| 9.1°C Dublin

'Unqualified' liquidators face clampdown

A number of liquidators working on insolvency cases don't have recognition from any official accountancy body or authorisation from any other agency, the Irish Independent has learned.

The surge in insolvency work has brought a large number of people into the industry in the last three years but there is still no licensing system, even though such people are dealing with creditors' funds and staff redundancy payments.

Working without any recognition from an accountancy body means that people with virtually no financial qualifications or training could be handling the break-up of large companies.

The lack of authorisation for liquidators and insolvency specialists follows recent revelations that some people are practising as auditors without any training or certificate from the main accountancy bodies.

A licensing system for liquidators is expected to be introduced in the forthcoming, expanded Companies Acts. The move was first recommended by the Company Law Review Group a decade ago.

When asked about the issue of liquidators, the corporate watchdog said it was aware of the issue and a licensing system was planned.

It pointed out that when a liquidator is appointed they become an officer of the company and therefore subject to the duties of directors with regard to acting in the best interests of the company. A spokesman said the increase in work for liquidators in recent years has resulted in an increase in the number of individuals being appointed to act as liquidators.

While the vast majority of these new liquidators are members of recognised accountancy bodies, there is a small number who are not.

A number of accountants and insolvency experts have contacted the Irish Independent about the issue, pointing out that while Ireland has no licensing system, the UK does.

Irish Independent