Back blogging again after a few months of enforced absence during a period of political, home, work and academic pressures. Sharing some thoughts on Mick Wallace today and his escapades.
In brief I believe the recent revelations about Independent TD Mick Wallace leave more questions open than answered and add up to a litany of violations of company law which could strip away his corporate protection.
The headline breach is of under-declared tax, itself a criminal offence, but that is only one of many violations which may arise from the financial dealings of Wallace’s firm. It appears to me that Wallace’s claim to position himself apart from company affairs may not stand up to closer legal scrutiny.
Rightly people are focusing on the headline breach of the tax evasion. Whilst this is massively serious there are numerous other company law breaches which flow from his actions. Under the Companies Acts Deputy Wallace could be held liable at least for reckless trading, fraudulent trading and failure to keep proper books of account. Both criminal and civil consequences can result and most significantly the separation between the company and Mr. Wallace the individual then breaks down. Basically he loses the claim to separate legal personailty once certain improper actions are proven which on the facts of this case mirror Re PSK Construction where an almost exactly similar scenario saw separation stripped away.
If any one of his many creditors, including the revenue, moved a motion to wind up the company as it would be entitled to do if it cannot pay its debts then it is quite likely the corporate legal separation would be removed and Mr. Wallace would become personally liable for the company debts were any of the above charges were to be found against him. There are also incredibly obvious breaches such as being apparently a single director company which is clearly prohibited under company law. You would wonder who, if anyone, was advising him of his legal responsibilities or did he choose to ignore such advice if received.
UPDATE – A report in today’s press suggests Mr. Wallace sold his vineyard to his brother recently as part satisfaction of a debt. Again if I was in the shoes of the liquidator I would be looking at whether this was a “fraudulent preference” where one creditor is preferred over another, the intention being to deny other creditors access to the same limited resources. Given the preference / disposition was to a connected person (family member) this transaction could be undone in the event of a liquidation. – UPDATE ENDS
Of course we all want businesses to succeed rather than fail and for jobs to be saved. But breaking the law is never the right option. For a company in his circumstances one obvious alternative would have been examinership which could have saved jobs and the company by restructuring the debts, working with the courts rather than against them. I would strongly urge anyone in this position to consult with a legal or financial advisor instead of embarking on an illegal path, no matter what the motivation. Jobs and companies can be saved in other, more proper and permanent ways and without resorting to illegality.
In terms of the wider political implications, the public rightly demand a higher standard from politicians today and the same standard has to apply across the board. All politicians have a duty to earn and restore the public trust and all citizens must be equal before the law. No excuse is ever good enough for defrauding the tax payer. I am well aware my own party has had issues in the past and is taking serious measures to address them. I had no hesitation in doing what was necessary at my first ever meeting of the national executive in the aftermath of Mahon. I believe my own generation of politicians has no truck with excuses from any person, in any party, in any position. It is a basic political entitlement that those who ask the public trust should earn it and be clearly able to demonstrate why.