Tag Archives: Siteserv

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Patrick McKillen at the high courtCm15ekxXEAAkYgf-1

From top: Denis O’Brien, Paddy McKillen and Catherine Murphy

Update:


Via Tom Lyons

Soc Dem founder Catherine Murphy made  fresh claims about Denis O’Brien’s involvement   with IBRC this morning during a debate on the second stage of the Commission of Investigation (IBRC) Bill 2016.

This is the Cregan investigation into certain transactions within IBRC, including the sale of Siteserv to Denis O’Brien.

Ms Murphy told the Dáil:

“I am relieved that we are finally at a place where we can begin the process by introducing this legislation. The thought crossed my mind this morning when it took so long to get a quorum that it had been stymied at every opportunity, and I wondered. I am not prone to conspiracy theories and I can tell the Minister of State how relieved I am that we ended up getting a quorum when it arrived after 11.10.

The commission had been fraught with problems. The majority arose because this, in reality, is the first investigation that has dealt with financial and banking matters under the 2004 legislation and it has been different from inquiries that have happened under that legislation to date. Given the turmoil of recent years, I doubt it is likely to be the last of this kind of inquiry.

It is bespoke legislation but at least it is charting a way. Upon reading the legislation, it is not quite clear to whom the final report will be made available. I note in the comments of the Minister of State, Deputy Stanton, that persons will have sight of it if they are mentioned in it, but whom will it be delivered to at the end of the day? Maybe that could be clarified because we need some degree of certainty on that at this stage.

It is just over a year since I stood in this Chamber and raised issues that I still believe were in the public interest – a complex web of cosy relationships, outrageous financial dealings and convenient transactions that benefited some far more than others, all at the expense of ordinary citizens.

The public interest element of the investigation is without question. IBRC was a bank that the people never wanted and yet well in excess of €30 billion of citizens’ money was pumped into the institutions formerly known as Anglo Irish Bank and Irish Nationwide Building Society that then combined to become IBRC.

Citizens have a right to understand why they are shouldering the burden of bank debts while some individuals appear to be doing very well from the purchase of distressed assets from IBRC. It became even more worrying when it transpired that Siteserv, a distressed asset that went on to win some lucrative water meter contracts, was purchased in highly irregular circumstances from IBRC.

The information I got from a freedom of information request was that the Department of Finance had deep concerns about that. From the bits that are not redacted, it indicates that the reputation of IBRC and, by extension, the State is vulnerable due to the approach taken by the bank on these matters, and that the processes of IBRC should be beyond challenge in order to protect it. There was clear concern in the Department about it.

AIB, which is 99% State-owned, lent the individual the money to buy Siteserv. That is our bank, which would not lend to businesses, yet it provided the money to buy Siteserv, an asset owned by the State. When the loan was granted to that person, he owed the State significant sums of money already. We sold Siteserv to that person for less than it appears to have been worth. Why would we not ask questions about that?

We did it when others told us they were prepared to pay more for the asset from their own resources rather than a loan from one of our banks. We know trade buyers were excluded, so we did not properly test what could have come in. As we know, there was a write-off of €119 million, with €5 million going to the directors of what was essentially a failed company in terms of the amount of money available.

My pursuit of the questions surrounding such an irregular transaction culminated in my making a speech in this House approximately a year ago that created a furore I could not really have envisaged.

I was attacked by powerful interests using media outlets that were afraid of the power wielded by this individual.

On one occasion my reputation was rescued by Deputy Micheál Martin because a presenter did not intervene. It took me by surprise; the legal issue is thrown over news stories very often when they involve very wealthy individuals, but it is not done in the same way for other people. I noted that at the time.

I have since discovered a whole other world that I did not know existed. A journalist contacted me on the false premise that he was writing an article and I took him at face value. He made an appointment to come to the Oireachtas for a meeting, but the sole purpose of it was to try to find out the sources of my information.

He is Mr. Mark Hollingsworth.

He did not get the sources but it appeared to be more of an inquisition than an interview. That kind of world, which I did not know existed, is there bubbling under the surface. We must be conscious of that.

