Noonan forced into full IBRC inquiry

The Government has set up an independent probe into all IBRC deals between 2009 and 2013 — with a particular focus on preferential interest rates and “unusual” share trading of companies it subsequently sold — after finally admitting the existing KPMG review is flawed.

Finance Minister Michael Noonan confirmed the U-turn last night in light of the ongoing controversy surrounding Denis O’Brien’s interactions with the State- owned bank.

In an announcement described by opposition TDs as a “spectacular climbdown”, the Fine Gael TD told the Cabinet he is scrapping the review and replacing it with a long sought-after commission of investigation.

This independent inquiry will complete its work by December and will specifically focus on:

• All transactions, activities and management decisions at IBRC between January 2009 and February 7, 2013, when the special liquidators were appointed — any deals which resulted in a loss to the taxpayer of €10m or more — “preferential” interest rate terms given to certain clients which resulted in a loss to the taxpayer of over €4m when compared with the standard interest rates for “loans of that nature”;
• “Any unusual share trading which would give rise to an inference inside information was improperly provided to or used” by those purchasing shares in companies before they were sold by IBRC.

Mr Noonan said 40 deals costing the taxpayer over €10m fall into the now extended 2009 to 2013 scope of the investigation.

The “preferential” interest rate section has been sparked by controversy over an IBRC agreement with Mr O’Brien revealed last week in the Dáil by independent TD Catherine Murphy, but is not limited to one case.

Mr O’Brien has said the claims are inaccurate.

The “unusual” share trading issue is understood to relate specifically to sudden changes in Siteserv shares before it was purchased from IBRC by Mr O’Brien in March 2012.

In November 2011, 6.4m shares were sold in the firm, compared to 121,000 in October 2011, and 4.76m between January and October the same year.

Mr Noonan said he was finally forced to set up the commission of investigation — opposition calls for which Government has repeatedly rejected since the IBRC saga began at the start of the year — as “new allegations” mean the current KPMG review will not be trusted by the public even if it finds no wrongdoing.

These “new allegations” relate to Ms Murphy’s Dáil revelations that Mr O’Brien received a 1.25% interest rate instead of a 7.5% rate from IBRC on his personal loans, costing the taxpayer “upwards of €500m”.

High Court files relating to a high-profile injunction by Mr O’Brien against RTÉ, released yesterday, show the deal was struck by IBRC but continued by KPMG special liquidator Kieran Wallace, who was heading up the original Government-backed review.

While claiming the KPMG review “conflict of interest had been resolved” by the April appointment of Judge Iarfhlaith O’Neill to oversee any such concerns, Mr Noonan admitted last night the now scrapped inquiry was “insufficient” .

Ms Murphy said the development was a “spectacular climbdown” but that she was relieved her concerns over KPMG’s involvement are “finally being listened to”.