Bringing The House Down

at

catherine murphy

Tonight.

The text of Catherine’s Murphy’s contribution to the Siteserv private members’ bill debate.

Grab a large tay.

Firstly I want to thank Fianna Fail for tabling this issue and for allocating me some speaking time. While Siteserv is at the centre of the current controversy, there is also a much wider issue.

I want in the first instance to refer briefly to an article in the Sunday Times from this week.

In the summer of 2011 – around the same time a decision was made to sell Siteserv – Sierra Support Services, a Siteserv subsidiary, started preparing to bid for contracts to install water meters. Siteserv already had a contract with Bord Gais to service boilers. According to Sierra’s managing director, the company began hiring water-metering specialists in mid-2011.

Remember Siteserv was a company that was haemorrhaging cash – it owed IBRC and the taxpayers €150million – and yet here it was planning for the future involving water metering.

On July 26 2013, a Sierra joint venture, GMC Sierra, won three contracts to install meters for Irish Water worth €62m each.

To understand it, you have to go back to June 2011when a sales process for Siteserv – led by Siteserv itself rather than an examiner– was commenced.

IBRC appeared to take a hands-off approach despite being owed €150million.

A sales team was assembled. This comprised Walter Hobbs, four Siteserv executives and board members, Davy Corporate Finance and a KPMG team.

Somewhere along the way a decision is made to exclude trade buyers. 50 candidates were whittled down to 9 expressions of interest in November 2011.

On the 11th November 2011 those interested parties were contacted and asked to sign confidentiality agreements.

Once they were signed, an information pack about Siteserv was sent to the potential bidders. This allowed for a due diligence period with a deadline of 5pm on December 7th set for submission of 1st round bids.

December 7th – remember that date, it’s important. Parties are informed that the sales team want the entire process concluded by mid-January. A very hasty timeline it seems.

We now know that Millington (who was the eventual successful bidder) was not incorporated until December 7th 2011 so given that the entity did not exist – how could it have undertaken the 3 week due diligence period required of other bidders?

Millington could NOT have signed a confidentiality agreement in November 2011 nor could it have received a Siteserv information pack – because it did not exist at the time.

So…if Millington was able to make a bid later in the process than all other bids – how did it come by the information it needed to make that bid?

It’s not something you just do on the back of an envelope, it would have required information.

Is it possible that Millington used a proxy – perhaps Island – to obtain the information on behalf of Millington? If so how does that sit with the confidentiality agreements?

So given that Millington only came into existence on December 7th – the same day of the deadline for the 1st round of bids – can we find out how soon after that did Millington actually submit a bid?

Did that bid follow the 16 point checklist required of the other bids? Or was it the 3 page submission that Mr Dukes referred to when he confirmed that Mr O’Brien had advance knowledge of the sale?

Various sources involved in the process have indicated to me that they always felt that all bidders were not playing from the same starting line.

In the information pack sent to prospective bidders who had signed confidentiality agreements it stated that it should be assumed that the company will be “acquired on a debt free and cash free basis, yet I have had indications that when Siteserv was sold to Millington it actually had €10million on its balance sheet in a combination of cash & debtors.

We know now that Millington paid €40million to IBRC and €5million to shareholders of Siteserv in order to get them to agree to the deal.

Yet others involved in the process were clearly saying they’d have paid more, while independent commentators say that the rushed sale possibly resulted in a less than ideal final price.

Indeed, Ray Nielson from Altrad a potential trade buyer who were excluded from the bidding process; commenting on the need for confidentiality he said
“If you look at any of the acquisitions we have made we keep everything in total confidence. “

He went on to dismiss claims by Siteserv that there was only a “slim” chance that Altrad would stick with its higher bid.

“The reality is that with the level of synergies we’d have with Siteserv, €60m would have been a very low bid for it.. That was our opening bid. If they’d allowed an open fight as we would see it, where they’d allowed in people with synergy, then I think it could have gone for well in excess of €60m.”

Another point that leads to questions is the share activity. At the start of November 2011 the share price for Siteserv is 3 &1/2 cent yet over the course of the month – as the supposed confidential sales process intensifies – the purchasing of Siteserv shareholders increases 53 fold.

In the course of my research a number of names as to who may have been purchasing shares have come across my desk and I will now provide those names to the Director of Corporate Enforcement for review.

The review you’ve commissioned, to be undertaken by Kieran Wallace of KPMG cannot be considered independent no matter how you try to stretch the imagination.

They led the sale. They represented personal interests of many of the key players involved in the sale and Kieran Wallace himself actually led the liquidation of Siteserv PLC.

