PART II

Industrial and Provident Societies

4. —(1) This Part of this Act applies to a society which is not an agricultural co-operative society, a fishing co-operative society, a credit union or a society to which, by virtue of section 3 (4) of the Credit Union Act, 1966 , section 3 (3) of that Act does not apply.

(2) In this section—

“an agricultural co-operative society” means a society the business of which is wholly or substantially agricultural and the majority of the members of which are mainly engaged in farming and derive the principal part of their livelihood from farming, and in which the acceptance of deposits and the making of loans constitute an insubstantial part of the business of or are incidental to, or are intended to assist the carrying on or the development of, the society's principal business:

“a fishing co-operative society” means a society the business of which is wholly or substantially related to fishing and the majority of the members of which are engaged in fishing and derive a substantial part of their livelihood from fishing, and in which the acceptance of deposits and the making of loans constitute an insubstantial part of the business of or is incidental to, or are intended to assist the carrying on or the development of, the society's principal business.

(3) Notwithstanding subsection (2), the Registrar may, after consultation with the Minister for Agriculture, give a certificate to a society entitling it to be treated, for the purposes of this section, as an agricultural co-operative society.

5.—(1) (a) This subsection applies to a society which was not incorporated before the 4th day of October, 1978, or which on that date was incorporated and either had not accepted deposits or had accepted and held deposits the aggregate of which on that date did not exceed £25,000.

(b) A society to which this subsection applies shall not accept deposits.

(2) Subject to subsection (3), a society other than a society to which subsection (1) applies shall not accept or hold deposits after the end of the period of five years commencing at the passing of this Act.

(3) (a) The Minister, after consultation with the Central Bank, may, by regulation, extend the period of five years referred to in subsection (2) for such further period or periods as he considers appropriate having regard to the public interest.

(b) Regulations under this subsection may apply to a specified class or classes of society denoted by reference to such matters as the Minister thinks fit, and different periods may be specified for different classes of society.

(c) Every regulation made under this subsection shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation is passed by either such House within the next 21 days on which that House has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to anything previously done thereunder.

6. —(1) Subject to subsection (4), a society shall not raise funds (otherwise than by way of subscriptions for shares where the aggregate sum being raised in this manner does not exceed £10,000 in any period of six months) except under and in accordance with the written permission of the Registrar.

(2) The Registrar shall not give permission under this section unless he is satisfied that it is in the interests of the public or of creditors of a society or of the orderly and proper regulation of the business of the society to do so.

(3) (a) A permission under this section may relate to a specified class or classes of society denoted by reference to such matters as the Registrar thinks fit, and shall relate to such a period as is specified in the permission.

(b) A permission under this section may be given subject to the condition that the society concerned complies with any direction given to it by the Registrar relating to the extent and type of funds that may be raised by the society, denoted by reference to such matters as the Registrar thinks fit, and where that condition is imposed it shall be specified in the permission.

(4) This section does not apply to a loan made to a society by a bank, or to the acceptance of deposits by a society to which, by virtue of section 9, section 10 applies.

7. —(1) This section applies to a society which was incorporated before the 4th day of October, 1978, and which had accepted and held deposits which on that date did not exceed £25,000.

(2) A society to which this section applies shall, as soon as practicable but not later than three months after the passing of this Act, submit to the Registrar for his approval a scheme for the repayment to depositors of moneys deposited by them with the society.

(3) A society to which this section applies shall not make any payments which have not been authorised by the Registrar, other than repayments under subsection (2) in accordance with a scheme approved by the Registrar for the purposes of that subsection.

(4) A scheme approved by the Registrar under subsection (2) shall have effect notwithstanding anything in the rules of a society relating to the repayment of deposits by the society.

(5) Where it appears to the Registrar that a society to which this section applies is not complying, or has not complied, with subsection (2) or (3), he may, after giving notice to the society and considering any representations made by it, make an application under section 19 to the Court for the winding up of the society.

8. —(1) A society shall not advertise for the purpose of raising funds or of accepting deposits except under and in accordance with the written permission of the Registrar.

(2) A permission under this section may be given if, after consultation with the Central Bank, the Registrar is satisfied that it is in the interests of the public or of creditors of the society to give the permission.

(3) (a) A permission under this section may relate to a specified class or classes of society denoted by reference to such matters as the Registrar thinks fit, and shall relate to such a period as is specified in the permission.

