Tag Archives: Denis O’Brien

ByLine Pic.... Tom Molloy. Pic Frank Mc Grath

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Yesterday’s Sunday Independent, above; Group Business Editor at INM, Thomas Molloy, top; and Mark Malone, middle

Mark Malone, of Sound Migration, joined the panel of RTÉ Radio One’s Marian Finucane via telephone yesterday morning.

Among the panellists were Irish Times columnist and former Fianna Fáil adviser, Noel Whelan, and Thomas Molloy, Group Business Editor at Independent News and Media.

Mr Malone was invited to talk on the show because he attended Saturday’s protest in Dublin.

As Ms Finucane interviewed Mr Malone, the discussion turned towards Independent News and Media, Denis O’Brien and how GMC Sierra – a subsidiary of Mr O’Brien’s company, Siteserv – won a contract to install water meters.

Marian Finucane: “Mark you were on the march yesterday.”

Mark Malone: “I was indeed, yeah.”

Finucane: “And you were coming from Stoneybatter?”

Malone: “Yes I was coming from Stoneybatter. But if I could just first address some of the comments there…”

Finucane: “Sure.”

Malone: “I think the level of debate there is pretty poor in that you get the sense that ‘these are the times of the poor politicians who go in to the job with a great heart and, unfortunately, some hard decisions are made and, you know, there’s not a lot of respect there’. You talk about the idea of playing the person, rather than the ball. I mean public policy plays the person all the time. If you’re [inaudible], if you’re at the back end of disability cuts, if you’re at the back end of being put back on JobBridge, if you’re experiencing that, that’s you being played.”

Finucane: “Can I go back, I’ll come to that with you. But can I go back first of all to yesterday. What was it like? What was the atmosphere? How many were there? What was the spirit of the thing?”

Malone: “It was a really good atmosphere, I mean, as you probably know, it wasn’t really organised by any political organisation. This is a community response, a grass-roots level response and organised, mostly, through local campaign groups. So, as I say, I was involved with the Phibsboro group, we have folks there from Stoneybatter, from Broadstone, we kind of marched down, there was a couple thousand of us and we met up with folks coming from Heuston, who came from, landed at Heuston, I guess from all over the country. So that’s it. The tone was very relaxed. You know, most of us didn’t really have an idea where we were going, we were kind of walking around town, celebrating the fact that we were out. We were cognisant that over half the people haven’t signed, so it’s very clear that we’re winning this. As much as it likes to get spun, when you see that Denis O’Brien’s media, funnily enough, comes out and condemns an attack on democracy while Denis’ company is putting in the water meters, I mean you don’t need to be very smart to see what’s going on there in some sense.”

Finucane: “Are you implying that the editorial is based on a business decision by Denis O’Brien that was presumably commissioned by Irish Water?”

Malone: “No, I would have a much more nuanced understanding of the role and nature of how the mainstream media plays in shaping public discourse.”

Finucane: “No, I just thought that was the implication.”

Malone: “No, I’ve made clear I do think the mainstream media frames a lot of public conversations [inaudible]..the framing is around this sort of, the fear that, you know, conversations around the usefulness or not, or the problems around peaceful protest.”

Finucane: “Mark, can I just say to you – the very first sentence I uttered after doing the headlines was, I read the Sunday Indo headline and I said to a contributor who’s been writing about this week [Noel Whelan], ‘do you think that’s a bit OTT?’ and his first answer was, ‘yes’. He did think it was a bit OTT. So like, steady on, when you talk about framing, you know, what do you mean by framing, given they were the first two sentences in the programme?”

Malone: “Well another way to phrase it is this is a media conglomerate that’s owned by, you know, mostly owned by an individual who has the contract for putting in water meters.”

Finucane: “So that is the implication?”

Malone: “That’s not an implication, that’s fact.”

Finucane: “And you think that dictates the headline in the Sunday Independent?”

Malone: “No, I said it dictates notions of framing of how things are talked about in the public domain by mainstream media corporations.

Finucane: “Would you go along with that, Noel?”

Noel Whelan: “No but I think that the framing is going on, on all sides here. I don’t know why those involved in the protests feel the need to disagree with those of us who condemn the excesses of some of the protests.”

Finucane [to Thomas Molloy]: “Can I come to you because you are the Independent group. If there’s a plot and a plan and a subtext here, please reveal all.”

Thomas Molloy: “Well if there’s a plot, I need to be told about it but there’s isn’t a plot. This is the kind of nonsense that these people bring out, it’s just absolute drivel.”

