Pensions Ombudsman Highlights Danger Of ‘Pheonix’ Companies To SMEs

The Pension Ombudsman has lambasted ‘Pheonix’ companies that start up from companies that have been wound up and shut down saying that they leave a trail of unpaid tax, bill, wages pensions and unpaid suppliers.

Phoenix type companies are businesses that have been restarted in a new guise by individuals who had previously wound up companies to avoid tax and other liabilities.

Paul Kenny from the Pension Ombudsman says that, in the past week, four such companies have come to the attention of his office leaving a trail of debt.

“Large number of Irish construction companies have gone out of business in recent years but some have managed to stay in business in spite of difficult trading conditions, and have managed to meet all their obligations. However, we have evidence in the course of our investigations of a number of “phoenix” type companies and the abuse of limited liability. It is important to distinguish between regular business failures and inappropriate behaviour by a phoenix entity, which is really where the abuse comes in,” he said.

He said that these firms have folded with unpaid wages, pension contributions, tax, PRSI and unpaid bills to suppliers and leave the redundancy payments to the tax payer.

He went on to say that ‘In many cases the controlling directors are back in business in a matter of days, often from the same premises, sometimes employing the same workers, and finishing contracts that were the obligation of the old company’.

It is not illegal to do this in Ireland but their is no doubt that this is becoming a serious issue. Many SMEs are being left with hefty bills from companies who simple close today and open tomorrow under a different name.

“When confronted with these cases my Office investigates them vigorously and it is my practice to inform the relevant authorities including the Revenue Commissioners and the Director of Corporate Enforcement. I will continue to safeguard the pension interests of ordinary construction workers, particularly in the current economic climate.” Mr Kenny went on to say.

Related posts:

  1. Friends First Survey Reveals Worrying Stats For Irish Pensions
  2. Private Sector Pensions “Woefully Inadequate”- Standard Life
  3. Resignation of Superquinn Chief Executive Highlights Suppliers Plight
  4. InterTrade Ireland Business Survey Highlights SME Employment Problem
  5. Deloitte Survey Reveals Confidence Within Companies Again

Leave a Reply

Your email address will not be published. Required fields are marked *

*


5 + = nine

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>