My staff and I were put under immense pressure, but at all times I felt the support of the public, and people went out of their way to e-mail me, call me, stop me in the street and encourage me to continue to ask the questions that they wanted to be asked. They were obvious to very many people. I continue to have people on a constant basis saying it to me, even at this stage.

There can be no denying there is a disconnect between citizens and politics. Mistrust and the impression of “them and us” has damaged the relationship, exposing issues of concern. There should be an insistence on transparency and accountability, along with a pledge to uphold both. That is the only way we can restore trust in both the political and public life in Ireland.

Legislation being introduced today is a significant part of the process, but it is only one element. The Minister of State mentioned terms of reference and I hope we will see them in the next week, as they are important. It is essential to put in a modular fashion how this will proceed. Looking at the first, second and third interim reports, substantial work has been done by the judge in preparing for the inquiry, narrowing the issue and concentrating on Siteserv as the first element in the modular approach. This should be in place by the time the Dáil goes into recess.

The terms of reference have shifted substantially already, focusing on transactions initially above €100 million and, subsequently, transactions of over €10 million. Considering the amount of material that the judge has gone through at this stage with one transaction, I agree that in hindsight we underestimated the task involved.

It is important that we narrow it and do one good piece of work before going back to see what else is needed. The Dáil will manage that. It is important to investigate the transactions accounting for substantial sums of money.

There are also instances where the sum involved may be relatively insignificant overall but the context would provide an understanding of key relationships, which would be a vital component of the larger investigation. For example, in 2012, the then heavily indebted developer Paddy McKillen sought a bridging loan of just €5 million from IBRC when he had a cashflow problem following his unsuccessful litigation against the Barclay brothers.

As part of that process, Richard Woodhouse, a man connected with the Siteserv sale, and Mr. O’Brien advised members of the IBRC, including Mr. Aynsley and Tom Hunerson – people connected directly with the Siteserv deal – that Mr. O’Brien would provide IBRC with a guarantee of €5 million to support the loan for Mr. McKillen.

Astoundingly, despite serious concerns from some about Mr. McKillen’s ability to repay the amounts he owed IBRC – far in excess of €5 million – the bridging facility was granted. Essentially, a man with huge debts to IBRC was granted a loan from the IBRC on the guarantee of another man who owed significant sums to IBRC while there were questions over both men’s financial ability to fulfil original loan agreements with IBRC.

Those making the decision were directly connected with the Siteserv deal and other transactions. Some of the larger transactions, such as those in excess of €10 million or €100 million, may be more straightforward than some of the smaller transactions that could give us some sort of better understanding of the relationships in the bank.

I also have a question on the provision of the loan by AIB, the bank that is 99% owned by the State, when the business sector in the country was screaming that it could not get credit just to get staff paid.

The loan was paid to Mr. O’Brien to help facilitate the purchase of Siteserv. It is interesting to note that the AIB group chief credit officer at the time the loan was advanced went on after leaving AIB to join the boards of Siteserv, Topaz and the Beacon Hospital, all owned by Mr. Denis O’Brien. Why was that? My point has always been that, while there may be perfectly legitimate answers to these questions, they stand out as very obvious questions to ask.

An element of this legislation that I called for and which appears to be absent is a section dealing with the Irish Stock Exchange. There is one aspect of the stock exchange that I want to mention. In the course of trying to untangle some of the curious share dealings surround the sale of Siteserv, it proved wholly ineffective in maintaining any form of watchdog capacity or general oversight. The Minister of State referred to a portion of the Bill dealing with confidentiality with respect to the provision of information by the stock exchange. Deputy Calleary and I have made this point.

There was a big spike in the share dealings before it was publicly known that this company was going to be sold. I wrote to the Irish Stock Exchange and it stated it does not possess details of individual dealings regarding nominee accounts, so it did not have the information.

Then I wrote to the Office of the Director of Corporate Enforcement and it stated there was no indication at the time of reply that any issues arose that came within the remit of that office.

