Tag Archives: Siteserv

joanburtonruth

Tanaiste Joan Burton and Socialist Party TD Ruth Coppinger in the Dail today

What guys?

Those guys.

I don’t see any guys.

Siteserv DOMINATED dáil proceedings today.

Justice minister Frances Fitzgerald has announced an independent inquiry to be set up independently by, cough, Michael Noonan.

Meanwhile Ruth Coppinger pressed Joan Burton on her depth of knowledge about the Siteserv transaction. To wit:

Ruth Coppinger: “The secretive sale of this company Tanaiste has been raised in this house, by the way, for years – on numerous occasions. Deputy Catherine Murphy has done us all a huge service and I commend her aswell for her work, she raised it before. Other deputies raised it to the Taoiseach and to the Minister for Finance. I raised it myself actually, in a Leaders’ Question, and had my mic switched off. Hope it won’t happen today.But, of course, Denis O’Brien is so well connected to Fine Gael, owns large swathes of the media, that it’s taken this long to get us this far. Now Tánaiste specifically, on the issue of Siteserv, and if your baying hounds could stop shouting over the deputies that are here. Can you please answer the following questions: Richard..”

[Bell rung]

Ceann Comhairle: “Sorry, order please”

Coppinger: “Richard Woodhouse, an alleged acquaintance of Denis O’Brien..”

Ceann Comhairle: “Sorry, deputy..”

Coppinger: “…who’s also..”

CC: “Sorry, deputy please, I, I, I just, I know…”

Coppinger: “Who’s also..”

CC: “Sorry, no, there are people’s names in the public, in the public arena but I don’t want people making accusations against people who aren’t [inaudible]…”

Coppinger: “These are facts, Cathaoirleach these are just facts. He was also the head of specialised asset recovery at IBRC and oversaw Denis O’Brien’s borrowings at IBRC. Brian Harvey, the CEO of Siteserv.”

[ At a press conference on Friday April 24 former IBRC chairman Alan Dukes said Mr Woodhouse was excluded from the Siteserv sale because he was “handling Mr O’Brien’s finances”]

CC: “Deputy…”

Coppinger: “Received a personal lump sum of €800,000, as a result of the sale to Millington, €800,000. Siteserv’s chairman…”

CC: “Please respect the rule I’m asking you, that’s what I’m putting to you today. OK, continue.”

Coppinger: “Yeah these are facts Cathaoirleach. Siteserv’s chairman Hugh Cooney was also obviously involved in the NTMA, Enterprise Ireland and reportedly also was on an American trip that the Taoiseach attended with Denis O’Brien and we know lawyers Arthur Cox represented both O’Brien and IBRC.”

CC: “Question please?”

Coppinger:”`But why Tanaiste was there no independent representation for the Irish taxpayer. Why was there no legal representation for the Irish taxpayer? The sale was processed we know by people with many connections to people in Siteserv, Davy and KPMG and, of course, the big question, why were other bidders making much larger offers not even considered?
For example, Tanaiste, can you comment that the only tender, and this is very important, that included a payment to directors was the Millington tender. Now if that’s the case why would it not be in the interest of shareholders to take that bid. And if it is true then this was obviously the company that was being positioned to get the water meter contract that’s going to be a license to print money, if you can force through the water charges. What other sweetheart deals took place or are happening and have happened recently at Anglo? From Fine Gael’s bankers? We’ve already heard about Topaz and Beacon Hospital, etc…”

Joan Burton: “I don’t know who they are.”

Jaykers.

Earlier: “The €5million Was An Essential Component”

Screengrabs via agenda.ie

00010732Alan Dukes attending the Moriarty Tribunal

In his evidence to the Tribunal on Day 285 (1 April 2004), Mr Alan Dukes described how he carried out his own investigation into the second mobile phone licence process following his appointment as Minister for Transport, Energy and Communications.

