Saturday 1 October 2016

'Blank cheque' for firm leading probe into IBRC deals, Dáil watchdog told

Published 15/05/2015 | 02:30

PAC chair John McGuinness
PAC chair John McGuinness

The Department of Finance has been strongly criticised for failing to set a budget for the review being carried out into a series of transactions by the Irish Bank Resolution Corporation (IBRC).

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Senior department officials said they had not agreed a fee with accountancy giant KPMG, which has been tasked with a number of transactions, including the controversial sale of Siteserv.

A member of the Dáil's Public Accounts Committee (PAC) yesterday claimed KPMG has been handed a "blank cheque" ahead of the review process, due to be completed by the end of August.

Fianna Fáil TD Sean Fleming said the department does not appear to have learned lessons from the past and should have agreed a budget before the review was initiated.

"Oh my God, oh my God, oh my God," Mr Fleming replied when told no budget had been agreed. "I am horrified in this day and age that the Irish taxpayer is being asked to write a blank cheque," he added.

During a tense meeting, PAC chairman John McGuinness called on department officials to "pick up the phone" and immediately retrieve information surrounding the fees paid to KPMG for its services.

Later, it emerged the firm has been paid €74m by the department for liquidating IBRC.

The decision to appoint KPMG over the review has been criticised by the Opposition because the firm served the role of special liquidator of IBRC.

Conflicts

The Government has said its decision to appoint retired High Court judge Iarfhlaith O'Neill to deal with the prospect of conflicts of interest will ensure the review is independent.

The review is examining IBRC transactions which involved losses of €10m or more, including the sale of Siteserv to the Denis O'Brien-owned firm Millington.

Earlier, Fine Gael TD John Deasy criticised the Department for failing to contact either the Stock Exchange or the Office of Director of Corporate Enforcement (ODCE) following an alleged spike in the company's shares while it was being sold between November 2011 and February 2012.

Independent TD Catherine Murphy has requested the ODCE to investigate the alleged spike.

Earlier, Ms Murphy used Dáil privilege to suggest that insider trading may have taken place during the said period.

Asked by Mr Deasy if the department had expressed concern over the alleged share spike to enforcement bodies, officials said no such communication took place.

"If the Department of Finance didn't have any interest, then we have a serious problem," Mr Deasy said.

The department said no details of the Siteserv sale were provided to it before April 2012.

And its officials insisted that it has yet to receive any "evidence" backing up any of the allegations that have been reported in the media.

Department Secretary General Derek Moran detailed to the committee the events that led to the decision to order a review.

He said the "key concern" is that "Siteserv led the sale, not the IBRC."

Mr Moran said there is concern about a company being allowed to run a sales process as well as the possibility that IBRC entered into "exclusivity" with a single bidder.

Irish Independent

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