The Siteserv special liquidators report signed by Mr Wallace is where the disbursement of the €5m to Shareholders was officially signed into reality.

A map of almost of all the key players in the Siteserv saga all leads back to one place and that is KPMG. Let me read you a list:

Hugh Cooney –the Chairman of Siteserv during its sale is a consultant & Company Director with KPMG

Robert Dix – non executive director at Siteserv was a partner in KPMG for 10 years

Walter Hobbs – the ‘independent’ adviser appointed by IBRC to oversee the sale was also a director with KPMG

Des Carville – worked for Davy’s corporate finance leading the Siteserv sale. Managed the Denis O’Brien account at Davy’s. Currently heads up Shareholder Management unit in Dept of Finance and…you guessed it…former KPMG employee

KPMG – specifically Kieran Wallace and Eamonn Richardson were sued by Mike Aynsley and Tom Hunnerson following the winding up of IBRC.

KPMG’s own global code of conduct states specifically that they “must maintain independence and objectivity and avoid actual or perceived conflicts of interest’

By having KPMG undertake this review, the Minister has undermined it from the very outset andnobody in this House or outside can have any confidence in this review.

We also know that KPMG work closely on other businesses affiliated to the the person behind Millington including Topaz, Communicorp, INM & the Beacon Hospital.

Siteserv is not the only issue of concern here Minister and I am concerned that the Terms of Reference include a get out of jail card.

It has been widely reported that the review will involve any transaction which resulted in a capital loss of over €10 million but what has been less widely publicised is the proviso that the special liquidator can pick and choose which transactions are reviewed whether they resulted in a €10million loss or not.

There are other elements to the Siteserv transaction that need to be explored and which the terms of the review don’t cover.

For example in the Sunday Independent asked the CEO at the shareholders’ meeting on April 5, 2012 whether the CEO has significant personal borrowings from IBRC. I think it is essential that in any inquiry a look is taken at how those loans played out, given that there was a large benefit from the payout.

The ultimate buyer of Siteserv was one of the largest debtors of IBRC. His loans had expired and he had apparently written to Kieran Wallace in his role as Special Liquidator seeking the same terms IBRC had allowed him which was to pay off his loans in his own time and at the same low interest rate.

My understanding is that it was costing IBRC 7% for their money, significantly higher than the 1% NAMA were borrowing at.

Even if Denis O’Brien’s loans were eventually paid off in full, the interest rate represented a subsidy.

I can’t understand why that was not a factor given that more money would have to be borrowed to purchase the company; as I understand it, it was the state owned AIB that put up most ofthe money for the O’Brien owned Millington to purchase Siteserv even though he had huge loans.

So surely it’s clear minister, that the proposed review is not only conflicted, it is simply not wide enough to provide a true picture. I would call on KPMG to recuse themselves – as per their own code of conduct – and ask you to reconsider the premise of the review and go back to the drawing board.

*thud*

Earlier: Serv’d

Update:



Yesterday: Giving Back To The Few

Thanks Anne-Marie McNally

51 thoughts on “Bringing The House Down

    1. Liz Wallace

      Hi Jermy pity you could not do a show here and get all the government politations to take a lie dector test it would take up a whole series of shows and expose all the liars lol

  1. Will

    All hail Irelands overlord Denis O Brien, he has half the country bought and paid for. Ah sure it’s all grand lads, nothing to see here.

      1. Odis

        The story on [REDACTED] has been [REDACTED]. Told you so Bodger. You want to watch who you mess with m80.

    1. ahyeah

      Yep. Imagine all the sh1te that they’ve got away with over the years. This entire kip needs to be pulled apart and scrutinised.

  2. Walter-Ego

    Ireland, The Best Little Country to do Business in.
    Just throw a few bob in a brown envelope there.

  3. Truth in the News

    This is one of greatest political and business scandal’s to emerge in
    in Ireland for a long time, if FF were in power there be uproar from FG
    and Labour would be in a state of elevated hysteria, there would need
    to be permanent medical supervision to ensure that none of the socialist
    pretenders in Labour got a heart attacks, or developed the art of human
    flight even sprouting wings.
    The longer it runs the worse it will get and will eventually take them down
    and the public mind has now realised that the introduction of Water Tax
    was nothing more than to enrich one individual in particular and had nothing
    to do with conserving water and repairing/upgrading the water infrastructure.
    Everything this Government has done, needs to be undone as they are
    totally incompetent and seem to have gone a sleep like Rip Van Winkle.
    Catherine Murrphy has done this Nation a Service and she needs to put
    in a more powerfull position to investigate a lot of other matters just lurking
    below the surface…..We need more Independent TD’s not less..
    How come ReNua never probed this issue……Lucinda where are you.