(b) A permission under this section may be given subject to the condition (specified in the permission) that the society concerned complies with any direction given to it by the Registrar relating to the extent, matter and form of advertising by the society, denoted by reference to such matters as the Registrar thinks fit.

(c) A direction under this subsection may apply for such period as may be specified in the direction and, without prejudice to the generality of paragraph (b), may require a society to take all practical steps to withdraw any advertisement which, in the opinion of the Registrar, is not in accordance with a direction under this subsection previously given by him, and may require that advertisements in such form as may be specified in the direction shall include a statement concerning the financial position of the society or giving any particular information relating to the society.

(4) In this section “advertise” includes publish or display any matter soliciting deposits or funds, whether by notice, circular, photograph, film, sound broadcasting, television, personal canvassing or otherwise.

9. —Sections 10 to 18 apply to a society which was incorporated before the 4th day of October, 1978, and which had accepted and held deposits which on that date exceeded £25,000.

10. —(1) Where the Registrar, after consultation with the Central Bank, is of the opinion that it is in the interests of the public or of creditors of a society to do so, he may, in accordance with this section, regulate the carrying on by the society of the business of accepting deposits, the business of holding deposits or the business of making loans.

(2) Without prejudice to the generality of subsection (1), in exercising a power conferred on him by that subsection the Registrar may have regard to the competence of the management of the society concerned, the capital structure of the society or the ability of the society to meet its obligations to its creditors.

(3) In exercising the power of regulation conferred on him by subsection (1), the Registrar may give a direction in writing to a society in relation to all or any of the following matters—

(a) the acceptance or holding of deposits,

(b) the making of loans,

(c) the maintenance of ratios (which may be specified in a direction) between assets and liabilities,

(d) any other financial matters he thinks appropriate, including the maintenance by a society of adequate paid-up share capital.

(4) A direction under subsection (3) may relate to a specified class or classes of society denoted by reference to such matters as the Registrar thinks fit, and may apply for a period specified in the direction.

11. —(1) In this section “an authorised person” means any person authorised by the Registrar for the purpose of this section.

(2) An authorised person may, at the request of the Registrar, and on production of his authorisation to any person concerned, at all reasonable times inspect and take copies of or extracts from books, accounts, deeds, records or other documents relating to the business of a society, and for any of those purposes may enter any premises at which any such documents are kept.

(3) An authorised person who is carrying out an inspection under this section in relation to a society may, with the approval of the Registrar, carry out a similar inspection in relation to any other society or body corporate which is or has at any relevant time been associated with the first-mentioned society, and for that purpose may exercise, in relation to the associated society or body corporate, a power conferred by subsection (2).

(4) A person who has in his power, possession or procurement any of the books, accounts, deeds, records or other documents of a society referred to in subsection (2) or of a society or other body corporate referred to in subsection (3) shall produce them at the request of an authorised person, permit the authorised person to inspect and take copies of or extracts from them, and give him any information which he may reasonably require regarding any entries in them.

12. —A society shall furnish to the Registrar—

(i) at such times as he may specify from time to time, such information and returns concerning its business as he may from time to time specify and which he considers it necessary to have for the performance of his statutory functions, and

(ii) within such period as he may specify from time to time, any other information and returns concerning the business of the society which he requests in writing and considers it necessary to have for the performance of his statutory functions.

13. —(1) Whenever it appears to the Registrar to be expedient to do so in the interests of the public or of creditors of a society or of the orderly and proper regulation of the business of a society, the Registrar may appoint one or more than one inspector to investigate and report to him, in such manner as he may direct, on the affairs of the society, and for that purpose such an inspector may require the production of all or any of the accounts, deeds, books, records and other documents of the society and may examine on oath its officers, members, agents and servants in relation to its business, and may administer an oath to any such person.

(2) Where an inspector appointed under this section to investigate the affairs of a society thinks it necessary for the purpose of his investigation to investigate also the affairs of any other society or body corporate which is or has at any relevant time been associated with the first-mentioned society, he may, with the approval of the Registrar, do so, and shall report to the Registrar on the affairs of the associated society or body corporate to such extent as he thinks the results of his second or further investigation are relevant to his investigation of the affairs of the first-mentioned society.

(3) All expenses of or incidental to an investigation under this section shall be defrayed out of the funds of the society, or by the members (or former members) or officers of the society, in such proportions as the Registrar shall direct.

