Siteserv sale: Assenagon case likely to be reviewed

A scheme run by IBRC that was ruled unlawful in the British courts is likely to feature in the review announced by the finance minister.

Siteserv sale: Assenagon case likely to be reviewed

The scheme, which attempted to burn some junior bondholders to the tune of €1.6bn, was successfully challenged in the High Court in London by the German company, Assenagon Asset Management.

Former IBRC chairman, Alan Dukes, included the Assenagon case, along with the Siteserv deal, in a list of seven issues he said he believed the Department of Finance wished to probe.

Finance Minister Michael Noonan said that around 30 separate sales and other commercial transactions carried out by IBRC would come under scrutiny in the review by KPMG which is to be completed by August 31, with a report to go to the Public Accounts Committee for public airing.

Apart from Siteserv, he did not specify what transactions would be included, apart from setting the criterion that they must have involved a write-off resulting in a loss to the taxpayer of more than €10m.

READ MORE: Calls issued to probe Siteserv sale; TD Murphy receives more documents .  

Mr Dukes said he did know for sure what transactions were on Mr Noonan’s list, but he said he had been made aware of some that he believed caused concern in the Department of Finance.

He said one involved the selling off of the wealth management division of IBRC but he did not know what issues the department had with that.

A widely expected deal to sell the operation to Key Capital in 2012 was abandoned and the decision taken instead to wind down the business over a number of years.

At the time, the complexities involved in transferring staff and assets to the new owner were cited as the reason for the change in plan.

“It was extremely difficult to deal with. It was extremely complex,” Mr Dukes said. “I would be very interested to find out if the department has any advice to offer on that that they didn’t offer in the past.”

He said he was told relations with the Quinn family were also causing concern but he was unclear as to what the core problem was. He said the department had been unhelpful when IBRC appointed consultants A1 to assist with the bank’s attempts to pursue the Quinns’ property assets in Russia and the Ukraine.

He said he was told to go ahead with the plan “if he thought it was the right thing to do” which he saw as an exercise in back covering by the department.

Another bone of contention was the Apthorp case which was part of the US loan book. IBRC sold off most of the loan book but was challenged over the sale of the debt on the landmark Apthorp apartment block in New York which was home to several major stars.

Mr Dukes said an official had problems with the way the case was handled but all the papers had been handed over to the Central Bank for comment and no criticisms were made about it.

IBRC’s appointment of financial consultants, Blackstone, to handle a number of sales was opposed by the department but Mr Dukes said the appointment was necessary and justified.

Mr Dukes said he also expected questions about a deal involving Topaz which saw loans linked to the company sold to Denis O’Brien.

“I don’t know what their concerns are but it’s another case where Denis O’Brien was involved,” he said.

Walter Hobbs

The man appointed by IBRC to supervise the Siteserv deal said Mr O’Brien’s offer was accepted as it was the best deal for the State, company, and shareholders.

“When the IBRC board made its final decision, they got a full comprehensive memorandum from the team I was working with to recommend the deal. I wrote independently to IBRC recommending the deal... with Denis O’Brien’s Millington unequivocally as being the best course of action. for the company, for the shareholders, for IBRC for the State. My final words were ‘pursuing any other route at this stage would be highly perilous’,”

Denis O’Brien

Denis O’Brien said he was not in control of the Siteserv sale process when it was bought from IBRC at a loss to the taxpayer of €100m.

Mr O’Brien said he was “merely the buyer” and was not aware of what was happening between the Department of Finance and IBRC at the time.

He said he since his company took over the company, employee numbers and revenues have doubled.He also said

would be happy to appear before the Public Accounts Committee on the issue if he is asked.

Michael Noonan

Documents released by the Department of Finance show that, by the summer of 2012, Mr Noonan was so “concerned at the constant stream of issues that are arising in IBRC” that he was “not confident at present that the relationship is sufficiently secure to maintain my confidence in reporting to the Dáil”.

Mr Noonan also said his confidence in IBRC was “‘wearing quite thin’ at this stage”.

Mike Aynsley

Legal representatives for the ex-IBRC chief are understood to have written to Michael Noonan regarding a reference to him in a briefing note about Siteserv.

Mr Aynsley has demanded copies of all documents relating to him and his lawyers state that documents released under FoI were “almost entirely redacted save for paragraphs where the character and reputation of our client was impugnedto a degree that is designed to damage the reputation and standing of Mr Aynsley”.

READ MORE: Calls issued to probe Siteserv sale; TD Murphy receives more documents .

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