Tag Archives: Wilbur Ross

US Commerce Secretary Wilbur Ross

Further to yesterday’s post about US Commerce Secretary and former Bank of Ireland board member Wilbur Ross…

A report commissioned by MEP Luke ‘Ming’ Flanagan claims Wilbur Ross sold off his holding in Bank of Ireland for a massive profit in 2014 while in possession of inside information that the bank was using accounting practices to mask its losses and make its financial position look better than it was…

This morning at 11am at Buswells Hotel on Molesworth Street, Dublin 2, Mr Flanagan will launch the report, by Cormac Butler and Ed Heaphy, entitled ‘Did the ECB and the banks collude to hide losses, thus distorting their own balance sheets?’

Meanwhile, an article by Hannah Levintova was published in Mother Jones on Tuesday. Ms Levintova contacted Mr Ross for a comment and sent him the report.

After the article was published, Mr Ross sent the following response to Mother Jones.

It says:

The Mother Jones article about Bank of Ireland is a factually incorrect effort to smear me. The report they reference was commissioned by a single member of the European United Left-Nordic Green Left, whose original member parties included the French, Italian, Portuguese and Greek communist parties. Here are the facts:

The shares purchased by WL Ross Funds, and also by Fidelity Funds, Capital Research, Fairfax, and Kennedy Wilson, were the unsubscribed portion of a rights offering made available to the Irish Government and public shareholders on the preferential terms.

We bought them at the same price they were offered to those other public shareholders. The government at the time had designated a majority of the Board of Directors and was the largest shareholder. The investment bankers appointed by the government were world class firms and it was their obligation to assure proper dissemination of all material information.

The report’s author implausibly says that I learned of what he calls improper accounting during the due diligence and used that information to get a cheap price. This is an obvious non-sequitur, given the process described above.

The Bank’s basic accounting used IAS39, as required by the regulators, and was reviewed by PwC, the Bank’s outside auditors. The Bank’s financial statements were reviewed in excruciating detail by the Irish regulators, the ECB, the SSM, and the IMF.

The Bank also issued a variety of securities at different points during WL Ross Funds’ ownership. Due diligence was performed in each case by the investment bankers and the purchasing institutions. They clearly found nothing wrong.

When we sold the last block of WL Ross Funds’ holdings, other investors such as Fairfax, which had representation on the Board, decided not to join in the sale. The stock subsequently traded at a much higher price.

The report incorrectly says that there were official confessions of improper accounting in May 2015 after the final sale. In fact, the Bank reported earnings for 2015 of 947 million euros, 161 million euros more than in 2014, when WL Ross Funds sold the shares. Earnings in 2016 also were higher than in 2014.

If there actually had been a confession of accounting wrongdoing in 2015, it would have had to be reflected in the financials.

The report also brings in the Ocwen litigation, an irrelevance at best. That case was settled at no cost to me and I never even was called to appear in court. It clearly was mentioned as a smear to imply that I had done something wrong — this is simply not the case.

Yesterday: He Sold Us Short

Wilbur Ross

“We like Ireland very much because, unlike the Club Med countries, it doesn’t need structural reform of the economy All it really needs is to get through the financial crisis that was caused when its banks went berserk. But Ireland’s fundamentals are still there…Ireland will once again become the Celtic Tiger.”

Financier Wilbur Ross in 2011 after taking a 35 per cent stake in Bank of Ireland.

Now US Commerce Secretary, Wilbur Ross with Simon Coveney in Washington DC last October

The accusation is quite simple. Ross, through his investment firm WL Ross & Co., took a near 35% stake in the Bank of Ireland in 2011, during the depths of the crisis. In 2012, he joined the company’s board of directors, but by 2014 he was selling his stake.

He made 500 million euros ($682 million), selling his shares at 26 to 33 euro cents a share over a few months. Ross stepped down from WL Ross & Co. – which is currently being sued by former employees for fee gouging – when he joined the Trump administration.

That would all be fine if it weren’t for the fact that it was later found that the Bank of Ireland was using deceptive accounting to make its balance sheet appear healthier than it was. Without that, Ross would not have been able to sell his shares at such a premium.

This alleged deception was discovered in 2015, shortly after Ross sold his stake, and of course the bank’s stock price suffered as a result. Ross, who as a board member, should have been familiar with the going-ons at the company, especially after doing due diligence and selling at the top.

And, if in the course of doing due diligence, he found out that there was something wrong with the bank’s accounting, he had a duty to report that to shareholders. If he didn’t, and he sold with that knowledge, as the report points out, that is a violation of insider trading laws.

European Parliament Report Accuses Wilbur Ross of Insider Trading (Mother Jones)

More incredibly embarrassing, possibly criminal, news about our Commerce Secretar (Business Insider)

Pics: Getty/Rollingnews

The Guardian’s Lisa O’Carroll writes:

Billionaire investor Wilbur Ross reckons Ireland will the first European nation to recover from the sovereign debt crisis and “will once again become the Celtic Tiger”.

His buyout firm, WL Ross and Co, has already staked a claim on Ireland’s future fortunes by taking equity in Bank of Ireland along with four other investors, helping it avert full nationalisation.

But his use of the phrase Celtic Tiger may rankle with many who think the moniker symbolises an economy out of control.

Still, he’s pretty confident.

“We like Ireland very much because, unlike the Club Med countries, it doesn’t need structural reform of the economy,” Ross said in an interview with CNBC.

“All it really needs is to get through the financial crisis that was caused when its banks went berserk. But Ireland’s fundamentals are still there.”

Ireland will once again become the Celtic Tiger.”

Wilbur. Man. Will you STOP saying that?

 Ireland will be ‘Celtic Tiger’ again – Wilbur Ross (Guardian Ireland Business Blog)