The money is missing. The excuses don’t add up. And the director sitting across from you?
They’re lying.
It starts small—a transfer you can’t trace, an invoice that never delivered, a sudden reluctance to share the books. Then come the lavish "business trips" to sunny locales, the unexplained investments, the new BMW in the car park with private plates. By the time you realise what’s happening, the damage is done. The company’s accounts have been bled dry. Your trust—and your future—are on the line.
In Ireland, director theft is a silent epidemic. Clever fraudsters don’t steal in one brazen heist; they siphon, manipulate, and cover their tracks while you’re left scrambling. Enhanced pension payments. Phantom suppliers. Tax payments diverted for personal use. Family members mysteriously appointed to the board. Suddenly, you’re outvoted, sidelined, or worse—forced out entirely.
Time is not on your side. Every day that passes is another euro vanished, another document shredded, another email or file deleted or another lie cemented. If you’re watching the signs unfold—the hidden accounts, the sudden hostility, the missing funds—you need to act…Now.
Understanding Director Responsibilities
Company directors in Ireland have serious obligations under the Companies Act 2014, particularly under Section 228. These duties include:
- Acting in good faith and in the best interests of the company as a whole.
- Avoiding conflicts between personal interests and company interests.
- Using reasonable care, skill, and diligence in managing company affairs.
- Ensuring compliance with wider laws – for example tax, employment, health and safety.
When a director breaches these duties – whether by misrepresenting facts, making misleading statements, or misappropriating funds – they can be held personally liable. And that liability can extend beyond civil claims to criminal offence charges, depending on the circumstances.
Legal Consequences of Director Fraud
Director fraud can land someone in serious legal trouble – you are likely to lose more than your job. Under the Criminal Justice (Theft and Fraud Offences) Act 2001, theft, fraud, and misrepresentation can result in:
- Criminal prosecution, with penalties ranging from unlimited fines to imprisonment.
- Disqualification from acting as a director or restriction orders under the Companies Act 2014.
- Civil claims for breach of fiduciary duty, where the director may have to repay stolen funds or compensate for losses.
- Court orders freezing assets to stop further harm.
Personal Liability and Lifting the Corporate Veil
Generally speaking, the company and its directors are treated as separate legal entities. But if a director engages in fraud or wrongful trading – continuing to trade when the company is insolvent, for example – courts can lift the corporate veil. That means the director could be held liable for company debts or for repaying money wrongly taken.
Detecting and Investigating Director Fraud
Spotting fraud early can limit the damage. Red flags might include unusual transactions, missing records, or debts that don’t add up. Steps to take:
- Engage forensic accountants – they can trace missing funds and hidden dealings.
- Review accounts and transactions regularly – unexpected payments or transfers deserve scrutiny.
- Encourage whistleblowing – the Protected Disclosures Act 2014 protects those who report wrongdoing.
- Gather evidence quietly – emails, financial records, and internal communications are crucial.
When investigating, confidentiality is key. Involving legal and financial experts at the earliest opportunity helps protect the company and ensures the investigation meets the standards of proof required for legal action.
Remedies for Director Fraud
If a director is stealing, there are several legal options:
- Civil claims for breach of duty or negligence – to recover funds or compensate for harm.
- Injunctions (such as Mareva injunctions) – to freeze assets and stop further damage.
- Criminal proceedings – reporting the matter to An Garda Síochána or the Corporate Enforcement Authority (CEA).
- Restitution orders – forcing the repayment of stolen company assets.
In some cases, courts may also issue orders disqualifying the director or appointing an independent director to safeguard the company’s interests.
Preventing Director Fraud
Prevention is always better than cure. Companies can:
- Put robust internal controls in place to monitor company’s assets and funds.
- Provide regular director training on legal responsibilities and the serious consequences of fraud.
- Establish a culture of accountability, where misleading statements or questionable dealings are challenged.
Real-Life Examples
Consider a case where a director diverts company investments into a private account. A forensic audit uncovers the transactions and a freezing order prevents the director from dissipating assets. The company recovers much of the stolen money through a court-ordered buyout of the director’s shares.
Or a scenario where a director misrepresents the company’s financial position to secure loans, leading to insolvency proceedings. The High Court, on discovering the fraud, holds the director personally liable for certain debts – a stark reminder of how serious these actions can be.
Steps to Take if You Suspect Fraud
- Secure evidence – preserve records, emails, and communications before they can be deleted or altered.
- Notify the board or shareholders – ensure appropriate oversight and decision-making.
- Seek immediate legal advice – an experienced solicitor can guide you on protective steps and legal action.
- Report the matter – where there’s evidence of criminal activity, inform the CEA or Gardaí.
When director fraud is suspected, swift and decisive action can protect the company’s interests, its creditors, and its future.