He stated that he discussed the matter with Senior Departmental Officials and examined the process which had been followed by the Department for the awarding of the licence, the criteria applied, the requirements to be fulfilled by the applicants, the evaluation methodology, the milestones to be observed in the process, the involvement of the external assessors, the composition and makeup of the project subcommittee involved in the evaluation process and how the winning applicant was ultimately chosen.

He told the Tribunal that following these discussions with those Senior Departmental Officials he had no doubt as to the integrity of the process. Importantly, Mr Dukes stated that this view had not changed having regard to all of the evidence that had been given to the Tribunal.

Good times.

Earlier: “The €5million Was An Essential Component”

What Did Alan Say In Evidence (MoriartyTribunal)

Meanwhile: UK company willing to fund action over Esat Digifone case (irish Times)

Thanks Eddie

Screen Shot 2015-04-23 at 01.44.09

Screen Shot 2015-04-23 at 01.44.50Finance Minister Michael Noonan on Six One last night.

Michael Noonan gave the government’s latest position on the Siteserv deal last night to Brian Dobson on RTÉ’s Six One News . An account which directly contradicts former IBRC chairman Alan Dukes’ recollection.

Grab a tay.

Brian Dobson: “This was a deal that, because of the write-off of the debt, it cost the taxpayer, the State, over €100million. It was one of many such deals, of course throughout that period. But it was one you raised concerns about in the aftermath, it seems, of the deal being done. Now, at what stage and why did you become concerned about this transaction?”

Michael Noonan: “Well, first of all, Anglo Irish Bank was a bit of a disaster, the taxpayers put in €34million, when Fianna Fail were in Government, and I saw my responsibility to protect the taxpayer and, if possible, to reduce the cost of servicing the €32billion and we did that with the promissory arrangements and then to recover as much as we possibly could. And I found that we didn’t have the kind of flow of information I would have now with AIB, for example, because the arrangement that my predecessor entered into didn’t require transactions to be notified and I was in the position of having to answer to the Dáil and of being unsure of the flow of information, even though there was regular meetings between IBRC and Finance officials.”

Dobson: “So in relation to Siteserv then, you were only aware of the transaction, the fact that €100m, over €100m of debt had been written off and that the company had subsequently been sold to a company controlled by Denis O’Brien in March 2012, I think it was, you only became aware of that after the event?”

Noonan: “Yeah, I got a PQ [Parliamentary Question] in April and then I got briefed on it but there was a series of concerns about the relationship between IBRC and the Department of Finance at the time. And I had a number of meetings and, at one meeting, I was extensively briefed on issues from renumeration to new appointments of directors, to senior management and the Siteserv issue was an issue of concern as well.”

Dobson: “So why were you left in the dark? Was it that you didn’t ask the right questions, you didn’t say to the people in charge of IBRC, ‘what’s going on here? keep me briefed?'”

Noonan: “No, it was the legal arrangement, when Anglo became IBRC, between the then minister and the authorities in IBRC was that they didn’t have to notify anything that was commercial. The idea was to keep the commercial decisions at a distance from the politicians.”

Dobson: “Right.”

Noonan: “Which is reasonable…”

Dobson: “Even though it was the taxpayers’ interest that was at stake here.”

Noonan: “It’s a reasonable thing to do but, you know, I found that I needed more information then I was getting automatically so I actually subsequently changed the framework so that they had to notify any transactions over €100million.”

Dobson: “What your officials were saying to you and they were expressing concerns about this deal at the time and what they were saying is that you should have gone to the chairman of the IBRC and said, ‘I want an independent review of this transaction’ to get to the bottom of what happened. You didn’t. Why not?”

Noonan: “Well, that was the essence of it, but really what it was was important meetings. I’d have a kind of a note to remind me of the main issues and, in that note, the advice was to put it to Alan Dukes, who was the chairman, to have an outside inquiry into the transaction. But in the course of the meeting, Alan Dukes told me that he had got the board of IBRC to do a full review and that the board had assured him, and he was assuring me, that what happened was in the best interest of the State and consequently of the taxpayer.”

Dobson: “But the board carrying out a review is very different to an independent review.”

