The Irish Independent probe has so far identified as many as 200 fake companies established in recent weeks
The Companies Registration Office is to be hauled in front of the Oireachtas Joint Committee on Enterprise, Trade and Employment after an Irish Independent investigation revealed that hundreds of fake companies have been set up here in recent weeks.
The Companies Registration Office (CRO) has insisted that it has no role to play in verifying crucial details of new companies such as directors, and maintains a “good faith” register.
But the chairman of the Oireachtas committee, Sinn Féin TD Maurice Quinlivan, told the Irish Independent that the CRO’s response to the revelations and its position around whether it should act as a gatekeeper for new company registrations is “not good enough”.
The Irish Independent probe has so far identified as many as 200 fake companies established in recent weeks.
Details of an HSE unit, dozens of legitimate businesses and even the CRO itself are being used by fraudsters to set up the bogus firms.
The fake firms could be used to perpetrate significant fraudulent activity across the world that could potentially see victims bilked out of millions of euro.
The fake firms could be used to facilitate a wide range of fraudulent schemes including trade-based money laundering, evading sanctions, tax evasion, related party transactions to create false collateral and assets used to obtain loans from banks and investors, leading to unpaid loans, according to Kevin Hart, the head of Kroll business intelligence and investigations.
Kroll is an international risk consulting and corporate investigations group.
I was quite surprised to see that number of fake businesses being set up
Mr Quinlivan said the Oireachtas committee will write to the CRO and it aims to have members of the Companies Registration Office in front of committee members “as soon as possible”.
He described the findings from the Irish Independent probe as “very worrying”.
“It’s simply not acceptable,” he said in relation to the hundreds of fake firms that have been allowed to be registered.
“I think it is an important issue,” said Mr Quinlivan. “I was quite surprised to see that number of fake businesses being set up.”
He pointed out that legitimate businesses could be “more easily misled or defrauded” by fake companies that have been registered at the CRO.
It is not the role of the CRO to verify the details of these companies
Real businesses here have been unwittingly drawn into the web of fraudulent firms, with the fake companies using their addresses as the registered address of the bogus entities.
Apart from the HSE, the legitimate businesses targeted include chemists, supermarkets, GPs, furniture outlets and off-licences. Residential addresses have also been targeted.
“It is not the role of the CRO to verify the details of these companies,” said a spokesperson for the Department of Enterprise, Trade and Employment, which oversees the CRO, this week.
The Companies (Corporate Enforcement Authority) Bill was introduced in 2018 and is expected to be enacted in January.
The Department of Enterprise, Trade and Employment has insisted that the new laws will require proof of company directors’ details – which could prevent fake companies being set up as easily as the Irish Independent investigation has found.