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The Companies (Northern Ireland) Order 1986

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Appointment and functions of inspectorsN.I.

Investigation of a company on its own application or that of its membersN.I.

424.—(1) The Department may appoint one or more competent inspectors to investigate the affairs of a company and to report on them to the Department in such manner as the Department may direct.

(2 )F1 The appointment may be made—

(a)in the case of a company having a share capital, on the application either of not less than 200 members or of members holding not less than one-tenth of the shares issued[F2 (excluding any shares held as treasury shares)];

(b)in the case of a company not having a share capital, on the application of not less than one-fifth in number of the persons on the company's register of members, and

(c)in any case, on application of the company.

(3) The application shall be supported by such evidence as the Department may require for the purpose of showing that the applicant or applicants have good reason for requiring the investigation.

(4) The Department may, before appointing inspectors, require the applicant or applicants to give security, to an amount not exceeding £5,000, or such other sum as it may by order, subject to negative resolution, specify, for payment of the costs of the investigation.

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F1mod. by SR 2004/307

F2SR 2004/275

Other company investigationsN.I.

425.—(1) The Department shall appoint one or more competent inspectors to investigate the affairs of a company and report on them in such manner as the Department directs, if the court by order declares that the company's affairs ought to be so investigated.

(2) The Department may make such an appointment if it appears to the Department that there are circumstances suggesting—

(a)that the company's affairs are being or have been conducted with intent to defraud its creditors or the creditors of any other person or otherwise for a fraudulent or unlawful purpose, or in a manner which is unfairly prejudicial to some part of its members, or

(b)that any actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial, or that the company was formed for any fraudulent or unlawful purpose, or

(c)that persons concerned with the company's formation or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards it or towards its members, or

(d)that the company's members have not been given all the information with respect to its affairs which they might reasonably expect.

[F3(2A) Inspectors may be appointed under paragraph (2) on terms that any report they may make is not for publication; and in such a case, the provisions of Article 430(3) (availability and publication of inspectors' reports) do not apply.]

(3) Paragraphs (1) and (2) are without prejudice to the powers of the Department under Article 424; and the power conferred by paragraph (2) is exercisable with respect to a body corporate notwithstanding that it is in course of being voluntarily wound up.

(4 )F4 The reference in paragraph (2)(a) to a company's members includes any person who is not a member but to whom shares in the company have been transferred or transmitted by operation of law.

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F4mod. by SR 2004/307

Inspectors' powers during investigationN.I.

426 .F5—(1) If inspectors appointed under Article 424 or 425 to investigate the affairs of a company think it necessary for the purposes of their investigation to investigate also the affairs of another body corporate which is or at any relevant time has been the company's subsidiary or holding company, or a subsidiary of its holding company or a holding company of its subsidiary, they have power to do so; and they shall report on the affairs of the other body corporate so far as they think that the results of their investigation of its affairs are relevant to the investigation of the affairs of the company first mentioned.

Para. (2) rep. by 1986 c. 60

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F5mod. by SR 2004/307

Production of documents and evidence to inspectorsN.I.

427 .F6—(1) When inspectors are appointed under Article 424 or 425, it is the duty of all officers and agents of the company, and of all officers and agents of any other body corporate whose affairs are investigated under Article 426(1)—

(a)to produce to the inspectors all[F7 documents] of or relating to the company or, as the case may be, the other body corporate which are in their custody or power,

(b)to attend before the inspectors when required to do so, and

(c)otherwise to give the inspectors all assistance in connection with the investigation which they are reasonably able to give.

[F7(2) If the inspectors consider that an officer or agent of the company or other body corporate, or any other person, is or may be in possession of information relating to a matter which they believe to be relevant to the investigation, they may require him—

(a)to produce to them any documents in his custody or power relating to that matter,

(b)to attend before them, and

(c)otherwise to give them all assistance in connection with the investigation which he is reasonably able to give;

and it is that person's duty to comply with the requirement.]

[F7(3) An inspector may for the purposes of the investigation examine any person on oath, and may administer an oath accordingly.]

(4) In this Article, a reference to officers or to agents includes past as well as present, officers or agents (as the case may be); and “agents”, in relation to a company or other body corporate, includes its bankers and solicitors and persons employed by it as auditors, whether those persons are or are not officers of the company or other body corporate.

(5) An answer given by a person to a question put to him in exercise of powers conferred by this Article (whether as it has effect in relation to an investigation under any of Articles 424 to 426, or as applied by any other Article in this Part) may be used in evidence against him.

[F8(5A) However, in criminal proceedings in which that person is charged with an offence to which this paragraph applies—

(a)no evidence relating to the answer may be adduced, and

(b)no question relating to it may be asked,

by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.

(5B) Paragraph (5A) applies to any offence other than an offence under Article 7 or 10 of the Perjury (Northern Ireland) Order 1979 (false statements made on an oath otherwise than in judicial proceedings or made otherwise than on oath).]

[F7(6) In this Article “documents” includes information recorded in any form; and, in relation to information recorded otherwise than in legible form, the power to require its production includes power to require the production of a copy of the information in legible form[F9, or in a form from which it can readily be produced in visible and legible form].]

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F6mod. by SR 2004/307

Art. 428 rep. by 1990 NI 10

Obstruction of inspectors treated as contempt of courtN.I.

