SBCI advanced €60m to firm which then bailed out its UK parent

Marc MacSharry: Asked that the Office of the Director of Corporate Enforcement  examine the support that was given to Bibby.

The State agency for business lending has advanced €60m to a firm which then used the money to "bail out" its UK parent company, the Dáil's Public Accounts Committee has heard.

During a session with the Strategic Banking Corporation of Ireland (SBCI), it emerged that €70m in lending was approved for Bibby Financial Services Ireland, a subsidiary of the Bibby shipping group in the UK.

During the hearing, it was said the Irish branch of Bibby had “paid €30m of that to its UK company", which was not the intended purpose of the SBCI loan.

At the committee, it was proposed by PAC member Marc MacSharry that it should consider, under section 748 of the Companies Act, asking the Office of the Director of Corporate Enforcement to examine the support that was given to Bibby and whether the money was used for its intended purpose. 

Matt Carthy of Sinn Féin seconded the motion and Independent TD Verona Murphy strongly backed it also.

"It is bailing out Sir John Bibby and his shipping company," said Mr MacSharry. "An aged debt analysis was not carried out on it. What is more, I would question the solvency of Bibby and the fact that the SBCI promoted it and supported it to the tune of €60m which it has drawn down of an approved €70m.

My position is that the SBCI was not set up for this purpose.

'Due diligence'

Suzanne Sweeney of the SCBI said it has "done a very thorough due diligence on the Bibby Financial Services Ireland organisation”.

The committee also heard that the SBCI awarded seven of its staff bonuses in 2019 even though it posted a loss.

The committee members heard that salary costs incurred by SBCI include performance-related payments of €103,000 that were awarded to seven SBCI staff members in 2019. The then-CEO of SBCI received performance-related pay of €25,000 for that year, the committee was told.

This was despite the SBCI incurring a loss of nearly half a million euro.

Standoff at PAC

PAC member Imelda Munster and SBCI interim chief executive Ian Black had something of a standoff as to whether the extra pay given to staff could be defined as bonuses.

“On the issue of performance-related pay, it made up approximately 5% of remuneration in 2019. These are bonuses; is that correct?” Ms Munster asked.

“No, it is performance-related pay. It is based on the performance of the individual. If the staff member does not perform, the performance-related pay is not awarded,” Mr Black responded.

“Yes, so it is a bonus,” said the Sinn Féin TD.

“We refer to it as performance-related pay,” Mr Black then said.

“Most people would call performance-related pay a bonus,” said Ms Munster.

Despite his objection to the use of the word "bonus", Mr Black himself used the term bonus to describe the payments.

The SBCI  was established to facilitate loans to small and medium-sized businesses.