Thursday 27 October 2016

O'Brien is the elephant in the room - I'm not his mouthpiece

Published 30/04/2015 | 02:30

The bottom line financial performance is the only philosophy from Denis O’Brien and his representatives
The bottom line financial performance is the only philosophy from Denis O’Brien and his representatives

The controversy around the sale of Siteserv has a dual aspect: commercial and political. The Government is entirely right to conduct an open, independent review of all IBRC transactions involving a write-off of more than €10m.

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To transparently ensure accountability against any allegations of "sweetheart deals" arising out of indigenous banking collapses, this should be extended to fully include similar transactions in the State-owned institutions of Nama, AIB and Permanent TSB.

The essence of such an investigation must establish that there was an open bidding process; selection of the highest offer; no hidden conflicts of interests by professional advisers or banking executives; the best possible returns to taxpayers.

Ultimately, the Comptroller and Auditor General should be empowered as final arbiter of these matters, presenting reports for open scrutiny by the Public Accounts Committee. I have some reservations about KPMG conducting an initial scoping review, because Kieran Wallace was not only liquidator of IBRC, but conducted the final wind-up payments relating to Siteserv. KPMG personnel had identifiable roles on the Siteserv board.

The major, unanswered question for IBRC is how the shareholders in Siteserv in 2012 leveraged payments of €4.96m from an insolvent company. IBRC was owed €150m, which presumably required the company shareholding to be held as collateral against these loans. In all circumstances, bank repayment demands would be the most secured creditor. Shareholders would rank behind even unsecured/ trade creditors in the queue for payment. Any bank could threaten shareholders with receivership, whereby the receiver would sell the business as a going concern, thereby ensuring shareholders got zilch.

I haven't heard credible explanations as to how these realities of company law were circumvented by shareholders. It's most unusual.

Walter Hobbs, Alan Dukes and Mike Aynsley have credibly explained their roles and motivation to do the best by taxpayers and their belief that they accepted the highest effective bid. Loan losses of €105m were an actuality before any bidder tendered to acquire the company. The sharp decline in book values during the crash meant that, like thousands of other enterprises which acquired assets at the peak of the boom, they simply had to write off stranded investments. There's nothing anyone could have done to evade these deficits. However, if they had chosen the receivership route, they could have avoided allegations of "insiders" running the process by being at arm's length. This would guarantee priority payment to the bank above shareholders. Dublin is a village, always susceptible to rumour of personal pal prejudices - IBRC seemed not to have foreseen the scope for such retrospective criticism or the need to stand apart.

The politics of the Siteserv sale have become a rather familiar narrative: Denis O'Brien, water meters, Enda Kenny, golden circles, Fine Gael and conspiracy. In 2012, a tender process for Irish Water hadn't yet been conceived. Ultimately, the tender selection process is subject to regular statutory and EU monitoring. So what's the political supposition scenario? Theories that Enda Kenny and Fine Gael are best buddies with O'Brien, actively colluding to mutually support each other, has become a common consensus. Where's the evidence to support this intriguing innuendo? Financial support for political parties and candidates has respective legal limits of €2,000 and €200. Disclosure levels are a fraction of this.

Fine Gael is not dependent on any individual. Instead, the State primarily funds it. Amongst Enda Kenny's most visceral critics are the 'Sunday Independent' newspaper and myself, both ostensibly under sway of Denis O'Brien as paymaster.

Over the past six years, I've worked in Newstalk radio station as co-presenter of 'Newstalk Breakfast'. A key aspect of my role, beyond interviewing, is to articulate opinions.

I have only once ever received any contact from Denis O'Brien concerning the programme. It was to suggest the availability of a well-known individual (non-political) for interview, from a discussion he had the previous day. Like all guests on the show, I referred it to my producers. Contributor selection is beyond my pay grade. Perceived notions that any individual, corporate executive, director or shareholder of Communicorp (let alone Denis O'Brien) has an input into what I say is simply bullshit.

Because this constant collusion charge is not rebutted does not mean that it is true. From direct personal experience, I can vouch that all my opinions on air and in print are merely, but solely, my own authentic views.

There are pressures on me from my editors and they probably come from shareholders. These are at all costs to compete, grow audience, increase listeners and gain market share. The bottom line financial performance is the only philosophy I am vaguely aware of from Denis O'Brien and his representatives. If I was to distil a prejudice, it would be an ethos of private sector realities and non-reliance on State subsidies.

This mirrors my own entrepreneurial family and political background. I differ from politicians who spent their entire working lives (e.g. as a teacher) in public sector employment. I empathise and resonate with those who can't depend on the taxpayer for their livelihood and the culture of risk that is associated with private enterprise. The elephant in the room is Denis O'Brien: I am not his mouthpiece.

Relationships between the media and big business in Ireland differ here from those in the UK. Rupert Murdoch was unapologetic about openly supporting Maggie Thatcher and then Tony Blair in election campaigns.

RTÉ remains by far the most influential media outlet, combining radio and television output - a lead item on the Six One or Nine O'Clock News can turn a political drama into a crisis like no other media rival.

Controversy is heightened by the media's herd mentality, yet the knock-out blow is usually televisual. The alleged power of media moguls is greatly exaggerated.

If Siteserv had been bought by CRH, Kingspan, Sisk, Grafton or BAM, would there be the same whiff of politicised probing?

Let's have absolute rigour in always ensuring the best deal for the taxpayers, but avoid bogey-man machinations.

Irish Independent

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