I wrote back to the Office of the Director of Corporate Enforcement and then I wrote to the Central Bank, which stated it does not hold details of the beneficial owners of the nominee accounts holding shares.

We wonder why prosecutions are not taken in relation to insider trading but if nobody is holding anybody to account or has the function to do that, how can it happen? We should not have legislation if we have not got the means of enforcing it and we need to do far more in respect of the stock exchange and of share dealings.

In every situation there must be a system of checks and balances and a significant one must be the ability of the media to report news. It became increasingly obvious during all of this that we had a major problem with both the ownership of our media and our defamation laws.

Not having a functioning media may well be a contributory factor in future inquiries, where that role should properly be played by the media in scrutinising and holding to account in the same way as we in the Opposition are expected to hold the Government to account. It is the checks and balances in the system.

There can be no doubt that the chilling effect of powerful individuals is a problem in this country and certainly it has appeared to be the case that the thicker the wallet the thinner the skin. Our defamation laws, as they stand, allow that to be the case. Aside from the chilling effect, there is also very real concern regarding media ownership.

When an individual is able, as Fintan O’Toole wrote, to accumulate “excessive private power” which has “an impact on the public realm of democracy” one knows there is a problem with the system controls that are in place.

We saw the work, for example, that was done quite recently by the “Prime Time” investigations unit regarding Console. That was a very good piece of work, but even an adverse or a satirical comment will invariably produce a writ to RTE.

Then we wonder why we do not see programmes by the likes of “Prime Time” about particular individuals, whether or not about this particular topic. That definitely has to be questioned. This is why the National Union of Journalists is calling for the establishment of a commission on the future of the media in Ireland. We should not just heed that call, we must commit to providing for that to happen as a matter of urgency. We have to get those checks and balances back into the system and the media are one element of that.

We also need a discussion regarding why the media mergers guidelines are not retrospective. Where there have been similar concerns about other sectors that have an over-dominance in the market, steps were taken. The one I am thinking of, which was very obvious, was the situation regarding Ryanair and Aer Lingus, where Ryanair was told it was over-dominant in a particular market – between Stansted and Dublin, I think. It was ordered to sell some of that, if not all of it.

Why is it that one sector is looked at and another sector that is just as important, if not more so, is not considered in the same way? While I am pleased to welcome the Bill and I look forward to the work finally progressing in a meaningful way, I regret that it is necessary to use legislation to force some of the parties involved to make the relevant documents and information available to Mr. Justice Brian Cregan in a way that overcomes the privilege and confidentiality issues asserted by some of those involved.

I am pleased that Siteserv will be prioritised as I believe it to be the issue of primary concern to the public and I believe it will act as a bellwether for other transactions that require serious questioning and analysis, including the controversial Topaz deal and the worrying circumstances surrounding the Blackstone transaction.

Much of this has taken me to places I would not look at. Blackstone would not normally be on my radar, but I had a look at their website. There is a section within the company that deals with tactical opportunities, which they call “Tac Opps”. It is a bit eye-opening.

This section is, by its own description:

“an opportunistic investing platform seeking to capitalize on global investment opportunities that are time-sensitive, complex, or in dislocated markets where we believe risk is fundamentally mispriced”.

We have a situation where one of the leading investment companies in the world, with the proud objective of capitalising on distress, was employed to advise IBRC, without any procurement or any competition from others, on the sale price of the assets.

It went on to be allowed, astonishingly, to buy some of the assets it had priced itself. That is one of the issues the Department of Finance officials were concerned about and it is one of the major transactions they highlighted in the FOI information.

The internal documents from the Department of Finance discuss concern about the ‘poor quality of decisions’ taken.

That language is terribly tame, but I suppose it is the kind of thing one puts into official documents that will be read at some point.

I would have said something a little more extreme, but I will not say it in here. This was stated in respect of transactions such as Siteserv and Blackstone. The officials themselves seem to be extremely unhappy.

Situations such as these raise questions for any right-minded person looking at them. It is my job, and the job of those in the Opposition, to hold the Government to account, as a representative of the citizens, to look at these things and to ask questions.