    1. Miko

      Really? Given the setting up of IW was a FF/IMF agreement, that the board of IBRC was appointed by FF I’m failing to see how this can be laid at the current Government. In any case I’m still not seeing this as anything other then an attempt to roll back IW by introducing Ireland’s favorite bogeyman. Not a nice man mind you. But I’m still waiting for any concrete indication there was any wrongdoing in the wind down of IBRC and divestment of companies like Siteserv. Unfortunately it looks like another expensive tribunal to satisfy the mob…

        1. Louise Hannon

          I think some pple here have been walking about with ears eyes and nose shut. If that’s even possible. Siteserv is corruption nothing short. If pple allow this to continue nothing will change. Take a stand people and clear this cronyism from Ireland for good. We need a new order where a government of the people for the people works for them not to line rich peoples pockets

        2. miko

          And….. a couple of TD’s drank (nothing new there) and had a Yes/No vote? How on earth is that in any way linked to Siteserv? Are you really trying to say that somebody drank a pint -> therefore every single member of Dail was drunk and therefore the legislation was corruptly passed as nobody was sober enough? Is that seriously your point?

          For the record I’m not a fan of having a Dail Bar though accept the reason that Parliamentarians need somewhere to go without being assaulted by some of the rabble associated with the water protests. http://www.independent.ie/irish-news/rabbitte-trapped-in-pub-by-50-austerity-protesters-29429490.html

          Of course I suspect Paddy etc are far less appalled about assaults on democratically elected public representatives than a Indo click bait story of no substance.

      1. Atticus

        No wrongdoing? Paying shareholders of a liquidating company a €5million sweetner is normal business practice?

        1. miko

          Not everyday but in a firesale when the shareholders can delay sale and had nothing to lose (they went from a €90 million valuation to €5 million which is a fair drop). The person involved in the sale has stated that Siteserv had cashflow issues and that suppliers were getting very anxious as the only upside for them was getting paid but the downside was to lose everything. IBRC took the pragmatic decision to allow the DOB offer cash to get the shareholders acquiescence.
          So yes. It is normal in this type of position. Question – how experienced are you in rescuing insolvent companies that you can baldly declare this is Wrongdoing?

    1. Unreconstructed

      It’s not going nowhere. Story is slow burning but still an issue after weeks. This is not going away.

  4. Anne

    Michael Noonan hasn’t a scruple that was known. A proper fupping gowl as he’d be called in his home town.

    Taking the piss. Again.

    1. Aunty Social Media

      Michael Noonan…
      He talks so slowly that you feel like you’re always too far ahead of him or too far behind to be bothered listening anymore..
      -Then he finishes off, and you wonder if he actually said something or not.

      [Message to Limerick: Y’know, like Willie O’Dea?]
      [Message to Mayo: Y’know, like Enda Kenny]
      …etc.

      1. Barry

        Message to Limerick: Y’know, like Willie O’Dea?]

        Or eh, like Michael Noonan. He’s from Limerick.
        And you were coming across so clever below and all.

  5. B Hewson

    Sounds like a job for ‘super litigation lawyer’ to make a load of cash…
    Whether the government look into or not, KPMG have to look into and report publicly. If there is criminal behaviour suspected she should report to Gardai who would be obliged to act. Will be interesting though

    1. Sam

      “If there is criminal behaviour suspected she should report to Gardai who would be obliged to act.”

      Oh, now, c’mon… the Garda Siochana… going after millionaires?

  6. Jamie

    Er does this mean they paid €35 million for a company that had 3 contracts for €67million?? Sweet deal…

  7. Ferret McGruber

    Thank you Catherine Murphy. We should erect a statue to her. Then drop it on D.O.B’s head.

    1. Aunty Social Media

      The DOBster knows that the grip his sort have on the media is dwindling, day by day.
      The Internet is here to stay. (Accorrding to a bloke I know who knows all about this stuff.)

      But ol’ DOBby still wants his share of YOUR money.

      Just keep saying ‘NO!’.
      Don’t be bullied.

  8. nellyb

    It all sounds pathological. . Do people REALLY want these gilded bogs a la Mugabe?
    Is it what our finance minister buying his gold for?
    Nuts

    1. Aunty Social Media

      @ nellyb;
      :these gilded bogs a la Mugabe…:

      -If you’d simply asked ‘Is it what our finance minister buying his gold for?’ I’d have immediately said YES…
      …but you threw in that thing about Nuts at the end, and now I’m not sure you’re sober or sane

    1. Aunty Social Media

      Cool.
      I’m watching you now.
      I’m outside your house.
      I’m gonna make flipping sure that YOU vote.