Malone: “These people? Sorry, can I come in there?”

Molloy: “No, you know, you know, it’s just wrong to say that there is…it’s wrong…it’s wrong…”

Finucane: “He’s [Malone] is not ‘these people’. His name is Mark Malone and we invited him on the programme.”

Molloy: “It’s wrong to say that there’s a person who has a controlling stake in INM, there isn’t. It’s just a fact that there isn’t anybody who has a controlling stake. Just at that very basic level…”

Finucane: “Ah now, come here to me…”

Molloy: “Let’s stick to the facts.”

Finucane: “He [Denis O'Brien] has a shareholding in Independent News and Media that’s what? 29%, I think it is? Yeah. So I mean, do you know what I mean?”

Molloy: “No it’s the same shareholding that Ryanair has in Aer Lingus.”

Finuance: “Yes.”

Molloy: “Nobody goes around saying Ryanair has a controlling stake in Aer Lingus. If they did, that would be a problem but clearly they don’t, we’ve seen that this week. You know, people can be big shareholders without being, without controlling a company.”

Malone: “Can I just say, like, we’re talking about media, I’m talking about media that’s pretty much first year courses in universities discussing how, you know, media shapes public conversation. And this is why I’m talking about the level of debate. Now you’ve got an editor in chief there trying to come back and refuting what is pretty much 101 sociological, like theory that’s accepted by most lecturers in media studies.”

Molloy: “No, I’m not talking about first year university course here, I’m talking about reality, I’m talking about the Irish media landscape, as we all live and work in it. And, you know, whether or not you agree with ‘Attack on democracy’ as being over the top, the reality is that there are protesters outside Paschal Donohoe’s house. He has a family, he has to put up with that. What happened to Joan Burton, again, whatever you think about it, was really quite extraordinary and we are, we are coarsening the debate in this country, we’ve got to the stage where politicians will not be able to mix with other people in the streets and will not be able to pick up on what’s already happening and that’s a great shame because one of the conceding graces of Irish democracy has been that our politicians live among us.”

Finucane: “Well let me go back to Mark, let me go back to you because you said that it [Saturday's protest] was good humoured and you say that the whole point of the representation on the streets yesterday was of those who haven’t signed up, as opposed to those who have.”

Malone: “Absolutely and I mean we talk about, I mean I could send you links all day long about videos on YouTube around men in masks coming into my community to put in water meters, coming in to intimidate us on a daily basis.”

Finucane: “Men in masks?”

Maloney: “Men in masks. I mean this is obviously, you can go to the Journal.ie, they’ve covered it, RTÉ haven’t really covered it that much. You have private security firms, like Guardex, who are there gathering intelligence, coming up, you know, coming up to people like me, to other individuals, naming us by name, telling us they know where we live, as whilst we’re taking part in a sort community protest of civil disobedience. Obviously, you know, we’re trying to stop the water meters coming in but there’s a level of actual intimidation, that stuff is on YouTube for sure, as well.”

Finucane: “Yeah well, you see, the interesting thing, Mark, is for somebody  that gets information from people like you and from the media, as you call it, etc, etc, we hear both sides complaining about intimidation.”

Malone: “Absolutely, yeah, well I think there’s a differing level of conversation, I mean whatever about shouting names at politicians, I think that’s relatively fruitless, probably not that useful, that’s very different to private companies coming into my street and into my community and intimidating us, as part of a process of pushing through State policy. That’s, that has serious implications…

Molloy: “It’s not your street.”

Finucane: “Yes but it..”

Malone: “But to come back to yesterday’s march. Yesterday’s march was a celebration. Let’s not lose sight of the facts: we’re winning this, we’re winning this hands down. The State probably needs about 90% for this project to go through, it’s no way near that as the deadline approaches.”

Finucane: “Right.”

Malone: “So I’m very proud and inspired to be part of the movement, it’s the largest civil disobedience movement in generations.”

Listen back in full here

Previously: Dumb Intelligence Gathering

Robert PittRobert Pitt, chief executive of Independent News and Media

At a meeting this afternoon the group’s employees were told that a ‘centralised news desk’ would be introduced to coordinate content for its daily and Sunday newspapers, as well as its digital titles.

The group’s sports reporters would also be brought together in a ‘hub’, it said, which mirrors a similar system introduced for the group’s political and business reporters in 2013.

Up to 30 jobs will be cut as part of the cost-cutting measures, and employees were told a voluntary redundancy package would be introduced as part of this.

INM announces changes to editorial structure at its newspapers (RTÉ)

(INM)

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)