The public expects and deserves that those questions are asked. In respect of the point that was made about the Irish Nationwide mortgage-holders, what has gone on there is an absolute disgrace.

The web that was outlined by my colleague, Deputy Donnelly, yesterday in respect of even the avoidance of tax is unbelievable, but the real concern should be those people who took out a mortgage in good faith with Irish Nationwide Building Society.

Some of the mortgages were performing and some of them were distressed, but some of the distressed mortgages could have been serviced if there had been even a small discount.

We are not just going to end up with this company running big profits out of all of this but the State will end up having to house some of the people who will, inevitably, lose their homes as well.

The whole thing does not make sense.

I listened to Deputy [Joan] Burton talking this morning about the great work that had been done in dealing with the promissory notes that were turned into sovereign debt on the night IBRC was liquidated.

It was as if we should be thankful to them for doing all this hard work, that they sorted it all out.

The promise the Labour Party actually made was that it would be dealt with. It was “Frankfurt’s way or Labour’s way” and the impression was given that the debt would be written off. That was a legitimate expectation that people had.

We should continue to challenge the very idea that this debt is still there. The promissory notes were turned into sovereign debt and there was a restructuring of the repayment schedule but not one solitary penny of it was written off.

Some €2 billion was borrowed and extinguished in the Central Bank to take it out of the economy. This was last year but there is a schedule of payments up to 2030 to repay an odious debt, with which we should never have been lumbered. We should not lose any opportunity to restate that point.

I wish Mr. Justice Brian Cregan well on the work ahead. I know he has done a lot of work in preparing for this and I have read each of his interim reports with great interest. It is right to narrow this down and it is critically important that we have the terms of reference before the Dáil goes into recess.

Both these things are required for the judge to proceed with his inquiry in the fullest way possible.”

Meanwhile…

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Anti-Austerity Alliance-People Before Profit TD Richard Boyd Barrett

Anti-Austerity Alliance-People Before Profit TD Richard Boyd Barrett TD spoke during the debate.

Mr Boyd Barrett began by admitting he hadn’t heard Social Democrats TD Stephen Donnelly’s speech about US investment firm, Mars Capital yesterday, and the pending eviction of a family from their home in Kilkenny.

However, Mr Boyd Barrett said:

“A woman emailed me previously about her engagement with the financial institution that used to be Irish Nationwide and then became IBRC and the mortgage, the mortgage they had. And I think it’s sort of telling, in a way, what’s at stake in all of this. I’ll just read out a little of what the person says. She says:

I am an IBRC mortgage holder with a performing, just about so far, loan, that has just been sold to Mars Capital No.3 Limited, an unregulated fund. I stood outside the Dáil with other mortgage holders, trying to get this government to see sense but no, Michael Noonan had no regard for me or any ordinary person caught up in its liquidation of IBRC. So I wanted to know: who will I be dealing with. Who is Mars Capital No.3 Limited?

I did some research on cro.ie and discovered that Mars Capital No. 3 Limited had, until January the 15th, two directors – one of whom had the same name as a person who held a senior position in IBRC in the past. And was also, in the past, an employee of KPMG, the firm of liquidators. That surprised me. But I am an ordinary person who isn’t used to looking at company documents.

In recent days, that director stood down and another is appointed per new documents, lodged with the CRO. The other fact I discovered is that that company has three shareholders, all of them charitable trusts. Which I Googled and are associated, I think, with a Dublin legal firm. They are named Badb – I don’t even know how to pronounce this – Medb and Eurydice. What in the name of god has a charity to do with it? Who would use charitable trusts? Why use charitable trusts? Who owns my loan? I am still none the wiser. I believe this has to be examined.

Why hide behind charitable trusts? I took out my loan with a building society, not a charity. I stand to be corrected but the charitable trusts concerned may have been in the news in the past. I think I am at least entitled to know who owns my loan, considering my Government has done the selling.”

