Wednesday 26 November 2014

Fine Gael TD's firm folds with debts of €280,000

Donal O'Donovan and Fiach Kelly

Published 23/01/2013 | 05:00

A Fine Gael TD regarded as a rising star in the party could face prosecution after a company she owns went into liquidation with questions over how the firm was run.

Meath East TD Regina Doherty could face prosecution by the Director of Corporate Enforcement following the liquidation of her Enhanced Solutions Ltd company last week.

A creditors meeting to put the business into liquidation was held last week. Losses are understood to be €280,000, including almost €60,000 owed to the Revenue Commissioners and €50,000 owed to state owned bank AIB.

Business failure is not an offence but accounts filed before the liquidation reveal damning evidence that the company was not being properly run.

In a special report dated August 2012 the company's own independent auditors said it had failed to keep proper books of accounts in 2010, the last period covered by filed financial accounts.

Auditors BCC Accountants issued the special report to the directors of Enhanced Solutions, saying they had "not obtained all the information and explanations" necessary for the purposes of auditing the company.

"We determined that proper books of accounts had not been kept by the company," the report said. "The directors have since taken the necessary steps to ensure proper books of account are being kept by the company (going forward)," BCC said.

Failing to keep proper books of accounts is a specific offence under Section 202 of the Companies Act.

As a director of the IT consultancy, the Meath TD could potentially faces serious penalties, including in the extreme case up to five years in jail, and €10,000 in fines.

The book-keeping breaches become a serious offence if a company later goes into liquidation – as Regina Doherty's Enhanced Solutions Ltd did earlier this month – and the accounting failure is regarded as part of the reason why the company went under.

Jail sentences and heavy fines specifically come into play if the failures to keep the books led to some creditors being left out of pocket, more than they would have been in a normal liquidation or if the failures made it harder to shut the business down in an orderly fashion.

Even if that draconian action is not taken, the Dohertys could be restricted from being directors of any other companies.

Under the Act, the main defence against prosecution is if no harm was caused by the directors' failures, and if the breaches of the Act were not wilful.

That will all be considered in a report that liquidator Edward Walsh must send to the Office of the Director of Corporate Enforcement, the watchdog for company law offences.

First-time TD Ms Doherty has previously admitted taking loans totalling €37,360 from Enhanced Solutions Ltd when the size of the loans relative to the business was also in contravention of the company law, but the debt has been paid back and Ms Doherty has said she had informed the Director of Corporate Enforcement of the breach herself.

Ms Doherty has said previously that Enhanced Solutions Ltd had ceased trading in 2009. She didn't declare her directorship of the company in the annual declaration of TDs' interests after becoming a TD in the 2011 General Election.

She later admitted her error and asked that her records be corrected.

Enhanced Solutions Ltd was struck off by the Companies Office in 2011 for not filing its accounts, but was later reinstated on the register.

Ms Doherty did not return calls last night.

Irish Independent

Promoted articles

Read More

Promoted articles

Editors Choice

Also in Business