Tag Archives: Denis O’Brien

Denis-O’Brienphilhogan00141769From top: Denis O’Brien of GMC/Sierra; Phil Hogan, former environment minister who awarded the water meter contract to GMC/Sierra and a water meter.

Nothing will

Catherine Murphy TD in her Dail speech last week drew attention to the fact that GMC/SIERRA, the company which was awarded the water meter installation contract for the Dublin City, Midlands, South East and North West regions, did not come into existence, legally, until July 15, 2013.

Fifteen days after the closing date for bids.

Ms Murphy posed the question: how is it that an entity that did not exist when the deadline closed was awarded a contract?

We asked Legal Coffee Drinker, what’s it all about.

Broadsheet: “Legal Coffee Drinker, what’s it all about?

Legal Coffee Drinker: “Legally, it is possible for a company to be bound by, and benefit from, contracts entered into before it came into existence. This is because of Section 37(1) of the Companies Act 1963 which provides as follows:-

“Any contract or other transaction purporting to be entered into by a company or by any person on behalf of the company prior to its formation may be ratified by the company after its formation and thereupon the company shall become bound by it and entitled to the benefit thereof as if it had been in existence at the date of such contract or other transaction and had been a party thereto.””

Broadsheet: “So a company doesn’t have to be incorporated at the time of a tender made on its behalf to claim the benefit of that tender?”

LCD: “Correct. It just has to ratify it post-incorporation.”

Broadsheet: “So nothing to see here?”

LCD: “Not exactly. There are two issues here. First of all, whether or not there is a contract with GMC/Sierra (which it appears there is) and, secondly, whether or not the award of that contract complied with the relevant public procurement law.”

Broadsheet: “Public procurement law?”

LCD: “A set of legal rules, originating in EU Directives, governing the competitive process for public contracts. They’re summarised here. Under these rules, public contracts can only be awarded to tenderers whose treatment of their employees complies with statutory employment guidelines, who are not in a conflict of interest position and, who have tax clearance certificates.”

Broadsheet: “And the significance of this from point of the GMC/Sierra tender?”

LCD: “Well, all these requirements pre-suppose a public contract tenderer who is in existence at the date of the tender. A company still to be incorporated is not in a position to provide evidence of compliance with statutory requirements or to provide a tax clearance certificate.”

Broadsheet: “But surely a body yet to be incorporated wouldn’t owe any tax anyway?”

LCD: “Maybe, but the rules still require a tax clearance certificate. And even if they didn’t, there would be serious and very fundamental difficulties in considering the merits of a public tender by a company, which had yet to be incorporated. Look at the terms of Section 37(1) above. Where a tender bid is made by a company which has yet to be incorporated, the bid, and subsequent contract, is deemed to have been made with the promoters of the proposed company, unless the company ratifies it when incorporated, in which case the company can claim the benefit of the contract. How is it possible to assess the merits of any tender bid, in circumstances where the identity of the ultimate tenderer is not known – and cannot be known until a company yet to be set up decides whether or not to ratify the tender bid?”

Broadsheet: “So what you’re saying is that the difficulty goes deeper than the mere absence of a tax clearance certificate?”

LCD: “Yes. For the public procurement rules to be applied properly to pre-incorporation tenders there would arguably need to be a provision in these rules dealing specifically with this issue and identifying the deemed tenderer in such a case. The current rules simply don’t contemplate pre-incorporation tenders as being part of the public procurement process and because they don’t contemplate it it’s extremely difficult even on the most generous interpretation to fit them within the scheme.”

Broadsheet: “What implications does this analysis have for GMC/Sierra?”

LCD: “Well, if the public procurement process does not permit the submission of tenders by pre-incorporation companies, this means that the contract with GMC/Sierra was not reached in accordance with the public procurement process. This raises questions both about the possible judicial reviewability of the contract – although it should be noted that the time limits for judicial review are quite strict, and may be past at this stage – and about compliance by the Irish State with its public procurement obligations under EU law – something which may be of concern to the European Commission.”

Previously: Sierra Where Would You Get It

Thicker Than Uisce

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Denis O’Brien, who has a 29.9% stake in Independent News and Media and who owns the Communicorp radio group

Draft Government guidelines on media ownership are to be released by Communications Minister Alex White later today.

It follows the Broadcasting Authority of Ireland determining, in  July 2012, that Denis O’Brien does not own Independent News and Media but, rather, that he has a ‘substantial interest’ in the company.

Ahead of this, Fiach Kelly, in the Irish Times, reports:

New Government guidelines on media mergers say it is “undesirable” for one person or business to hold excessive influence and introduce a “public value” test for future consolidation in the industry.