“And just to inform people, if they don’t know, the charitable trusts were owned by Ireland’s biggest, corporate tax firm, Matheson, who indeed have been in the news. Because Matheson were using these three companies to essentially help international hedge funds avoid tax.”

Something that the Central Bank has reported on, the use of these charitable trusts which are, apparently, registered to relieve poverty and distress. But they what they actually do is help hedge funds and banks pay billions less in tax on, in the area of high-risk assets. The Central Bank has warned, has done some reporting, saying these structures are potentially extremely dangerous because we don’t really know anything about them.”

“Now to me this just say everything about the web of connections between corporate accountancy firms, about the financial institutions that we bailed out, handing over the mortgages of ordinary people to these vultures engaged in aggressive tax avoidance. And then, on the other hand, that same institution writes off… This person doesn’t get a write-off, they don’t get a discount, they don’t even know who now owns their loan. We discover that the people who own the loan are a legal firm assisting people in tax evasion, or tax avoidance, sorry, I have to use the technically correct term.”

“But this same institution can write off €119million to the benefit of the richest man in Ireland, Mr Denis O’Brien, who is not tax resident in this country. Apparently, he doesn’t live here, although his kids go to school here and he has a yacht in Roundstone, Co. Galway and so on.”

“And if you say these things, as some of us did, Deputy [Catherine] Murphy, I did myself. I had the privilege of receiving a letter in, I think it was in the middle of 2012, when I made some of these points, and suggested that maybe the mafia would have something to learn from some of the dealings of the rich in this country. I received a letter from Denis O’Brien, castigating me for abusing my Dáil position with a thinly-veiled warning that I better stop doing it. That’s what goes on.”

“So you have ordinary people, like that woman who writes to me, and thousands and thousands of other mortgage holders, some of whom lost their homes, many of whom are certainly screwed to the wall, in terms of unsustainable mortgage payments and so on. And then all the devastating consequences that went beyond that, what was it, €32 or €34billion went into, into Anglo Irish, €64billion in total, all the devastation, wrecked the lives of ordinary people and then you have this stuff going on where tax refugees like Denis O’Brien benefit to this tune.”

And eh, what was the other write-off company he got? Oh, Independent [News and Media] newspapers, I forgot about them, also got a €100million written off, that he had a major shareholding in. God, he’s done well out of IBRC.”

Meanwhile…

Via Oireachtas.ie

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From top: Social Democrat TD Catherine Murphy and acting Taoiseach Enda Kenny in the Dáil yesterday

You may recall the publication of the Second Interim Report of the Commission of Investigation (Irish Bank Resolution Corporation) at 9pm last Friday evening before the May Bank Holiday weekend began.

This was two weeks after Justice Brian Cregan completed the 29-page report which has been beset by issues of confidentiality.

The report noted that the Commission has so far cost €3,663,998 – including €631,000 for its own salaries, legal costs, rent, building overheads, services and administration costs;  €2,786,998 for  the special liquidator of IBRC (KPMG); and €246,000 for the Department of Finance for its ‘external legal costs’.

Further to this…

Social Democrat TD Catherine Murphy raised the matter in the Dáil

Catherine Murphy:“… I raised an issue last week at the Whips’ meeting about the Cregan inquiry which reported to the Taoiseach on 15 April. It was published last Friday night and I understand there is an extension of time again. The Taoiseach needs to give some clarity on where this inquiry is going because it requires legislation on both privilege and confidentiality if it is to proceed. The judge could not have been clearer on what is required.

“The Taoiseach needs to outline what direction this inquiry is taking. Will it be something that is just constantly stretched out? Every week it continues it involves costs to do its work. It is absolutely essential that clarity is given on whether legislation will be produced in those two areas and if there a prospect of a conclusion to it.”

“A debate on the report is also needed in the House. It is the second interim report, which pretty much reinforces the point which was made last November, that legislation is needed if the inquiry is to proceed to a conclusion for public consumption.”

Enda Kenny: “… In regard to Deputy Catherine Murphy’s question on the Cregan interim report, the report was cleared at Cabinet last week. Believe me, there was nothing sinister in the fact that it was published on the Friday of what happened to be a bank holiday weekend.”

