chapter  14
24 Pages

COMPANY INVESTIGATIONS BY THE DTI

1 INTRODUCTION

Any system which prohibits certain conduct on the part of companies and those who control companies requires an effective policing mechanism. The purpose of placing restrictions on specified activities and imposing sanctions for breach of those restrictions would largely be undermined if no such mechanism were in place. The companies legislation, with its restrictions upon the activities of companies and those who operate them including, for example, the requirement of an external auditor’s report on the annual accounts,1 provides a framework which, to an extent, acts as an internal policing mechanism. However, this is incomplete and UK company law has entrusted the public policing mechanism to the Department of Trade and Industry (DTI). The company investigations regime administered by the DTI therefore fulfils a crucial role in relation to policing the activities of companies and those individuals who run companies. It primarily concerns the interaction of companies, directors and shareholders on the one hand and the State in the form of the Secretary of State for Trade and Industry, inspectors appointed by him and the Financial Services Authority on the other.2