In today’s Irish Times, Colm Keena writes about the possible implications of an INM debt writedown, pointing to the company’s largest shareholder Denis O’Brien’s considerable wealth and his tax affairs.
He sez:
“Last year he bought the Irish business support firm, Siteserv, for €45.4 million. As part of the deal the Irish Bank Resolution Corporation, which incorporated Anglo Irish Bank, wrote off 70 per cent of a €150 million debt Siteserv had with Anglo. Now INM is reportedly seeking the write-off of up to a quarter of its €400 million bank debt. How much is being asked of the Irish banks is not known.”
“No-one is arguing that it is better that companies with unsustainable debts be allowed collapse rather than have their debts reduced to manageable levels. But giving write-downs to companies that are wholly or in part owned by non-resident billionaires who appear to be flush with cash, raises the kind of issues referred to in the OECD report. This is especially so when so many people on moderate incomes are being levied with extra taxes, while also struggling with debts which the banks, and the Government, say should not be written off if the debtor can pay, least it create a moral hazard.”
Would An INM Write-Down Involve Moral Hazard? (Colm Keena, Irish Times)
Previously: $5billion, Eh?
