Sunday 26 March 2017

KPMG handed 'blank cheque' to carry out review of transactions - including Siteserv - at IBRC, PAC hears

Sean Fleming, Fianna Fail spokesperson on public expenditure
and reform.
Sean Fleming, Fianna Fail spokesperson on public expenditure and reform.
Niall O'Connor

Niall O'Connor

ACCOUNTANCY giant KPMG has been handed a "blank cheque" to carry out a review into a series of transactions carried out by the Irish Bank Resolution Corporation (IBRC), it's been claimed.

There were tense exchanges at the Dail's Public Accounts Committee (PAC) today after senior Department of Finance officials admitted no fee has been agreed with KPMG ahead of the review, which is also examining the controversial sale of Siteserv.

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.

Opposition TDs have claimed there is a clear conflict of interest. But the Government has said it's decision to appoint high court judge Iarfhaith O'Neill to deal with the prospect of conflicts of interest will ensure the review is independent.

But after coming under questioning from Fianna Fáil TD Sean Fleming, senior department officials no fee has been agreed with KPMG to carry out the review.

Oh my god, oh my god," Mr Fleming replied.

"I am horrified in this day and age that the Irish taxpayer is being asked to write a blank cheque...This is a bad day for department of finance, we look at ye as custodians of the national finance he added.

Deputy head of the department Ann Nolan said the department has agreed rates with IBRC but that discussions have not taken place on fees.

She told the committee that Mr Justice O'Neill is determined to ensure the review is completely independent.

"We will ensure there is independence," Ms Nolan said.

The review is examining IBRC transactions which involve losses of €10m or above.

Ms Nolan added that department officials are due to meet the judge tomorrow to discuss the review process.

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 this month, Ms Murphy used Dail 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 Department of Finance didn't have any interest, then we have a serious problem," Mr Deasy said.

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

It 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.

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