      Think of me as a guardian angel, guiding you to the polling-booth.

      Sorry, not ‘think’, ‘Imagine’..

      Go deh!

      (I’m not outside your house. I’m inside mine.)

  9. Aunty Social Media

    I’m very disappointed that nobody picked up on the relevance of the link I attached to my name.

    Eh, Hello!..
    It’s the album by Yes called ‘The Yes Album’ {1971), and the first track is called ‘Yours is no disgrace’.

    Okay, it’s a load of bollocks. I’ll admit that.
    Everything Yes ever produced was.
    That’s why it sounded like someone was choking Jon Anderson all the time while he sang…Somebody WAS! (They just weren’t very good.)

    So anyway:
    YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, YES, …

    Oh yes.
    I thought it was clever.

  10. Aunty Social Media

    FFS Gaysheet.com, grow up!
    This is YOUR HOUR.
    -Be the website you CAN be, not the website you should’ve been.

    I’m as straight as two arrows that hit the same spot.
    I’m STILL doing everything I can.

    Human fupping rights, etc.

    I’ve had this argument in the past, with my Gay friends who didn’t believe the fight was worth fighting. They were wrong.
    The fight is over.

    They won.

    I’m here, ready to fight you on any other front that you chose.b Pick one.

  11. Martin McMahon

    When FG eventually sit down to do a post mortem on where it all went wrong, the answer is, was and shall always be DOB. When Labour sit down to do the same post mortem, the answer will be – sold out for a seat at the BIG table.

  12. Aunty Social Media

    Where are the Fighting Irish?

    I’m just gonna leave this here, with the lyrics posted underneath, just to confuse you:
    https://www.youtube.com/watch?v=ru33HtwH81g

    The bath clique
    Out of reach
    The bath clique
    Thank God
    Out of reach
    The women have skins of peach
    Old
    They’re making my bad dreams over
    The bath clique is out of reach
    Making my bad dreams over
    Stretches outside
    Stretches outside
    Extension magnifique
    On a beach
    On a beach
    And a street
    James Murphy is their chief
    They show their bollocks when they eat
    Commercial rate awaits
    For those who join clique
    And make their pledge
    And put their material
    In the …
    Awaits for you, awaits for all
    Join clique
    Make the pledge
    Within reach
    Within reach
    Within reach
    Bath clique in our reach
    Stretching outside
    Bath clique out of reach
    Stretches outside
    On a beach
    In a street
    J. Murphy is their chief
    A founder awaits
    For me, for all
    Who make a pledge
    To join
    Who join clique
    Bath clique awaits
    And make their pledge
    And make their pledge
    Bath clique
    And make their pledge
    Bath clique

    Good, wasn’t it?
    Play it again if you like, and vote YES as often as you can.
    Thanks.

    Play it again.

  13. Mr. T.

    Well done Catherine Murphy. Good detailed research, well presented which certainly leaves me in no doubt that we live in a country run by a little boys club, all acting outside international codes of conduct not to mention corporate law.

    Kenny is a fool. Nothing more than a front man for a cabal of shady dealers. Noonan runs the country along with his various corporate lunch dates.

  14. thedinger

    Seriously. I wouldn’t trust KPMG to make sure the balls in the Lotto were bouncing correctly. What an absolute balls. It’s all these ‘advisers’ that have bankrupt this country and still are riding it to this day. NO FUPPING SHAME.

  15. thedinger

    Seriously. I wouldn’t trust KPMG to make sure the balls in the Lotto were bouncing correctly. What an absolute balls. All these so called ‘ advisers’ have ridden this country and continue to do so! NO SHAME

  16. ahjayzis

    Murphy is really impressive. I can’t see a party TD ever rising above the squabbling and politicking to actually do this level of representation. She rocks.

  17. bobsyerauntie

    Fine Gael are just as corrupt as Fianna Fail..
    If the Garda Scandal, this Scandal, and the numerous other scandals that have plagued this government don’t bring them down, then I sure as hell hope that Irish Water will..

  18. Praetorian.

    There is someone somewhere…sitting in the shadows,having been or about to be shafted for something that has absolutley nothing to do with any of this.
    But this one person knows the one thing…the one date…the one name that will bring Edna,Mick,Dinny,Joanie…bring them all down.
    Hell hath no fury as a civil servant scorned.

Comments are closed.