Fresh O’Brien claims threaten inquiry

Fresh claims that businessman Denis O’Brien renegotiated his loans on special terms with IBRC after threatening legal action have thrown into doubt the terms for an inquiry into the now-bust bank.

Allegations have emerged that Mr O’Brien claimed he had a “verbal agreement” with the bank to alter the terms of loans amounting to €315m.

The claim was made under Dáil privilege last night by Sinn Féin finance spokesman Pearse Doherty, who warned the matter would fall outside the January 2009 to February 2013 remit of the commission of investigation.

Speaking during the first of a two-day debate on the scope of the inquiry, Mr Doherty said documents he has received show that Mr O’Brien requested the loan extension three times between March 7 and June 21, 2013, as he had a pre-existing “verbal agreement” allowing the extension.

IBRC’s group credit committee rejected the requests on each occasion.

On March 7, April 26, and June 21, Mr O’Brien wrote to IBRC saying he should be able to repay his loans over three years, but was told this was not the case.

After being told his €315m loan could be sold to a third party, Mr O’Brien made it clear in August 2013 that he had a “verbal agreement” with former IBRC CEO Mike Aynsley and board member Richard Woodhouse.

Mr Doherty said Mr O’Brien and his lawyers argued that this agreement — which predated the February 7, 2013, liquidation of IBRC — allowed him to repay his loan over three years, beginning in 2012.

Mr Doherty said the documents he has seen show Mr O’Brien made it clear he was not prepared to have his loans sold and would, if necessary, issue protective legal proceedings.

At this point, the special liquidators —KPMG’s Kieran Wallace and Eamon Richardson — agreed to extend the loan repayment period.

“These issues raise serious questions,” said Mr Doherty. “How does a bank in liquidation extend a €315m loan, which is the same thing as creating a new loan, which its group credit committee had rejected just a number of months earlier?”

Mr Doherty said the files also show Mr O’Brien had a separate 2012 loan repayment agreement with IBRC giving the bank “92.02% of all Digicel dividends in excess of $50m”.

That year, Digicel made a once-off $300m dividend. IBRC received €150m of this, amounting to 65%. The balance, Mr Doherty said, was then used by Mr O’Brien to pay down a Bank of Ireland loan used to fund the Siteserv deal, raising further questions over the deal.

A spokesperson for Mr O’Brien did not immediately return a request for comment last night.

The fresh claims are likely to strengthen opposition parties’ calls for the scope of the inquiry to be extended past the date of its liquidation on February 7, 2013.

They include calls from Fianna Fáil finance spokesman Michael McGrath for an interim report to focus specifically on the Siteserv deal and be made available by the autumn instead of the proposed December deadline.

While Independent TD Catherine Murphy said she is largely “happy” with the terms, questions remain unanswered about why Mr O’Brien was asked to increase his offer for Siteserv, and if similar requests were made to other suitors.

However, Fine Gael TD Jim Daly said the focus is unfairly on one citizen and that the Dáil should consider renaming it “the inquiry into certain matters relating to Denis O’Brien”.

Finance Minister Michael Noonan said that while “certain transactions may inadvertently fall outside” the scope of the inquiry, it will be able to add specific issues.

The inquiry will report to Taoiseach Enda Kenny by December 31 and is expected to cost €4m.

During leaders questions, Mr Kenny was accused of staying “silent” on the controversy instead of standing up for Dáil rights because he is “scared” of Mr O’Brien.