Tuesday 25 October 2016

Once again, world of finance rules over human decency

Published 18/06/2015 | 02:30

'Once again in Ireland the worlds of high finance and morality have collided – and high finance comes out on top'
'Once again in Ireland the worlds of high finance and morality have collided – and high finance comes out on top'

Champagne corks must have popped as soon as they signed on the dotted line. Whoo-hoo! Party time! Let's drink a toast to the great god Moolah, and to pulling a stroke.

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Vulture Capitalists 1, Little People 0.

The Clerys stunt is a sweet deal for speculators. For Boston investment group Gordon Brothers, which doubled its money in less than three years with a reported €29m sale tag.

It had snapped up the department store at a knockdown price from the Guiney family, debt-laden from a property gamble during the Tiger years.

And it's a sweet deal for Natrium Ltd, the consortium which has acquired an iconic building in a prime location without any responsibility for the staff working there - some on the payroll for up to 40 years.

But it's a sour deal for employees, concession holders and suppliers of Clerys. Sour for the broader community, too, to watch people being fleeced - many of them low-paid workers who can ill afford to take a hit.

It came as a thunderbolt. Last Friday, the locks were put on the doors of number 18 O'Connell Street, and staff were given 30 minutes to clear out with their belongings.

Yesterday, tears were shed inside the building as concession holders were allowed back briefly to retrieve their stock.

That rapid, secretive sale of Clerys from Gordon Brothers to Natrium has led to complaints about sharp practice.

Before the sale, Gordon Brothers hived off the building from the operating business, meaning debts could be kept separate from assets.

Clearly, some people have no difficulty taking a short cut through the sewers on their road to riches - but the law appears to be on their side.

Currently, the redundancy legislation to protect workers is too weak, while the vulture capitalists - as always - are too greedy.

The 400-plus staff who've lost their jobs can only expect the bare minimum in statutory redundancy. And the 50 concession holders due some €2m cash held by Clerys from sales of their stock are in limbo.

It doesn't look promising.

Other businesses may also fail as a result of this sleight of hand at Clerys.

Once again in Ireland the worlds of high finance and morality have collided - and high finance comes out on top.

What does that tell us?

That unleashed capitalism is a dangerous force, and our laws need tightening to rein it in. Action, not handwringing, is how our politicians can best serve us here.

Shamefully, Irish people are among the drivers of this shoddy deal which treats their fellow citizens inhumanely: Dubliner Deirdre Foley owns 20pc of Natrium, while others involved have Irish addresses. Natrium Ltd comprises her D2 private property company, and London hedge fund Cheyne Capital Management.

Some funding from a property company in Atlanta was also supplied.

Gordon Brothers has cut and run, clanking its millions, but Natrium expects to capitalise on its ownership of Clerys.

There is talk of developing the premises for retail and office use, with the possibility of a hotel on site, too - for decades the Imperial Hotel was housed on Clerys' upper floors.

Perhaps Natrium is intending to sell on. Or maybe it is banking on the circumstances being forgotten by the time a redevelopment opens to the public.

But I won't be in a hurry to give my business to anyone operating out of the building, and I doubt if I'm alone.

Meanwhile, Gordon Brothers is saying little and Natrium is saying nothing.

They don't need to - actions speak louder than words. Natrium won't even meet with Siptu or Mandate representing the workers. It's as if the staff don't exist. A stroke of the pen, a champagne bottle fizzes open, and hundreds of people and their livelihoods are magicked away.

Politicians are saying plenty, however. "Despicable", "callous", "capitalism at its worst" and whatever you're having yourself. But legislation needs to be introduced to protect workers from vulture capitalists.

With Clerys, it's the location that's valuable, not the business. Especially with a Luas stop planned outside - bringing footfall from the southside - and the worst of the recession behind.

The building is iconic, with a stately façade, and dates back to 1922: it was put up after the original building was destroyed in the Easter Rising.

But times change and so do fashions. Perhaps there is room for a third department store in Dublin city centre, but not one which looks so dated.

For years, it has lagged behind other retailers. Gordon Brothers claimed it would secure Clerys' future after buying the store in 2012, but its word is worthless.

Companies rise and companies fall.

That's the nature of business. After all, Denis Guiney bought Clerys from receivership in 1941, availing of a bargain just as Gordon Brothers did. But he kept the business alive.

Wealth creation and decency towards our fellow human beings should not be at opposite ends of the spectrum.

However, since nobody explained that to vulture capitalists, the Government has a responsibility to close off loopholes in business legislation. Workers must be treated with respect.

People are not expendable. Profit is not king. Didn't we learn that during the Tiger years?

Irish Independent

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