Wednesday 26 October 2016

O'Brien gave offer to back €5m McKillen loan, Dáil told

Published 09/07/2016 | 02:30

Denis O'Brien Photo: Bloomberg
Denis O'Brien Photo: Bloomberg

Businessman Denis O'Brien offered to guarantee a €5m loan sought by businessman Paddy McKillen from the Irish Bank Resolution Corporation (IBRC) four years ago, Social Democrats TD Catherine Murphy claimed in the Dáil.

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Ms Murphy said that Mr O'Brien gave a personal guarantee in order to secure a bridging loan for the property developer Paddy McKillen, when both owed large amounts to the bank.

"Astoundingly, despite serious concerns from some about Mr McKillen's ability to repay the amounts he owed IBRC - far in excess of €5m - the bridging facility was granted.

"Essentially, a man with huge debts to IBRC was granted a loan from the IBRC on the guarantee of another man who owed significant sums to IBRC while there were questions over both men's financial ability to fulfill original loan agreements with IBRC," Ms Murphy said.

"Those making the decision were directly connected with the Siteserv deal and other transactions."

She made the claims during a Dáil debate on legislation to grant extra legal powers to the inquiry into IBRC transactions.

Ms Murphy said that in 2012, "the then heavily indebted developer Paddy McKillen sought a bridging loan of just €5m from IBRC when he had a cashflow problem following his unsuccessful litigation against the Barclay brothers.

"As part of that process, Richard Woodhouse, a man connected with the Siteserv sale, and Mr O'Brien advised members of the IBRC, including (former CEO Mike) Aynsley and Tom Hunerson - people connected directly with the Siteserv deal - that Mr O'Brien would provide IBRC with a guarantee of €5m to support the loan for Mr McKillen."

A Commission of Investigation was set up to probe €38m worth of deals by IBRC. Ms Murphy has been campaigning for more transparency in relation to these deals.

Mr Justice Brian Cregan is studying a series of deals to see if they were commercially sound, including the sale of contracting firm Siteserv to Mr O'Brien's Millington, with a write-down of €119m.

An interim report issued two months ago indicated there were issues around confidentiality that are preventing the judge from making progress.

Now under the Commission of Investigation (Irish Bank Resolution Corporation) Bill 2016, the Commission has been given extra powers to address issues raised.

The Commission will also be given the same powers, rights and privilege of the High Court or a High Court judge in relation to its probe into IBRC.

The Department of Justice said the legislation will be enacted as soon as possible.

Mr O'Brien's spokesman said he had no comment to make.

Irish Independent

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