Noonan: “Yes but to say you could review something if there was a possibility of changing anything but all transactions were complete. There was no legal possibility of a reversal and I trusted Alan Dukes.”

Dobson: “But presumably accountability is also important here. That people know what went on and why because there were aspects of this deal, your own officials raised questions about it, for example, that the shareholders in the company Siteserv, which was bust, were paid €5million.”

Noonan: “I had a meeting where Alan Dukes came in as chairman, Michael Aynsley came in as chief executive and we went through the issues and the conclusion of that was an assurance from the chairman, on behalf of the board, that everything was done properly and not only done properly but was the best result possible for the Irish taxpayers and that’s minuted. And I accepted that. Otherwise I’d have problems with allowing the board to continue. And…”

Dobson: “Did you get answers to the questions, for example, as to why some potential bidders were excluded from the process. I think one French company said they were willing to offer €60million for this company whereby it was sold for €45million.”

Noonan: “There was a series of allegations made before and after I had the meeting. But, in general terms, the deal was the deal and I was assured that the components of the deal were necessary to get the best result for the taxpayer and, you know, there was independent advice as well to the board of IBRC and they concluded the deal and…”

Dobson: “And the best deal for the taxpayer included €5million for the shareholders in a bust company?”

Noonan: “The view on that was that this was an essential component, or the advice was that the shareholders wouldn’t have concluded the deal otherwise and the longer it went on, the more the taxpayer were losing because the company was going downhill”

Dobson: “There are more documents, I think, to be released tomorrow [today] under Freedom of Information, we believe in the Irish Times. Will they address something else that’s referred to in the documents that had been released, that Siteserv wasn’t the only deal about which there was concern within your department?”

Noonan: “There was a lot of concerns about different issues and these will be recited in tomorrow’s, in tomorrow’s release, under Freedom of Information but everything that people are saying about Siteserv now were the issues that I was briefed on when I had a series of meetings and one in particular with the chairman and the chief executive of the company.”

Dobson: “OK well more to come on this…”

Noonan: “More to come tomorrow, yeah.”

Dobson: “Minister Noonan, thank you very much.”

Watch here

Yesterday: Throwing Alan Under The Bus

Previously: Siteserv on Broadsheet

90216693-1Screen Shot 2015-04-22 at 12.16.33

Former IBRC chief and FIne Gael leader Alan Dukes (top) and Enda Kenny in the Dail this morning taking siteserv questions from Sinn Féin President Gerry Adams.

You want Senior Hurling?

There you go now.

Earlier: Are You Satisfied?

Previously: Siteserv And The Bank That Liked To Say Yes

Contains Impurities

90377450

This morning.

Minister for Finance Michael Noonan at the Convention centre, Dublin this morning for a Ireland Strategic Investment Fund event overshadowed by questions over the Denis O’Brien/IBRC/ Siteserv deal.

Meanwhile…

Minister for Communications Alex White has said it is not for him to say whether there should be an inquiry into the IBRC sale of construction company Siteserv to a company owned by businessman Denis O’Brien.

Speaking on RTÉ’s Morning Ireland, Mr White said he had not had an opportunity to discuss information obtained through a Freedom of Information request with Minister for Finance Michael Noonan.

He noted that the bank itself and its former chairman Alan Dukes had said the best deal possible was obtained and he had no reason to disagree.

Noonan ‘satisfied’ with action he took over the SiteServ sale (Newstalk)

Minister unsure on inquiry into Siteserv sale (Newstalk)

(Sam Boal/Photocall Ireland)

      

Indefatigable North Kildare TD Catherine Murphy discusses the response received to a freedom of information request to the Department of Finance into the circumstances surrounding IBRC’s sale of Siteserv to Denis O’Brien owned Millington.

Just a little shady.

Ms Murphy TD sez:

“While the responses are heavily redacted, there are some key passages visible and they leave the reader in no doubt that there were serious problems in the relationship that existed between the IBRC – formerly Anglo, and the Department of Finance. Indeed at one point, the memo states that “…events over the past few months have led me to question the effectiveness of the management team in IBRC…I am concerned that the reputation of the IBRC and by extension the State has been damaged as a result of these events.”