429 .F10[F11(1) If any person—

(a)fails to comply with article 427(1)(a) or (c),

(b)refuses to comply with a requirement under Article 427(1)(b) or (2), or

(c)refuses to answer any question put to him by the inspectors for the purposes of the investigation,

the inspectors may certify that fact in writing to the court.]

(3) The court may thereupon inquire into the case; and, after hearing any witnesses who may be produced against or on behalf of the alleged offender and after hearing any statement which may be offered in defence, the court may punish the offender in like manner as if he had been guilty of contempt of the court.

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F10mod. by SR 2004/307

Inspectors' reportsN.I.

430 .F12—(1) The inspectors may, and if so directed by the Department shall, make interim reports to the Department, and on the conclusion of their investigation shall make a final report to the Department.

Any such report shall be written or printed, as the Department directs.

[F13(1A) Any persons who have been appointed under Article 424 or 425 may at any time and, if the Department directs them to do so shall, inform it of any matters coming to their knowledge as a result of their investigation.]

[F14(1B) If it appears to the Department that matters have come to light in the course of the inspectors' investigation which suggest that a criminal offence has been committed, and those matters have been referred to the appropriate prosecuting authority, it may direct the inspectors to take no further steps in the investigation or to take only such further steps as are specified in the direction.

(1C) Where an investigation is the subject of a direction under paragraph (1B), the inspectors shall make a final report to the Department only where—

(a)they were appointed under Article 425(1) (appointment in pursuance of an order of the court), or

(b)the Department directs them to do so.]

(2) If the inspectors were appointed under Article 425 in pursuance of an order of the court, the Department shall furnish a copy of any report of theirs to the court.

(3) In any case the Department may, if it thinks fit—

(a)forward a copy of any report made by the inspectors to the company's registered office,

(b)furnish a copy on request and on payment of the prescribed fee to—

(i)any member of the company or other body corporate which is the subject of the report,

(ii)any person whose conduct is referred to in the report,

(iii)the auditors of that company or body corporate,

(iv)the applicants for the investigation,

(v)any other person whose financial interests appear in the Department to be affected by the matters dealt with in the report, whether as a creditor of the company or body corporate, or otherwise, and

(c)cause any such report to be printed and published.

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F12mod. by SR 2004/307

Power to bring civil proceedings on company's behalfN.I.

431.  F15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Expenses of investigating a company's affairsN.I.

432.[F16[F17(1) The expenses of an investigation under any of the powers conferred by this Part shall be defrayed in the first instance by the Department but it may recover those expenses from the persons liable in accordance with this Article.

There shall be treated as expenses of the investigation, in particular, such reasonable sums as the Department may determine in respect of general staff costs and overheads.]

(2) A person who is convicted on a prosecution instituted as a result of the investigation, or is ordered to pay the whole or any part of the costs of proceedings brought under Article 431, may in the same proceedings be ordered to pay those expenses to such extent as may be specified in the order.

(3) A body corporate in whose name proceedings are brought under that Article is liable to the amount or vale of any sums or property recovered by it as a result of those proceedings; and any amount for which a body corporate is liable under this paragraph is a first charge on the sums or property recovered.

(4) A body corporate dealt with by[F17 an inspectors' report], where the inspectors were appointed otherwise than of the Department's own motion, is liable except where it was the applicant for the investigation and except so far as the Department otherwise directs.

[F17(5) Where inspectors were appointed—

(a )F18under Article 424, or

(b )F18on an application under Article 435(3),

the applicant or applicants for the investigation is or are liable to such extent (if any) as the Department may direct.]

(6) The report of inspectors appointed otherwise than of the Department's own motion may, if they think fit, and shall if the Department so directs, include a recommendation as to the directions (if any) which they think appropriate, in the light of their investigation, to be given under paragraph (4) or (5).

(7) For the purposes of this Article, any costs or expenses incurred by the Department in or in connection with proceedings brought under Article 431 (including expenses incurred under paragraph (2) of it) are to be treated as expenses of the investigation giving rise to the proceedings.

(8) Any liability to repay the Department imposed by paragraphs (2) and (3) is (subject to satisfaction of the Department's right to repayment) a liability also to indemnify all persons against liability under paragraphs (4) and (5); and any such liability imposed by paragraph (2) is (subject as mentioned above) a liability also to indemnify all persons against liability under paragraph (3).

(9) A person liable under any one of paragraphs (2) to (5) is entitled to contribution from any other person liable under the same paragraph, according to the amount of their respective liabilities under it.]

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F16Art. 432 repealed (6.4.2007 for certain purposes, otherwise prosp.) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2006/3428, arts. 4(2)(a), 7(c), Sch. 4 Pt. 2 (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5)

F18mod. by SR 2004/307

Art. 433 rep. by 1990 NI 10

Inspectors' report to be evidenceN.I.

434 .F19—(1) A copy of any report of inspectors appointed under[F20 this Part] certified by the Department to be a true copy, is admissible in any legal proceedings as evidence of the opinion of the inspectors in relation to any matter contained in the report[F21 and in proceedings on an application under[F22 Article 11 of the Company Directors Disqualification (Northern Ireland) Order 2002], as evidence of any fact stated in the report].

(2) A document purporting to be such a certificate as is mentioned in paragraph (1) shall be received in evidence and be deemed to be such a certificate, unless the contrary is proved.

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F19mod. by SR 2004/307

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