The directors of the FAI could face up to ten years in jail or a fine of €500,000 if they are found guilty of breaching company law.
Deloitte, the FAI’s auditors, made a submission to the Companies Registration Office (CRO) yesterday saying that the association was not keeping adequate accounting records. The Companies Act allows for directors to be held personally liable for breaches of company law.
Niamh Brennan, director of the University College Dublin centre for corporate governance, said Deloitte’s move was “rare” and serious. “Normally issues of adequate accounting records come up when a company has gone into liquidation and the liquidator finds things are in a mess. In terms of seriousness, as far as a director is concerned it does not get more serious than that in my opinion,” Ms Brennan told The News at One on RTÉ Radio 1.
The Office of the Director of Corporate Enforcement (ODCE) is also expected to be contacted by Deloitte.
Asked to explain why it made its submission, a Deloitte spokeswoman said: “We take our audit process and our statutory obligations very seriously and have acted accordingly, However, we cannot comment on [individual] client matters.”
Advertisement
In their submission, the auditors said that the FAI was contravening sections 281 and 282 of the Companies Act. Section 281 stipulates that a company shall keep or cause to be kept adequate accounting records, and 282 defines what is adequate.
A CRO spokesman said that under these sections, offences could be categorised as either a category one or category two offence. Anyone found guilty of a category one offence is liable, if convicted, for a fine of up to €500,000 or a prison sentence of up to ten years, or both.
On a summary conviction, dealt with in the district courts, a director could be fined up to €5,000 and given 12 months in prison.
The second category of offence can carry a prison sentence of between 12 months and five years or a fine of between €5,000 and €50,000.
It is up to the Director of Public Prosecutions or the ODCE to decide whether any prosecutions are warranted in respect of the FAI’s dealings. The association has been bedevilled over its finances and governance structures since the start of last month when The Sunday Times disclosed that the former chief executive, John Delaney, 51, made a €100,000 payment to the association in April 2017. He and the organisation have described it as a “bridging loan”.
Advertisement
The FAI has asked one accountancy firm, Mazars, to investigate and another, Grant Thornton, has been recruited to inspect its accounts. A subcommittee of the FAI board is also investigating the saga.
Mr Delaney, who has offered to step aside from his role as executive vice-president during the Mazars inquiry was appointed to the board in July 2001 and resigned on March 26 this year. There are ten FAI directors listed with the CRO. These include Eddie Murray, the honorary treasurer, and Michael Cody, the honorary secretary, who offered to resign on Monday.
In a letter sent to Shane Ross, the sport minister, yesterday morning, Donal Conway, the FAI president, indicated that the entire board would step down in the next few months, either at the association’s annual general meeting in July or earlier at an extraordinary general meeting, if the work of a governance group was completed before then.