14. —(1) An officer, member, agent or servant of a society the affairs of which are being investigated under section 13 shall produce to the inspector all books, accounts, deeds, records or other documents of or relating to the society which are in the power, possession or procurement of such a person and otherwise give to the inspector all assistance in connection with the investigation which such a person is reasonably able to give.

(2) If any person who is an officer, member, agent or servant of the society refuses to answer any question put to him by the inspector with respect to the affairs of the society, the person shall be guilty of an offence under section 28.

(3) Subject to subsection (4), if the inspector thinks it necessary for the purpose of his investigation that a person whom he has no power to examine on oath should be so examined, he may apply to the Court and the Court may, if it thinks fit, order that person to attend and be examined on oath before it on any matter relevant to the investigation, and on any such examination—

(a) the inspector may take part therein by solicitor or counsel;

(b) the Court may put such questions to the person examined as it thinks fit;

(c) the person examined shall answer all such questions as the Court may put or allow to be put to him, but may at his own cost employ a solicitor (with or without counsel) who shall be at liberty to put to him such questions as the Court may think fit for the purpose of enabling him to explain or qualify any answers given by him;

and notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by the person examined and may thereafter be used in evidence against him.

(4) Notwithstanding anything in subsection (3) (c), the Court may allow the person examined such costs as, in its discretion, it may think fit, and any costs so allowed shall be paid as part of the expenses of the investigation.

(5) The Registrar shall forward to the Minister and to the registered office of the society a copy of each report of an investigation under section 13, and shall also furnish a copy to the Court where an application under subsection (3) is made to the Court.

(6) The Registrar may, if he thinks fit, cause the report to be printed and published.

(7) The Minister may lay the report under subsection (5) before each House of the Oireachtas and such publication shall be privileged.

(8) (a) Where it appears to the Registrar after consideration of a report under section 13 that proceedings ought in the public interest to be brought by a society for damages, in respect of any fraud, misfeasance or other misconduct in connection with the promotion or formation of the society or the carrying on of the business of the society, for the recovery of any property misapplied or wrongfully retained, he may bring proceedings for that purpose in the name of the society.

(b) The Minister may indemnify a society against any costs or expenses incurred by it in or in connection with any proceedings brought under paragraph (a).

(9) A copy of any report of an inspector appointed under section 13 shall be admissible in any legal proceedings as evidence of the opinion of the inspector in relation to any matter contained in the report.

(10) Nothing in this section shall require disclosure to the Registrar or to an inspector appointed by him—

(a) by a solicitor of any privileged communication made to him in that capacity, or

(b) by bankers of any information as to the affairs of any customer other than the society or other body corporate the affairs of which are being investigated.

(11) Where proceedings are instituted under this section, nothing in this section shall require any person who has acted as solicitor for a society to disclose any privileged communications made to him otherwise than as such solicitor.

(12) Where under section 13 the affairs of a society (other than a society referred to in that section as the first-mentioned society) or of any body corporate are being investigated, references in this section to officers, members, agents or servants of a society shall be construed as references to officers, members, agents or servants of that society or body corporate.

(13) (a) Where it appears to the Registrar that any person has, in relation to a society the affairs of which have been investigated under section 13, been guilty of any offence for which he is criminally liable, the Registrar shall refer the matter to the Director of Public Prosecutions.

(b) Where the Director of Public Prosecutions institutes proceedings consequent on the receipt by him of a report under paragraph (a), it shall be the duty of all officers, members, agents and servants of the society (other than a defendant in the proceedings) to give him all assistance in connection with the prosecution which they are reasonably able to give.

15. —(1) Where the Registrar is of the opinion, after an inspection under section 11 or after an investigation under section 13, that it is necessary to do so in the interest of the orderly and proper regulation of the business of a society, he may appoint a person to be a member of the committee of management of the society.

(2) Without prejudice to the generality of subsection (1), the Registrar shall, before exercising a power conferred on him by this section, have regard to—

(a) the compliance or otherwise by the society with any provisions of (or directions of the Registrar under) this Act, and

(b) any financial transactions which have been undertaken, or are in the course of being undertaken, by the society and which, in the Registrar's opinion, are, or are likely to be, prejudicial to the interests of the public or of creditors of the society.

(3) A person appointed under this section shall hold office for such period and on such terms as the Registrar may specify and, on the expiry of such a period, the Registrar may renew the appointment for such period or periods as he may specify.