The draft guidelines, which will apply across print, broadcast and online, also set out thresholds that specify how many shares or holdings are needed to be able to influence the “direction or policy … with regard to news, current affairs or cultural content”.

They say that “a holding or voting strength of more than 20 per cent … will generally constitute a significant interest”, while a 10 per cent share could also constitute a “significant interest”.

There you go, now.

‘Public value’ test to be introduced for media ownership (Fiach Kelly, Irish Times)

Related: Shadow of Denis O’Brien looms over new media merger guidelines (Fiach Kelly, Irish Times)

Previously: Denis O’Brien’s Editorial Interference: The Smoking Gun

Well, That’s A Relief

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Independent TD for Kildare North, Catherine Murphy in the Dáil last night, above, and, top, Companies Registration Office showing GMC Sierra was registered on July 15, 2013

“Independent TD Catherine Murphy said the Government had failed to answer questions about the granting of the meter installation contracts. Ms Murphy, who has repeatedly raised the issue, asked why a cheaper installation offer from Siemens was dismissed.”

“Why did you choose to accept a more expensive option that required us to borrow from the Pension Reserve Fund with massive interest costs?” she asked.

Ms Murphy also queried how GMC-Sierra was awarded a contract even though it did not legally come into existence until 15 days after the closing date for bids, on June 30th, 2013.”

Good times.

Transcript to follow.

Alan Kelly plugs Irish Water while Opposition criticises (Irish Times)

Previously: Contains Impurities

UPDATE: The transcript of what Catherine Murphy said:

“Here we are today, almost 12 months to the week, that you rammed through the Water legislation and gave us a year of confusion and anger.  A year of one scandal after another. The reason we’re back here is because of ‘old politics’. The type of politics that is about arrogance; a Government using a huge majority to dismiss dissenting voices; a Government taking citizens for granted, cronyisms, strokes and ultimately a super-Quango paid for by tax-payers.”

“We’re back here because everything about this Irish Water fiasco has been flawed from the outset. I’ll say it again, Irish people are not fools. They were told that the Bord Gáis partnership was designed to save money then they watched as the Minister eventually disclosed that he knew the consultants (the usual suspects) were going to be paid almost €90 million.”

“They knew that they were being turned from citizens into customers and they resented that. Hugely. If there is one thing Irish people know about it is debt and they know that if they allow themselves to become customers then they will be responsible for repaying all the debt incurred in setting up this Quango and the money it borrows.”

“This has been mired in controversy from the outset and if you hoped that this Bill was going to dismiss that controversy then you are mistaken. You cannot keep dismissing these controversies. All these controversies have not only undermined any chance of people having confidence in Irish water but also eroded confidence in this Government.”

“But there are more controversies that are yet to come to the fore and one of these are the circumstances surrounding the awarding of the metering contract. There are major concerns on this issue, and understandably so.”

“Firstly there is absolutely a question to be answered as to why the cheaper installation offer from Siemens was dismissed. We must have an answer to that question. Why did you choose to accept a more expensive option that required us to borrow from the Pension Reserve Fund with massive interest costs?”

“Next we have got to get answers to the questions regarding the awarding of the contract. There is a key date here and that is June 2013.  In a PQ reply on June 12th 2013, Minister Hogan confirmed that the 30th of June 2013 would the closing date for bidders to apply to be considered for the metering contract. GMC/SIERRA (Company Registration number 530230) was one of the successful bidders. GMC/SIERRA was awarded a metering contract. But, and this is key, that same company, registration number 530230 did not come into existence, legally, until the 15th of July 2013. 15 days after the closing date for bids. How is it that an entity that did not exist when the deadline closed was awarded a contract? GMC/SIERRA – a company with Denis O’Brien as a vested party – was somehow awarded a contract before it even existed.”

“Even to tender for the contract requires, under both EU and Irish Law, a certificate of tax compliance. How could an entity that did not exist in law, get a tax clearance certificate? These questions need answering. They will not go away and they are being routinely spoken about across social media and online media outlets such as Broadsheet.ie”

“What really sits uneasy with people is the debt burden and, in particular, Anglo debt, that was placed on peoples shoulders. That same debt burden that underpins all the austerity measures, including Irish Water. They watched helplessly as Anglo debt was turned into sovereign debt, placing a noose around their necks for decades to come.  500 million to be extinguished each year from now up to 2022, then one thousand million from 2022 to 2025 then 2 thousand million EVERY year until it’s all gone.”

