The inquiry goes further than the now scrapped KPMG review — which had been dogged by claims of conflicts of interest — and will, says Finance Minister Michael Noonan , uncover what, if any, issues exist.
The points may be added to by opposition parties when the Dáil returns next week, and potentially by an as yet unnamed retired High Court judge overseeing the investigation.
Having been handed the keys to IBRC’s files, it will now be up to this judge to examine the three areas before finalising a report by December instead of August for the now scrapped KPMG review — an election-looming deadline opposition TDs claim may not be met, either by accident or design.
Deals resulting in a €10m-plus loss to State:
Between January 2009 and February 7, 2013, when IBRC’s special liquidators were appointed, 40 deals involving at least 32 clients took place, which each led to a sale loss of €10m or more to the State.
The investigation’s terms of reference accept this issue gives rise to “potential public concern in respect of the ultimate returns to the taxpayer”, with the €119m Siteserv write-off the most prominent known deal.
While IBRC’s Alan Dukes and the purchaser of Siteserv, Denis O’Brien, have insisted nothing untoward took place, the issue has received significant public interest since being uncovered by Independent TD Catherine Murphy amid suggestions of double standards compared to deals for ‘ordinary’ people.
IBRC previously said any deals had the public’s best interests in mind due to its winding down process.
‘Preferential’ interest rates
Given the past week’s ‘constitutional crisis’, this issue needs little introduction.
The scope of the investigation allows it to examine whether “the interest rates or any extension to interest rates, or any periods for re-payments, were given on preferential terms” which saw clients pay €4m less than they would under usual rates.
The terms give no specific mention of any company, with all IBRC clients who may have received the preferential rates coming under scrutiny, in addition to who agreed the deals and why.
However, it is widely accepted this area is under the spotlight because of Ms Murphy’s recent claims that Mr O’Brien received a 1.25% interest rate when a 7.5% rate could have applied, costing the taxpayer “upwards of €500m” — a claim he denies.
‘Unusual’ share trading
While this aspect of the inquiry will again relate to a number of companies sold by IBRC, it involves ongoing questions over “unusual” share fluctuations before the March 2012 sale of Siteserv to the Denis O’Brien-owned firm Millington.
As reported by the Sunday Times in April, a total of 121,000 shares were sold in Siteserv in October 2011. The following month, 6.4m shares were sold, 50% more than the 4.76m shares sold between January and September 2011.
In November 2011, the Siteserv sale was being discussed internally in IBRC despite other interested parties that offered more than Millington being told no sale was planned.
When Siteserv was sold in March 2012, the 3.9c share price was 292% higher than that of January 13, 2012, the day before the €45m sale was confirmed to the stock exchange.
The deal saw shareholders receive €5m. While Siteserv was purchased for €45m, the sale meant the State wrote off €119m owed to it, via IBRC, by Siteserv. Its subsidiary, GMC Sierra, subsequently won the contract to install water meters.