(4) All expenses of and incidental to the appointment of a person under this section, including the remuneration of such a person, shall be defrayed out of the funds of the society, or by the members (or former members) or officers of the society, in such proportions as the Registrar shall direct.

(5) An officer, member, agent or servant of a society shall at all times give all information required by a person appointed under this section for the full and satisfactory performance of his duties.

(6) A person appointed under this section shall report to the Registrar, in such manner and with such frequency as the Registrar may direct, on the affairs of the society.

16. —(1) Where the Registrar is of the opinion, after consultation with the Central Bank, that a society has contravened a direction given by the Registrar under section 10, or that a society is unable, or is likely to become unable, to meet its obligations to creditors, or that it is expedient in the interests of the public (whether or not the society is being investigated under section 13), he may direct the society in writing to suspend, for such period not exceeding two months as shall be specified in the direction, the acceptance of deposits or the raising of funds not authorised by him or the making of payments not so authorised, or both the acceptance of such deposits or funds and the making of such payments.

(2) A direction under this section shall have effect in accordance with its terms but, notwithstanding such a direction, a society may borrow money from a bank or from an officer of the society if the Registrar consents in writing to the borrowing.

(3) The Registrar may apply to the Court for an order confirming a direction under this section or for an order confirming and extending the period of operation of such a direction for such time as the Court may, having regard to all the circumstances, consider appropriate, and the Court may grant such an order.

(4) The Court may, in addition to or in lieu of making an order under subsection (3), make such other order in relation to the matter as may appear to it to be necessary.

(5) Where an order is made under subsection (3) confirming and extending the period of operation of a direction under this section, the society shall, for the purpose of Part VI of the Act of 1963 (as applied by section 19), be deemed to be unable to pay its debts.

(6) The whole or part of proceedings under this section or of an appeal in relation thereto may be heard in chambers.

(7) A society to which a direction is given under this section may apply to the Court for an order setting aside the direction and the Court may grant such an order.

(8) A direction under this section may be amended or revoked at any time by the Registrar.

(9) The Registrar may, if he thinks fit, cause to be published in Iris Oifigiúil, or in such other way as appears to him expedient for informing the public, notice of a direction under this section and of its amendment or revocation.

17. —(1) This section applies in a case where the Registrar has made a direction under section 16 and the direction has not been revoked.

(2) It shall be the duty of the society concerned to make reasonable arrangements for using the funds of the society to meet applications (duly made in accordance with the rules of the society by investors in the society) for repayment of moneys deposited or otherwise invested by them.

(3) Where it appears to the Registrar that the society concerned has been applying an undue proportion of the funds of the society in making loans, in preference to making such arrangements as are mentioned in subsection (2), he may, after giving notice to the society and affording it an opportunity of making representations, make an application under section 19 to the Court for the winding up of the society.

18. —(1) Where a loan is made by a society in contravention of a direction given by the Registrar under section 10, the officers or servants of the society who authorised the loan shall be jointly and severally liable for any loss on the loan occasioned to the society.

(2) Where moneys are accepted on deposit by a society in contravention of a direction given by the Registrar under section 10, or where funds are raised by a society in contravention of section 6, or of a direction given by the Registrar under that section, the officers or servants of the society who authorised the acceptance of those moneys on deposit or the raising of those funds shall be jointly and severally liable for any loss on the moneys so deposited or the funds so raised occasioned to the depositor or investor or depositors or investors concerned.

19. —(1) Subject to this section, a society may be wound up only in accordance with Part VI of the Act of 1963, and, accordingly, that Part of that Act shall, subject to any necessary modifications, apply as if the society were a company.

(2) For the purposes of the application of section 213 of the Act of 1963, a society may be wound up under this section by the Court if—

(a) the society has by special resolution resolved that the society be wound up by the Court;

(b) the society is unable to pay its debts;

(c) the society has, after notice from the Registrar, contravened a provision of the Industrial and Provident Societies Acts, 1893 to 1978, or a direction or permission given by the Registrar under those Acts;

(d) the Court is of opinion that it is just and equitable that the society should be wound up.

(3) (a) Notwithstanding anything in section 215 (as applied by this section) of the Act of 1963, an application under that section for the winding up of a society may be made by the Registrar.

(b) Section 215 (d) of the Act of 1963 shall not apply to the winding up of a society.

(4) The winding up of a society shall not bar the right of the Registrar to apply to have it wound up by the Court.

(5) A society may not be dissolved by an instrument of dissolution.