“In that context, imagine the anger that comes with seeing a company called Millington – another company owned by Denis O’Brien – a company established to buy Siteserv, a company who owed Anglo €150 million being sold onto Denis O’Brien’s Millington by Anglo for just €45 million. A discount of €105 million. Essentially, €105 million lost to the State. Interestingly, the €45 million paid for Siteserv was reportedly the lowest bid for the company. Yet it was accepted. Do we have an answer as to why?”

“It should also be noted here that SIERRA is a subsidiary of the aforementioned Siteserv. It gets muddier. There are suggestions that, contrary to all best practice models, the legal firm Arthur Cox, acted for the seller, Anglo, and the purchaser, Millington, during this transaction. If this is the case, then that is another question that deserves an answer.”

“The Taoiseach keeps telling us that this is about more than water. He’s right, it is. It is about people power. It is about people demanding what they demanded before the last General Election. It’s about people demanding different politics. Reform. People are realising that we should not have been exposed to the debt burden that was placed on us. 43% of the entire European banking debt shouldered by one country, us. People know that was unfair.”

“People wanted – expected – this Government, to respect the economic limits of households. They expected this Government to spend wisely. The last thing they expected was to see a hugely inflated, super-quango. December 10 will be an incredibly important date. As important as October 11th was, when over 100,00 people took to the streets, the people who were saying ‘Why haven’t we done this before’ and the people who found strength in the sense of solidarity and realised – it’s not the people who are in power that matters, it’s the power that is in the people.”

Thanks Anne Marie McNally and Gemma

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Tony’O’Reilly at the INM AGM in 2004 (Top) and David Duffy on The Real Deal last night.

You may recall how this summer AIB secured judgements against Tony O’Reilly and companies controlled by him for €45million.

In June the Commercial Court heard that he owed approximately €195 million to eight different banks – with AIB reportedly calling him ‘insolvent’ three times during the hearing.

On The Real Deal, a documentary on Tony O’Reilly (by  RTÉ’s David Murphy) broadcast last night, David Duffy, CEO of AIB, pictured above, said:

“People will make all kinds of comments about what they perceive is the reality. We engage in a very simple process, it’s very consistent and it’s equitable and fair and does not differentiate between one person and another. So there is absolutely no question whatsoever that we took an action for a purpose, other than to treat people exactly as everybody else is treated.”

Further to this, readers may also recall how in June, Colm Keena reported in the Irish Times:

“The purchase of three major Irish businesses over the past two years by the billionaire businessman Denis O’Brien involved total bank write-offs of more than €300 million. The deals saw the businessman invest €230 million to acquire the Siteserv Group, the Topaz Group and the Beacon Private Hospital.”

Mr O’Brien, who has a 29.9 per cent stake, is the biggest shareholder in the Independent News & Media. In April last year the group did a deal with its eight banks, which include AIB and Bank of Ireland, where the banks wrote off €138 million of an overall debt of €422 million, in exchange for a shareholding in the group worth approximately €10 million.”

Good times.

Watch back in full here

Related: Ignominious end to career of Ireland’s first business superstar (Ciaran Hancock, Mark Paul, Irish Times, June 27, 2014)

Sir Anthony O’Reilly described as ‘insolvent’ by AIB (Tom Lyons, Irish Times, June 24, 2014)

Banks write off over €300m in three deals with Denis O’Brien (Colm Keena, Irish Times, June 13, 2014)

(Eamonn Farrell/Photocall Ireland)

independent

Some Web Summit coverage in today’s irish Independent

DJ writes

“I have been noticing the abnormal amount of coverage the Web Summit is getting  across all Denis O’Brien-owned media platforms. It’s almost like he’s behind the whole event. He isn’t is he? Is HE? No? Is HE? NO? NOOOOOOOO? Is HE? He isn’t?

Bitter begrudging keyboard whatsit or cogent observer of Irish flotsam?

We may never know.

90093094siteserv

“Minister, there would be some unease about the fact that Denis O’Brien’s close political links may have been instrumental in his bid to buy Siteserv, the company that won the State contract to install water meters for Irish Water.

“I think the idea that powerful businessmen with close ties to the establishment still end up profiteering from decisions made by governments or semi-State bodies must be a worry for this Government as you promised that things would be different.”

“The very nature by which this gentleman ended up in possession of Siteserv is very questionable. He did a deal with IBRC where €100m of debt that Siteserv owed to IBRC, which was really the taxpayer, was wiped off….”

“…two higher bids for the company that would have earned the State more money were rejected and a former Fine Gael minister [Alan Dukes] was chairman of IBRC at the time the deal was approved”.

Independent TD Mick Wallace in the Dáil under privilege (*blows raspberry*) today.