Related:

Siteserv And The Bank That Liked To Say Yes

The Best Deal For The State

Siteserv For Sore Eyes

Sierra Where Would You get It?

Thicker Than Uisce: The Irish Water And Siteserv Timeline

Contains Impurities

Meanwhile…

Meanwhile…

9019085090218865
siteserv_slides-220x220

From top: Former IBRC chairmen Alan Dukes (left) and CEO Mike Aynsley in 2010, Denis O’Brien and Siteserv logo

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

Well. She’s received another reply.

But, first, to recap…

Siteserv – of water meter fame – was founded in 2004 by chief executive, Brian Harvey, with backing from Niall McFadden of Boundary Capital.

In October 2009, McFadden – who at that point owned 6.7% of Siteserv – quit Boundary, as he battled to repay loans to Anglo Irish Bank.

In March 2012, Denis O’Brien, who owed hundreds of millions of euro to Anglo, bought Siteserv for €45.4million from IBRC, formerly known as Anglo Irish Bank, while Siteserv owed Anglo €150million.

Arthur Cox represented both sides of the sale.

The sale involved IBRC writing off €100million of Siteserv’s debt, and the distribution of €5million to Siteserv’s shareholders, including Harvey, Chris Neate and John Neal, with Harvey remaining in the business.

At the time of the sale, the Sunday Business Post reported that Australian hedge fund Anchorage Capital had offered a higher price for the company.

It reported:

“Sources said that Australian hedge fund Anchorage Capital had put more money on the table, but elements of the offer were considered less attractive then the O’Brien bid. O’Brien was chosen as the preferred bidder, with Anchorage in second place. Some ten companies were involved in the initial bidding process. Sources said that some of the underbidders were unhappy with the sale process, although this is not uncommon. However, more than half of the shareholders have already voted in favour of the deal, which would suggest that it is a fait accompli. It is understood that the higher offer was made at a late stage in the sale process, which was handled by Davy Corporate Finance.

“As part of the deal with O’Brien, shareholders will get about €5million, but the rest will be used to satisfy debt owed to the Irish Bank Resolution Corporation, which was formerly Anglo Irish Bank. IBRC will have to take a hit of more than €100 million, as the bank had advanced more than €150 million in loans to the company. However, the deal needed to garner the support of shareholders, which is why there was a sweetener in the deal for investors.”

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

Ray Neilson, a senior manager with Altrad, told the Irish Times that he had emailed Harvey four times before the deal was agreed with O’Brien but that he was told the firm was not for sale – a claim Siteserv rejected.

Indeed, just a few weeks ago – following questions from Murphy – Siteserv released a statement saying:

“In terms of media comment concerning a competitor, Altrad Group, Sitserv PLC (in liquidation) said at the time of the transaction, that neither its board or its advisors ever received any formal approach or offer from Altrad prior to accepting the Millington offer and that any claims regarding a proposed formal or executable offer for Siteserv PLC were spurious and vexatious.”

Readers may wish to recall how, at an EGM of Siteserv – after its sale to Denis O’Brien and during which Altrad claimed it had offered €60million for Siteserv – Donal Donovan, of the Irish Independent reported:

“[Ray] Neilson claimed his firm should have been allowed to table an offer to buy Siteserv before bids for the company closed last month. The Altrad representative said his firm made an initial approach to Sitserv chief Brian Harvey back in September, but only learned of the planned sale of the company once the process ended in March. He questioned whether the board was aware of the French interest and claimed Altrad’s offer could be worth 33pc more than the bid accepted by the board.”

“CEO [Brian] Harvey confirmed he had received a number of approaches from Altrad executives in the run-up to the sale, but that they had been informal and vague. No offer to buy the business had been put to him. Mr Cooney said an approach from Altrad had only been made on Tuesday, after the EGM to vote on the sale of Sitserv had been called. He said the Altrad approach was non-binding and indicative.”

A few weeks ago, in another reply to Murphy, Noonan revealed that there were concerns raised about the Siteserv deal.