“I know that is always the story – that one is trying to ensure it is not seen. Let me put it this way. I can tell Deputy Murphy that I have looked at this and have given it a two-month extension. Mr. Justice Cregan has pointed out a number of challenges. Some of them are legal and some of them are constitutional, but there are a number of options to be considered.”

I would be happy to accommodate Deputy Murphy with a meeting either today or tomorrow to let her have the up-to-date, accurate range of those opinions, which include the possibility of a full-blown public inquiry.”

“When we consider that the Moriarty tribunal ran for 13 years at a very costly sum to the taxpayer, these are options that need to be considered. I will facilitate Deputy Murphy and anyone else and bring them up to date on where it now stands arising from Mr. Justice Cregan’s interim report.”

Transcript via Oireachtas.ie

The second interim report can be read here

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A letter sent from former IBRC chairman Alan Dukes to Finance Minister Michael Noonan on February 14, 2013 

You may recall how Mr Justice Brian Cregan was appointed to carry out a Commission of Investigation into IBRC on June 16, 2015.

One of the terms of reference is “whether the Minister for Finance or his Department was kept informed where appropriate in respect of the transactions concerned, and whether he, or officials on his behalf, took appropriate steps in respect of the information provided to them.”

The commission’s establishment followed Social Democrat TD Catherine Murphy asking Finance Minister Michael Noonan questions about the sale of Siteserv to a company owned by Denis O’Brien.

Further to this.

The former chairman of IBRC Alan Dukes sent a letter to Finance Minister Michael Noonan on February 14, 2013 – a week after IBRC went into liquidation.

This letter was obtained from the Department of Finance by Ms Murphy, following a Freedom of Information request.

Readers will note there were three sentences redacted in the letter of February 14, 2013.

Following an appeal to the Information Commissioner, the commissioner annulled the decision of the department to redact these sentences.

It found the manner in which the Department had processed the request “most unsatisfactory” and not in keeping with the statutory provisions of the Freedom of Information Act.

Further to this, Justine McCarthy, in yesterday’s Sunday Times, reported:

The Sunday Times has established that the three missing sentences from Dukes’s letter are:

“1. The Department of Finance has at all times been provided with all papers presented to the board;

2. The Department of Finance has been entitled to have an observer at every meeting of the board;

3. The minutes of all committee meetings were systematically provided to the Department of Finance.”

…The ruling by Stephen Rafferty, an investigator in the information commissioner’s office, was made on February 8 but only made public last Thursday. The department has until March 1 to lodge an appeal to the High Court.

…When told what the redacted portion of Dukes’s letter says, Murphy replied: “It’s strange the department would have redacted that. It obviously gives a clue about something. There seems to be a surprisingly small amount of information [available] about the relationship between the department and the bank, given how bad we know that relationship was.

The information commissioner was quite scathing about the department and the fact they are taking their time about whether they’ll release it or lodge an appeal indicates there is not a culture of openness there.”

Anyone?

Revealed: Hidden claims over IBRC liquidation (Justine McCarthy, Sunday Times)

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Ah here.

An email from Denis O’Brien to Des Carville at the Department of Finance, obtained by journalist Gavin Sheridan, under the Freedom of Information Act

You may recall how the sale of Siteserv to Denis O’Brien’s Isle-of-Man-based acquisition vehicle Millington in March 2012 came after Davy Stockbrokers and KPMG were tasked with finding a buyer by a subcommittee of the Siteserv board.

Des Carville was the Davy adviser to Siteserv during the sale. Mr Carville previously helped Davy to advise Mr O’Brien on deals involving Esat.

Some 18 months after the sale of Siteserv, in November 2013, Mr Carville, a former KPMG employee, joined the Department of Finance as Head of its Shareholder Management Unit.