“I think that is a very worrying set of assertions as opposed to a question…That politicisation of the public procurement system would be quite improper and unlawful … Bluntly, considering the deputy’s position, I am surprised at some of the assertions he has made.”

Minister Brendan Howlin responding.

Wallace says O’Brien’s Siteserv bid ‘questionable’ (RTÉ)

Previously: Denis O’Brien and That Siteserv Deal

denisBaloon

Denis O’Brien

“In Ireland, there might eventually be only one or two newspapers. The problem now is, there are a lot of management teams in media who don’t see any way of co-operating, and to be honest, they are the cows on the line.”

“People in media and management can’t cooperate, and if you don’t cooperate sending vans, sharing resources, sharing everything, nobody will survive. Or only one will survive.”

“You take INM [Independent News and Media], which has stabilised. I think [INM chairman] Leslie Buckly had a massive impact in doing that, and with great difficulty, and the board met nearly every week. It’s a real worker board, and not a lot of reward.”

“It is the digital side where they made the investment, and that is where the really big bet is. Hopefully, we can maintain a good solid base of readers who buy the paper every day. It is a huge challenge, complicated by the fact that all the news you see about media is written by media, so they are all conflicted.”

“At the end of the day, there has to be pollination between online radio and TV and newspapers. I was up with a business in Canada last week, Rogers, and they have a massive network across all platforms, and whatever business they have is cross-promoted across everything else. They are in radio, television, cable TV, mobiles – they are a mega company. ”

“When I told one of their main guys about the restrictions in Ireland, the guy fell off the chair laughing. He said: “You gotta be kidding me, that is Stone Age stuff. That is completely the antithesis of where the world is moving to.”

Denis O’Brien in an interview with Niall O’Dowd in yesterday’s Sunday Business Post.

The Moriarty Tribunal, Irish Water, or how Mr O’Brien’s purchase of both SiteServ and Blue Ocean Associates came after the IBRC wrote off €64million and €100million in debt from the companies respectively were not discussed.

In addition, there was no mention of the Irish secretary of the National Union of Journalists, Seamus Dooley’s call for the establishment of a commission of inquiry into the future of Ireland’s media.

Good times.

Mr O’Brien’s interview is behind paywall at the Sunday Business Post. It’s also on Irish Central (link below).

Exclusive: Denis O’Brien on Tony O’Reilly, Hillary, Ireland, and making a difference (Niall O’Dowd, Irish Central)

(Photocall ireland)

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James Morrissey, Denis O’Brien’s media adviser, arriving at Dublin Castle in 2010 for the Moriarty Tribunal

You may have read Malachy Clerkin’s column, headlined Is there no end to Denis O’Brien’s intervention in Irish sport?, in the Irish Times last Thursday.

In it, Mr Clerkin recalled an exchange about tax exiles between Mr O’Brien and Oisín Quinn, counsel for the Irish Daily Mail, during Mr O’Brien’s successful libel case against the Irish Daily Mail.

Mr Clerkin then argued:

“It is difficult to see yourself reflected in a national team that on a certain level is just a billionaire’s plaything.”

Further to this, Mr O’Brien’s media gatekeeper James Morrissey has written a letter to the Irish Times this morning, stating:

Sir, – I read Malachy Clerkin’s column in The Irish Times with interest (“Is there no end to Denis O’Brien’s intervention in Irish sport?”, September 18th). Clearly Malachy Clerkin doesn’t want Denis O’Brien to support Irish soccer or Irish rugby. Would he have preferred that these sports would be denied any assistance that just might help them progress? It strikes me as a rather unusual stance for a sports journalist.

If Malachy had bothered to check the facts he would have learned that Denis O’Brien’s support for the Irish cricket team came as a result of a request for immediate assistance during the 2007 Cricket World Cup when they unexpectedly got through to the Super 8 round.

From the general tone of his column it would appear that Malachy would have been happier if the plea for help was rejected. If he has such a hang-up about financial contributions that have sought nothing in return, how does he feel about sports sponsorship?

What strikes me as particularly incongruous is how an advocate of sport could so determinedly attempt to convert what just might be a positive motivation into some covert agenda.

What lies ahead for readers of The Irish Times – Malachy Clerkin rails against corporate branding of sports? Opposing advertising on sports pages? Refuses any element of his salary which might be sourced from commercial activities? Maybe Malachy is a sports journalist who simply does not like sports.

Yours, etc,
JAMES MORRISSEY,
Media adviser
to Denis O’Brien,
Fitzwilliam Quay, Dublin 4.

He used to be a journalist.

No really.

Denis O’Brien and sport (Irish Times letters)

Photocall Ireland