He said:

“Through this review, Department of Finance officials were made aware of certain aspects of the transaction which raised concerns with the quality of some of the decisions taken in respect of this transaction, including, among others, that legal advisors to the company referred to in the question had also acted for the purchaser, that a payment had been paid to the shareholders of the company referred to in the question, that some of those shareholders were members of the Board of the company referred to in the question and that a significant proportion of those shareholders appeared to be clients of the financial advisor on the transaction to the company referred to in the question.”

Further to this, Ms Murphy asked the Minister for Finance  for specific details surrounding the bidding that led up to the sale of Siteserv – to essentially find out why Millington won the bid.

Mr Noonan said that, following a meeting about the sale in May 2012, and a further review of the sale in June 2012, another meeting was held on July 25, 2012, between him, his officials,  IBRC’s chairman, former Fine Gael leader Alan Dukes, and IBRC’s CEO, Mike Aynsley.

In the meeting, Noonan’s officials raised a number of concerns with IBRC. Their concerns included:

“…the decision to allow the sale process to be held by advisors of Siteserv, the bidding process, entering into exclusivity with one of the bidders and the decision to exclude trade buyers.”

Mr Noonan also revealed that yet another meeting was held in August 2012 between the former secretary general of the department of finance, John Moran, and Aynsley, at which point, “the transaction had been concluded and no further action could have been taken”.

You may recall that last December, Mr Noonan stated that 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.”

This was Ms Murphy’s latest question:

“To ask the Minister for Finance in respect of the departmental review of the sale of Siteserv to Millington by the Irish Bank Resolution Corporation, the process that resulted in him being convinced that the sale amounted to the best outcome for the State; if he and his officials looked at both rounds of bids; if so, the number and name of the companies that made bids in the first round; the place in the hierarchy Millington fell; the number of those bids that went forward to the second round; the criteria for moving to the second round; the place Millington, the winning bid, fell in the hierarchy in terms of the amounts bid; if the tender process was uniform for all bidders; if not, the reason for same; if not, the way the bids were ranked; and if he will make a statement on the matter.”

Michael Noonan’s responded yesterday:

“I am advised that, on foot of 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. At this meeting, IBRC officials explained how the sale process was conducted, from the selection of the original 50 candidates through to the 8 bids ultimately submitted and the selection of the winning bidder [Denis O’Brien’s Isle of Man vehicle Millington].”

“Following this review, a further meeting was held on 25 July 2012, which I attended along with officials from my department and the chairman [former Fine Gael lead Alan Dukes] and CEO [Mike Aynsley] of IBRC.

At this meeting, the transaction referred to in the question was discussed further, along with a number of other topics. I can confirm that at this meeting, 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 Siteserv, including the decision to allow the sale process to be held by advisors of Siteserv, the bidding process, entering into exclusivity with one of the bidders and the decision to exclude trade buyers.

It was at this meeting that senior management of IBRC confirmed to me that the transaction involving the sale of Siteserv 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.

A further meeting between the former secretary general of the department of finance, John Moran, and the then CEO [Mike Aynsley] of IBRC took place in August 2012 at which this matter was also further discussed. A that point, the transaction had been concluded and no further action could have been taken”

“Notwithstanding the fact that a new Relationship Framework had been put in place, it was decided (following the meeting with John Moran and the then CEO of IBRC [Aynsley] in August 2012) that a senior department of finance official would be seconded to IBRC to explore opportunities for deleveraging with a view to maximising the recovery for the taxpayer.

This had the additional benefit of providing greater oversight while supporting the management team. The secondment of Neil Ryan to IBRC commenced shortly after.’

There you go now.

Previously: ‘The Best Deal For The State’

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

(Photocall Ireland)

Thanks Catherine Murphy

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

catherinemurphy

siteserv-sean-corkery-03Catherine Muprhy (top) and Sean Corkery, CEO of Siteserv (above)

Bless.

Further to growing concern regarding the purchase of the company responsible for the installation of water meters in Ireland.

