualification undertaking - DPP v Oduntan
a. Ebenezer Oduntan, a Kildare-based pastor of the Redeemed Christian Church of God (RCCG) (City of David), was convicted of 9 company law offences (namely, providing false information), as well as 73 counts of theft, and 5 counts of deception. The aggregate amount involved in the theft charges exceeded €125,000
b. The Court imposed a sentence of seven years’ imprisonment, with the final six months suspended
NB: The content of this article is provided for information purposes only and does not constitute legal or other advice.
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