Denis O’Brien’s email to Des Carville (The Story, Gavin Sheridan)

Meanwhile, separately, in yesterday’s Sunday Times, Brian Carey wrote:

“For all the world, the inquiry into loan write-offs at IBRC looks like it was built to collapse: the towering edifice, the flimsy foundation, the complex material, the entirely infeasible completion deadline.”

“It ran out of control well before it was due to begin. By estimating a duration of several years, judge Brian Cregan first rendered the whole prospect outrageous. It was the government’s decision to broaden the probe to 38 transactions and losses to the state bank of more than €10m. Now the government claims that an investigation could cost as much as a tribunal.”

There never were grounds for a probe of that scope, depth, length or expense, nor was one ever demanded. And so the public’s quest for truth runs aground in a legal quagmire of confidentiality , privilege and enormous expenses. How convenient.”

“There were only ever a handful of questions that begged answers in this affair. Did Denis O’Brien, the most powerful businessman in the country, receive preferential treatment in his dealings with IBRC? Was he unduly favoured in his purchase of Siteserv, a utilities service company which was heavily indebted to the bank? Did he get preferential rates of interest on his own personal borrowings?”

“… KPMG could review, as suggested by Cregan, the top 12 write-offs, provided once again there is no conflict of interest. It is the job of a liquidator to investigate the affairs of a bust company. As yet, the evidence is not there to justify a wide-ranging, lengthy and expensive judicial inquiry. Frankly the public should be aghast that one should take place without, at least, establishing a case for such a probe.”

By the same token, the Siteserv issue should not be buried with this administration. Right now, this looks like a manufactured botch job.”

IBRC loan inquiry risks being botched into oblivion (The Sunday Times)

Previously: Bringing The House Down

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Previously: Creatures Of The State

Set Up To Fail

Watch the proceedings live here

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siteserv

From top: Taoiseach Enda Kenny (second left) and  Attorney General Marie Whelan second right) at former Attorney General Declan Costello’s funeral; Siteserv logo.

Yesterday’s Sunday Business Post revealed that the Commission of investigation into transactions made during the wind up of Anglo Irish Bank, including the sale of Siteserv to Denis O’Brien, can not proceed.

Six months after its set up the commission says it does not have the powers to make a determination as to whether documents in the possession of the liquidators, KPMG, are “covered by legal and banking privilege”.

Concerned Citizen asks:

Are Fine Gael attempting to throw the Attorney General under the bus for giving poor advice?
And will the Attorney General say the problems were known from the outset but Fine Gael proceeded because they assumed a General Election would come first?

Anyone?

(RollingNews.ie)

HNmode07_2

A RoanKabin show home at the Modular Homes Display, East Wall Fire station, Dublin

Call for A Revolution in Ireland writes:

As you are aware, we have a housing crisis, caused by FG-Labour. Today they were showing off some “modular home“, basically prefabs [in Dublin yesterday]. These will solve the crisis, or so they tell us. These units cost around €100,000 each.

Well, guess who makes them? Denis O’Brien does. [Among the] companies building them is Roankabin, a division of SiteServ (the company installing water meters)….

Oh.

Call For A Revolution In Ireland (Facebook)

Thanks Marina O’Reilly

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Denis O’Brien and his often tangled web of influence.

In interactive form [see link below]

Come into his parlour.

Pat writes:

Irish Water, Denis O’Brien, Siteserv, GMC. Find it all here illustrated. You can Zoom in and out, click on the elements and discover more content in their description. Each connection (as much as possible ) contains information on the nature of the link to the element it is connected to. For any query please reach out on twitter to @beyourownreason

A Tangled Web: Irish Water, Denis O’Brien and Siteserv (BeYourOwnReason)

catherine

Catherine Murphy in the Dail this evening

During tonight’s debate on the Commission of Investigation into certain IBRC transactions, including the sale of Siteserv to Denis O’Brien…

When I met with the Minister yesterday I highlighted that my main concern would be that the investigation does not end on Prom [Promissory note] night and that it extends into the time when the IBRC was in liquidation.

There are many issues that straddle both time periods and it is vital that the investigation can properly follow these threads.