Sean Corkery, CEO of Siteserv, the business bought by Denis O’Brien from IRBC with a €100 million write off that was subsequently awarded the meter contract, went on Morning Ireland to help clear up some outstanding matters to presenter Gavin Jennings.

Grab a hot tay.

Gavin Jennings: “If you’ve had a water meter installed outside your home in Dublin or the Midlands South East or the North West it’s likely that it was done by a company called GMC Sierra, it’s a subsidiary of Siteserv, a company which was bought three years ago by a company owned by businessman Denis O’Brien called Millington.
At the time it owned, owed rather, €150 million to IBRC, Anglo-Irish Bank. And when it was bought, for €50million , the other €100 million Euro of debt was written off, in other words the State, or the taxpayer, took the hit. Now, the Minister for Finance says his Department looked into the deal, and IBRC’s role in it, and that its officials, to quote, were made aware of certain aspects which raised concerns with some of the quality of some of the decisions, that the same law firm, Arthur Cox, acted for both buyer and seller, and that Siteserv shareholders were paid, but, that he was assured by IBRC that the deal was managed to get the best result for the country. Michael Noonan was responding to Dail questions from Independent TD Catherine Murphy, whom we talked to earlier. The Chief Executive of Siteserv, Sean Corkery, is on the phone now. Sean, good morning to you.”

Sean Corkery: “Good morning Gavin. Thank you for having me on. I’m pleased to clarify any misunderstandings on this.”

Jennings: “You issued a statement yesterday in response to [North Kildare TD] Catherine Murphy’s response to Michael Noonan. Again, you defended the deal as being best practice and above board. If it was above board, how come when the Department of Finance, when they came looking, found certain aspects which raised concerns with the quality of some of the decisions made?”

Corkery: “Well first, you know, it was the Minister who looked into it, he said it was above board, done best for the taxpayer, what he said yesterday in his statement was that, I’m getting, I’m getting a little bit fed up of the constant questioning from Catherine Murphy in the sense that it’s the same question, I think she knows what the answer is in that it is that everything was completely above board and I’m trying to run a company I’m the CEO of that company, when statements are made that are untrue they affect, you know, customers, suppliers and employees. So what was said yesterday was that the Minister looked into it, there was one or two issues that he raised, one was around the same legal company and I think the other was around the payment to the shareholders, and he said that having checked it out everything was above board. I should say further that, listening here this morning, the payment made to the shareholders were of course the shareholders of Siteserv plc.”

Jennings: “Yes.”

Corkery: “And nothing to do with the purchasing entity, which is Millington, which is a company which is owned by Denis O’Brien.”

Jennings: “Okay, can I ask you about some of those concerns which were raised. Why was the same law firm used by both the seller and the buyer and how is that not a conflict of interest?”

Corkery: “Well, I don’t know exactly why, but I’ve come across it myself a number of times where two companies that have nothing to do with one another could be using the same legal company, they end up one purchasing the other or having some kind of a relationship and legal firms are quite familiar with dealing with that and they have, you know, a different professional dealing with the two different companies and obviously there are very clear guidelines and Chinese walls as the Minister mentioned yesterday. It wouldn’t be unusual…”

Jennings: “But can you explain to me, I don’t understand and I’m sure a lot of our listeners don’t understand, what are Chinese walls in these situations…”

Corkery: “Chinese walls are, you know, the legal firm, absolutely committing on a professional basis that information doesn’t pass between the professional dealing with one company and the professional dealing with the other, irrespective of the fact that they might be employed by the same legal firm. I think something like that makes a headline and for somebody listening in this morning they might say, oh that’s unusual, maybe there’s something to that, I would say if you check out a lot of corporate legal firms it’s quite, usual but in any case I mean, we weren’t there at the time, we were the company who came in to purchase the company, we had our legal firm they were, they had theirs it turns out it was the same legal firm, but the point there I wanna make is that this company, it was doing very badly, it ran up a huge debt based on accumulated losses and the IBRC discounted the company and put it up for sale, a lot of people looked at it, everybody was, you know, offered the same price and the same discount and the entrepreneur Denis O’Brien came along and took the risk on it, and it was a risk, I came in from multinational companies and I can tell you…”

Jennings: “ESAT, you came in from ESAT, isn’t that right?”

