Companies Act 2014 section 388

Right to information and explanations concerning subsidiary undertakings

Section 388 deals with the right of statutory auditors of a holding company to obtain information and explanations from its subsidiary undertakings, and the obligations placed on those subsidiaries and the holding company itself to facilitate this.

• Where a subsidiary is established or principally based in the State, both the subsidiary and its auditors must provide whatever information and explanations the holding company's auditors reasonably need to carry out their audit duties.
• Where the subsidiary falls outside these categories (for example, a foreign entity), the holding company must, if asked by its auditors, take all reasonable steps to obtain the required information from the subsidiary.
• Failure to comply with such a request within five days is a category 2 offence, applying to the undertaking, any person concerned, and any officer in default — with "officer" broadly defined to include employees, shadow directors, and de facto directors.
• It is a valid defence to show that compliance within five days was not reasonably possible, provided the person complied as soon as reasonably practicable after that deadline.