‘The Best Deal For The State’

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denis-O-brien111-539x2870008ce60-642From top: Denis O’Brien: Catherine Murphy TD

You may recall how Catherine Murphy, Independent TD for North Kildare, has been asking questions of Finance Minister Michael Noonan in the Dáil about IBRC’s sale of Siteserv to Denis O’Brien.

Mr O’Brien bought it for €45.4million cash while Siteserv owed Anglo €150million.

The sale involved IBRC writing off €100million of Siteserv’s debt with €5million distributed to Siteserv’s shareholders.

After the sale of Siteserv to Mr O’Brien, GMC Sierra won a State contract to install water meters. GMC Sierra is comprised of GMC Utilities Group and Sierra Support Services Group. Sierra is a subsidiary of Siteserv.

It was previously reported that Australian hedge fund Anchorage Capital offered a higher price – €52million – but that ‘elements of the offer were considered less attractive then the O’Brien bid’.

And that French company Altrad claimed it was denied the opportunity to make an offer for Siteserv – saying it had been prepared to offer €60million – but that it was ‘effectively denied the opportunity because its representative was told the Irish group was not for sale’.

Last December, Ms Murphy raised her concerns about GMC Sierra’s water meter contract, in the Dáil, asking how could GMC Sierra be awarded a contract [by former Environment Minister Phil Hogan] for water meters even though it didn’t legally come into existence until July 15, 2013, 15 days after the closing date for bids.

She also asked Finance Minister Michael Noonan if he was satisfied that the IBRC acted in the best interests of the State when it sold Siteserv to Denis O’Brien/Millington.

In his reply, Mr Noonan stated that the IBRC acted “at an arm’s length to the State” and that “commercial decisions in relation to IBRC were solely a decision for the bank.”

In another question, Ms Murphy asked Minister Noonan to furnish her with the so-called Relationship Framework and Operational Protocol which oversaw the interactions between the Finance Minister and the former management and board [headed by Alan Dukes, former Fine Gael leader] of IBRC before it was liquidated.

Ms Murphy asked Mr Noonan to indicate to her the precise financial thresholds under the framework which would have “triggered mandatory consultation in advance of a transaction and/or disposal”.

In a reply on February 26 last, Minister Noonan confirmed to Ms Murphy that the bank would consult with the minister in relation to “any transaction which resulted in an adverse impact on total regulatory capital of the bank of greater than €100million would require interaction between the minister and the IBRC”.

Further to this, Ms Murphy then asked, if that was the protocol, why wasn’t Minister Noonan involved in discussions with IBRC, regarding the Siteserv sale.

In a reply, Minister Noonan stated that the protocol only came into effect on March 29, 2012 – 14 days after the Siteserv sale was completed.

Yesterday, Ms Murphy received three more answers from Minister Noonan in relation to records kept of meetings between Minister Noonan and IBRC in respect of the Siteserv sale; if IBRC extended a €10million credit facility to Siteserv between 2010 and its sale in 2012; and about IBRC’s reported rejection of a higher offer for Siteserv.

In his responses, Minister Noonan said the file notes, minutes and other records regarding his meetings with IBRC are currently the subject of Freedom of Information requests and will be released in due course.

As for the €10million credit facility, he said it wouldn’t have been typical for decisions around credit facilities to be disclosed or discussed with Department of Finance officials.

And, as for the higher offer for Siteserv, he said a company which made a higher bid made representations to the Department of Finance, prompting officials from the department to meet with IBRC. At this point, IBRC chairman – and former Fine Gael leader – Alan Dukes reassured the Department of Finance officials that the transaction was the best result for the State.

Minister Noonan also said minutes and records pertaining to these meetings are subject to Freedom of Information requests and will be made available upon their release.

However, here is a more detailed account of Ms Murphy’s questions and answers…

In her first question, Ms Murphy asked if records were kept of any meetings Minister Noonan or his officials held with IBRC in respect of the Siteserv sale; what questions he raised in respect of payments to the directors of Siteserv, in light of the debt that was written off; what questions he raised in respect of the number of tenders considered; why Millington’s bid was more deemed to be more advantageous to the State and the questions he raised in respect of this who were involved in the tender process.

In response, Minister Noonan said:

“As way of background on the transaction referred to in the question, following a meeting between officials from my Department and senior management of IBRC held on 31 May 2012 it was agreed that my Department would review this transaction to better understand the decisions taken by IBRC. This review took place, by way of a meeting between officials from my Department and senior management of IBRC, on 11 June 2012. Following this review, a further meeting was held on 25 July 2012, which I attended along with officials from my Department and senior management from IBRC. At this meeting, the transaction referred to in the question was discussed further, along with a number of other topics. A further meeting between the former Secretary General of the Department of Finance, John Moran, and the then CEO of IBRC took place in August 2012 at which this matter was further discussed.”

“The file notes, minutes and other records regarding these meetings are currently the subject of Freedom of Information requests and will be released in due course as part of these Freedom of Information requests should officials in my Department consider their full release to be appropriate. The Deciding Officer will make the materials released under these Freedom of Information requests available to you upon their release.”

“Until those decisions are made by the Deciding Officer, I can confirm that at the meeting which I attended on 25 July 2012, it was put to senior management of IBRC that officials in my Department had concerns with a number of decisions taken by IBRC in relation to the sale of the company referred to in the question including the decision to allow the sale process to be led by advisors of the company referred to in the question, the decision to exclude trade buyers, the timing of exclusivity and the payment to shareholders. Senior management of IBRC confirmed to me at this meeting that the transaction involving the company referred to in the question was thoroughly assessed by the Board of IBRC prior to them approving it and that the transaction was managed in the best manner possible to achieve the best result for the State.”