Corkery: “no, I came in from Dell I spent 13 years with Dell and 13 years with Apple.”

Jennings: “You were involved with ESAT before, that is that right?”

Corkery: “I was, I was but what I can tell you is, when I came in, Siteserv was in bad shape, whoever bought that company…”

Jennings: “Okay, okay, can I ask you about the second concern that was raised, the payment of shareholders, if it was such a good deal, why did shareholders need to be convinced ,and need to be paid to be convinced?”

Corkery: “Well, it’s specifically, that, that, the IBRC acted, the State sold the company but, I’d imagine those shareholders had invested a lot of money over a number of years ,they probably never got close to anything of that money back and they were probably given some value because the company had some value namely €50 million value and they as shareholders shared in that value that would be a typical truncation where shareholder….”

Jennings: “But taxpayers, and I know it’s not your responsibility, they’ll be wondering why if there was money in the pot to pay shareholders why wasn’t that used as part of the debt writedown.”

Corkery: “Again, you know, I can’t exactly answer that but I mean the best thing to do was to try to convince the shareholders to sell the company otherwise you know we’d have lost, no, the taxpayer would have lost, another €50 million, the taxpayer would have lost 1600 jobs which would have cost the taxpayer, and to sell that on to some entrepreneur who’s willing to take the risk, invest in the company, we’ve invested over 50 million in the last 2 years, committed to invest another 100 million over the next three years, and you know we’ve doubled the employment we had when we bought the company two years ago that has to be good for the tax payer, so net net this was a proper deal, a good deal and the taxpayer came out the right side of it in my view. In the meantime I’m trying to…”

Jennings: “As you point out, Siteserv…”

Corkery: “In the meantime I’m trying to run the company so it’s difficult when these questions keep coming up and we get back to the same answer because…”

Jennings: “Yes, but they are legitimate questions and we’re very grateful to you for coming on for answering them. If it was best practice why were the underbidders so unhappy?”

Corkery: “Well as was said yesterday the so-called underbidder never made an official bid for the company, it came in very late in the process, and the Siteserv plc board, which were brought together to make a decision on who they should sell the company to, felt they came in late in the process but more importantly they put a number of conditions. You must remember Siteserv was sold as a company to the Denis O’Brien company with no conditions, in other words we didn’t even get the opportunity to do a due diligence, this was €50 million take it or leave it, take it off the parking lot. Another company came in late in the process and put in a number of conditions including a 6 week due diligence process and that obviously was a huge risk…”

Jennings: “One of those companies said that the reason why they came in late was because when they enquired whether the company was up for sale they were repeatedly told it wasn’t.”

Corkery: “I don’t know anything about that. I mean it’s easy to come in after the event But there wasn’t too many people, two and a half years ago in the sale of Siteserv, and the sale generally of the engineering business in Ireland, willing to take a company with no conditions for €50 million that had lost €100 million of accumulated losses over the past two years.”

Jennings: “As you pointed out, Siteserv is doing very well now, more employees, bigger revenues, bigger profits and a big debt gone and a big contract to put in water meters. How did that happen given that the contract was awarded before GMC Sierra was ever legally formed?”

Corkery: “No, yeah well that would generally be pretty standard, we made a joint venture with GMC and Sierra company, we tendered for that process and you know, if you’re successful you set up a joint venture, if you’re not successful then you don’t legally set up the joint venture, again that’s something that gets the headlines but technically, you know, there’s nothing to it you don’t go through the process of setting up a joint venture prior to getting a project like that because the joint venture is specific to the contract, in other words we saw GMC as being experts in the water area and that’s why we did a joint venture with them…”

Jennings: “Sean Corkery, CEO of Siteserv, thank you very much for speaking to us this morning.”

Listen here

Last night: Siteserv for Sore Eyes

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