Thursday 8 December 2016

Dukes tried to get rid of 'abrasive' Finance official

Maeve Sheehan and Daniel McConnell

Published 26/04/2015 | 00:00

Alan Dukes, former Chairman of IBRC, giving a press briefing in relation to the Siteserv issue at the offices of Eames Solicitors. PIc: Mark Condren
Alan Dukes, former Chairman of IBRC, giving a press briefing in relation to the Siteserv issue at the offices of Eames Solicitors. PIc: Mark Condren

THE former chairman of IBRC tried to "terminate" the appointment of a senior Department of Finance official who was seconded to the toxic bank by Finance Minister Michael Noonan, the Sunday Independent has learned.

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In a leaked letter to the Department's secretary general, Alan Dukes severely criticised the role of the official and wrote that his involvement with the bank was being "terminated at close of business today".

The letter, dated January 28, 2013, suggests that there was deepening animosity between the State-owned bank and the Department in the weeks before the Special Liquidator was appointed to the IBRC. In his letter, Mr Dukes wrote that the official's secondment was proposed on a six-month basis to a role that could help "build bridges between the Bank and the Department of Finance".

However, Mr Dukes questioned the official's performance in trenchant and personalised terms, attacking his behaviour as being "abrasive, insubordinate and destructive of discipline and good work practices".

The extraordinary letter from then chairman of the State-owned bank to the Department's secretary general, John Moran, reveals the rapidly worsening relationship between civil servants and bankers days before the bank was liquidated. The finance minister stood down the board of IBRC and appointed a special liquidator on February 6, 2013.

The letter is further confirmation of the increasingly fraught relationship between the Department of Finance and the IBRC, which was disclosed in documents released under the Freedom of Information Act last week.

The documents were initially sought by Catherine Murphy, the Independent TD, who was questioning the bank's handling of the sale of Siteserv, a company that hired out services and utilities, sold to Denis O'Brien's company Millington for €45m in 2012.

However, the records moved the controversy on as the documents showed that the Department's concerns about IBRC ranged from governance and remuneration issues, to the bank's public image, as well as several transactions, including Siteserv.

A spokesman for the Department told the Sunday Independent that the official who was seconded to IBRC remained in his role at IBRC until the bank was liquidated in February 2013. "The Minister for Finance had raised the issue of governance difficulties at IBRC. That culminated in the secondment of a senior official. An assistant secretary was seconded to the IBRC. He remained in the IBRC until February 2013 when the Special Liquidator was appointed."

An informed source said that the department was acting in the interests of the shareholders in the bank - the Irish public - but the bank had resisted such oversight. "The reason he was in there was to make sure that the best interest of the taxpayer was being represented," said the source. He added that the civil servant has an impeccable reputation and was hired for his specific skills in the disposal of assets.

Mr Dukes declined to comment on the letter this weekend. At a press conference on Friday, he said he was extremely angry that the Government was seeking evidence of "criminality" and "malpractice" in its review of IBRC transactions worth more than €10m, which are expected to be reviewed by the Special Liquidator.

However, Fianna Fail continued yesterday to call for an independent inquiry into the sale of services company Siteserv by the bank for €45m.

Mr Martin renewed the call after the Irish Independent disclosed yesterday that the Special Liquidator for the IBRC, Kieran Wallace, an accountant with KPMG, also acted as the liquidator of Siteserv, after the business had been sold. As liquidator in the firm, he was involved in distributing the €5m to Siteserv shareholders, but had not been involved in the initial sale process. Mr Martin denounced the Government's planned review of the controversial IBRC bank transactions which Opposition TDs insist did not deliver value for taxpayers.

Mr Noonan has asked Mr Wallace to review the transaction along with other IBRC transactions worth over €10m.

 

SITESERV - TIMELINE OF A CONTROVERSY

November 2006: Brian Harvey, a UCD graduate, launches Siteserv PLC on the stock market. The company, which rents out fencing, scaffolding and services, expands with a series of acquisitions in Ireland and the UK.

Autumn 2011: Siteserv hit by falling profits and cannot repay €150m debt to IBRC. Siteserv goes on the market. IBRC hires Walter Hobbs to supervise the sale. Mr Hobbs later says IBRC's best hope is to recover €40m to €50m of the debt from the sale.

January 2012: First media reports surface that Siteserv could be sold for less than its €150m debt. Mr Hobbs said last week that there were 12 bids for Siteserv by early 2012.

March 16 2012: Millington's - a company owned by Denis O'Brien - offer of €45.4m is accepted as the best on the table for Siteserv. Bank agrees to take €40m against Siteserv's debt, leaving €5m as a sweetener to shareholders to vote in the sale. Brian Harvey, who owns 20pc of the firm, stands to make around €800,000. Mr Hobbs said it was the highest offer, and the most "straightforward". The other bids were complex and had "too many conditions" attached that drove down the price they were offering.

March 29 2012: Protocol comes into effect obliging IBRC to interact with Department of Finance on any transaction that would cost the bank more than €100m.

April 5 2012: Minister for Finance, Michael Noonan, John Moran and another official meet Alan Dukes on April 5 to discuss governance and remuneration issues but no mention of Siteserv in minutes. Shareholders vote in favour of sale while reports emerge that rival bidders are unhappy.

May 11 2012: Department official sits in on an "informal" transaction review meeting with IBRC - actual "transaction review charter" proposed by the Department hasn't been agreed by the IBRC board. They discuss the sale of Apthorpe, a New York property company.

May 23 2012: Another meeting with IBRC executives at which Department officials highlight concerns raised by an IBRC executive about the Apthorpe transaction.

May 31 2012: Ann Nolan, second secretary at the Department, meets IBRC chairman, Alan Dukes. Briefing document highlights what Department calls IBRC's "serious image problem", and highlights issues such as the appointment of a chief financial officer "without the minister's approval" and claims it pays staff too much. A Department official undertakes to "review the papers" on Siteserv to "better understand the transaction".

June 2012: IBRC and Department discuss Siteserv deal. In a confidential memo afterwards, a Department official suggests either IBRC's chairman or the minister should request an independent review of the transaction.

July 2012: Relationship between Finance and IBRC appears to worsen. An internal Departmental briefing note for a meeting between the Finance Minister, Michael Noonan and his sec gen, John Moran, right, and Mr Dukes and Mike Aynsley, left, IBRC's chief executive, highlights six concerns. These include "remuneration", the bank's "relationship" with the businessman, Paddy McKillen, and the Quinn family along with Siteserv.

August 2012: John Moran meets Mike Aynsley and discusses filling vacant bank posts. The Dail was told the sec gen requested the board to independently review Siteserv but Alan Dukes said this did not happen.

July 2013: Siteserv subsidiary GMC Sierra is one of three firms to win the metering contract with Irish Water, generating more questions from opposition politicians.

21 April 2015: Controversy reignites as documents released under Freedom of Information to Independent TD Catherine Murphy, below, are raised in the Dail, disclosing officials' concerns but also revealing wider tensions. Michael Noonan says IBRC assured him that the transaction "achieved the best possible result for the State".

23 April 2015: Government announces that it has asked IBRC's special liquidator, Kieran Wallace, to review the sale of all IBRC assets worth more than €10m.

Sunday Independent

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