For example, the purchaser of Siteserv, was already significantly indebted to IBRC. We know that on the 7th of March 2013 – one month post liquidation – that he wrote to the special liquidator seeking to reschedule his outstanding loans over a further 3 year period.

We know that he claims to have been allowed a similar extension by virtue of a verbal agreement he claims he had with the CEO of IBRC (Mike Aynsley).

We also know that, according to IBRC, the credit committee had never approved such a previous agreement yet Mr O’Brien maintains it was in place and he requested that the special liquidator be made to honour that verbal agreement.

I wish the minister to clarify if the assertion of such a verbal agreement will be enough to satisfy the Terms of Reference regarding the ‘contractual obligations’ required in relation to investigating issues that straddle pre & post liquidation.

We know that the credit committee met on the 23rd of May 2013 – two months after Mr O’Brien’s approach to the special liquidator and at that time the outstanding balance owed to IBRC by Mr O’Brien was in the region of €325million.

It is worth, at this point, asking the question as to why someone, so heavily indebted, was allowed to make significant purchases from IBRC rather than being asked to pay down his outstanding loans. Were other bailed-out banks financing this buying exercise? Was he borrowing from Peter to pay Paul?

Interestingly, an article that appeared in the UK edition of the Sunday Times in January 2012 showed that in 2011 & 2012 the IBRC refinanced some of Mr O’Brien’s loans and increased their security stake in some of his investments. It seems illogical that in the same time period they allowed him to purchase Siteserv for example.

The point here is that some of the documents I am referring to relate to the Special Liquidators era hence the need for the period to be covered by the terms of reference.

In recent days, The Chairman of IBRC (Mr Dukes) has made much of the fact that the Central Bank conducted a review, prior to July 2012, and apparently found no problems.

Contradicting that assertion however is a relevant piece from the FOI documents from inside the Department when they said

“We are concerned that the Central Bank report compiled on the transaction vindicates their position. To be clear we are concerned with a number of the decisions taken by the bank in relation to this transaction.”

….Yet It was not until I received an FOI of July 2012 internal Dept memos did we learn that the Department officials were expressing serious concern over the effectiveness of the CEO and the management team and they had serious concerns over the way a number of large transactions, including the Siteserv sale had been handled.

….Another significant issue that raised its head in some of the early reporting of this controversy but has since been replaced by other developments is the share activity in Siteserv prior to its sale.

Various sources of information told me that the Siteserv share activity in November 2011 – the period during which the bidding process was underway – was irregular and that there had been a significant share spike around the time it was sold resulting in a nice windfall for some lucky investors.

Unfortunately it was indicated to me that some of those investors may not have been so much lucky as they were well-informed. Indeed the Chairman of IBRC confirmed in an RTÉ interview that Denis O’Brien for example, had been given advance notice of the sale before it was announced. Did others have similar information?

The unfortunate thing here is that while I know what insider trading is, I don’t yet know how we deal with it here in Ireland. On foot of my information regarding share activity, I wrote to the Irish Stock Exchange who advised me that it was not within their remit and that I should talk to the Central Bank.

I wrote to the Central Bank who told me it was outside of their remit. I then wrote to the Office of the Director of Corporate Enforcement whose reply came back today to tell me that it does not appear to come within the remit of their office.

….In my speech on May 28th I referred to loans held by Mr O’Brien that were due to be repaid in full in 2011 and 2012. We know they were not repaid in that timeframe.

Effectively, once the agreed term expired, those loans were in default and became callable on demand. IBRC’s own terms and conditions allowed them to charge default interest rates yet they chose not to do so in this case.

Many sources have come forward both before and since that speech, to say that they had personal experience of being both performing and non-performing borrowers of IBRC and their experience of their loans being called in, in a ruthless fashion and other defaulting borrowers talk of the punitive interest rates applied to them.

…..The plight of the former Irish Nationwide Mortgage holders and the way in which they have been treated by IBRC compared to the very favourable environment that seems to have been provided to Mr O’Brien for example is perhaps an indication.

Catherine Murphy, Independent TD for Kildare North

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