Secondly, Ms Murphy asked Minister Noonan if IBRC extended a €10million credit facility to Siteserv between 2010 and its sale in 2012; if he’d confirm that all due diligence procedures were followed in advance of the forwarding of this line of credit; and if the €10 million or outstanding portion thereof was specifically recovered through the sale of Siteserv or if the money was written down entirely.

In response, Minister Noonan said:

“In relation to the Deputy’s query on a €10 million credit facility extended to the company referred to in the question between 2010 and the sale of the company in 2012, I am advised that it would not have been typical for decisions around credit facilities to be disclosed or discussed with Department of Finance officials unless required under the Relationship Framework which governed interactions between the Bank and the Department of Finance as these activities typically would have been within the ordinary course of business for the Bank.”

“Officials in my Department have also contacted the Special Liquidators but they are unable to comment on individual cases as the information requested is confidential and it would not be appropriate for them to release such information. This being the case, I am unable to comment further on this matter.”

Finally, Ms Murphy asked Minister Noonan, if he’d confirm the media reports that IBRC had turned down a higher offer for Siteserv because one element of that proposal included a mandatory eight-week due diligence exercise.

She also asked if Minister Noonan was aware that if IBRC had chosen this reported bid, the new framework agreement would have been in place once the said eight-week period had expired. She then asked if he felt the sale of Siteserv was rushed and, if so, why.

In his response, Minister Noonan said:

“As part of parliamentary question 97 which was answered on 12 March 2015, the Deputy is aware of the process which was undertaken to introduce a revised Relationship Framework for IBRC and the reasons behind this.”

“In relation to the sale of the company referred to in the question, it was after representations made by an unsuccessful bidder in the process and subsequent meetings between that party and officials in my Department that my officials met with IBRC and undertook a review of this transaction. Following this review, my officials were made aware that the transaction involving the sale of the company referred to in the question was run by the company referred to in the question along with its advisors. This review raised concerns with the quality of some of the decisions taken in respect of this transaction, including, among others, that a higher bid for the company referred to in the question was received after entering into an exclusivity agreement with the ultimate winning bidder.”

“In light of concerns stemming from the review of the transaction by officials in my Department, I subsequently met with IBRC’s Chairman [Alan Dukes] and CEO to discuss this transaction. The Chairman and CEO confirmed to me that the transaction process and its terms had been thoroughly assessed by the IBRC Board and that the transaction was managed in the best manner possible to achieve the best result for the State.”

“The file notes, minutes and other records regarding the review of this transaction by my officials are currently the subject of Freedom of Information requests and will be released in due course as part of these Freedom of Information requests should the Deciding Officer consider their full release to be appropriate. The Deciding Officer will make the materials released under these Freedom of Information requests available to you upon their release.”

You Want Transparency?

Denis O’Brien, Fine Gael And The Water Meter Deal

‘I’m Getting Fed Up Of The Constant Questioning From Catherine Murphy’

Thanks Catherine Murphy

28 thoughts on “‘The Best Deal For The State’

    1. Soundings

      The concern is, Siteserv is to this Fine Gael government what the second mobile phone licence in 1994 was to a previous FG government.

      1. Eoghany

        David is the kinda guy who just loves to bend over and take it as often as they please, without question, every time. He’s a good boy.

        1. Mike

          On the contrary, David is actually a naughty boy – but he likes being punished! Bend over and take your medicine David!

  1. Rep

    I’m presuming that the Labour Party is getting favorable coverage in the Indo and donations for this deal.

  2. bisted

    …fairplay Catherine ‘the wink’ Murphy…shows what happens when you ask the right questions…

    1. scottser

      if she keeps on asking those questions, she might well find the brakes on her car failing, or the bannister becomes loose on the stairs etc..

  3. Kolmo

    Keep shining a light on this debacle BS – the arrogant cockroaches of corruption hate that..

  4. JimmytheHead

    Painful to read that. Fair play to Catherine for asking our painfully obvious, dangerously corrupt government to explain itself. I can see in a decades to come, the TV3 special “How we used water to rob an entire nation” starring Enda Kenny and Joan Burton live from their tax exile in the Virgin Islands…

  5. Frilly Keane

    Let’s change this Irish Water SelfServeGMC cast out altogether, and do a Disney Pixar Jim Henson DreamWorks on it.

    If I could impose on Broadsheet to launch a new thread inviting suggestions for a new cast n’ crew.

    Like I’d have Goofy for Alan Dukes
    Garfield for Denis O’Bease
    The 3 blind mice for the IBRC
    Sadler n’Waldorf for Noonan and Sutherland
    Muljan for Catherine Murphy

    D’ye get my drift?
    Is it worth playing

    1. Corkman

      Stephen Donnelly has written to the environment committee asking them to have a full inquiry into the setting of Irish water.

  6. Xena

    Sorry, I’m a little slow this morning. So the jist is that he lied, initially, about his overseeing the transaction? He said he had nothing to do with it but since Catherine kept digging, he has had to reveal his full involvement? Maybe I’m finding it hard to understand because I can’t actually believe it.

  7. Buzz

    Could we cut to the chase and make a complaint to Europe ASAP? Can we get an injunction to end Siteserv’s involvement with Irish Water. This beggars belief. What a corrupt shower, nothing has changed since the mobile phone licence award.

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