IBRC debate poses broader question about transparency
Published 11/06/2015 | 02:30
For all we have read and heard about Denis O'Brien's loans, we still know, really know, almost nothing.
Mr O'Brien successfully argued in court that we're not entitled to know much, but even he cannot be happy with the situation we have ended up with.
A significant section of the public is certainly unsatisfied and is unlikely to gain much joy later this year because it is a safe bet that the Commission of Investigation won't disclose details the High Court ruled are protected.
Where will that leave us?
It's clear that one issue thrown up in all this debate is the lack of transparency generally about business in Ireland.
This lack of transparency extends to many other countries but it is a particular problem here, where some of the biggest employers in the State are able to hide behind laws that enable companies to report almost nothing about their finances if they choose to go "unlimited".
Household names, including major retailers and developers, have adopted this status which allows them to disclose balance sheet information scantier than a Rio carnival dancer's bikini.
Even private companies without unlimited status can hide a lot of information about debt and borrowing on their balance sheets through offshore units in Bermuda, Luxembourg or the Isle of Man.
We are used to hearing US-based multinationals have used their Irish operations to avail of all sorts of tax avoidance through measures such as the "double Irish" but we rarely realise how often Irish companies also keep details of their business private.
Twenty or 30 years ago, there was much more disclosure in company accounts than there is today because far fewer companies were multinationals and disclosure was seen as good practice.
Secretive companies will be quick to point out that they operate within the law and most of them will be correct.
Others will argue that companies, like individuals, should have a right to privacy.
There is some merit to this argument; companies do hide their accounts, in part, because too much information can help competitors.
The problem is that very few companies are completely private anymore. The financial crisis has shown that taxpayers are all too often on the hook when things go wrong.
Banks and big companies are uninterested in the State during a boom but come crawling to the taxpayer when the wolf is at the door.
Every driver in the country is still paying a surcharge on insurance premiums following the collapse of Quinn Insurance but we are also paying taxes to bolster banks following the collapse of thousands of other firms which have been unable to honour their loans.
We are also paying for private loans, sometimes stretching to hundreds of millions made during the boom, that have not been repaid.
While the law makes a distinction between loans to private individuals and companies, this distinction is blurred when an individual borrows many millions on his own account to buy companies or property.
In reality, any loan worth more than a few million should be treated as a company loan and should be open to scrutiny.
We need to give taxpayers more rights when it comes to demanding information about how companies, and rich individuals, manage their finances because it is so often the taxpayer who ends up paying bills when disaster strikes.
The right to better disclosure of financial information may sound theoretical but it has practical implications.
Knowledge about a company's accounts tells you whether a guarantee is worth the paper it is written on. During the bust, the Irish Independent business desk received dozens of phone calls from anxious couples looking for information about the hotel where they planned to get married. They were rightly worried the hotel would go bust before they got hitched. The strange thing is that we did not get more calls like this because so many hotels did disappear with a couple's deposit.
As always, the solution lies with the Dáil.
It would be simple for TDs to pass legislation requiring companies and individuals to publish more information. New laws could also ban banks from lending money to any company which has unlimited status or hides behind tax havens.
A law like that would make a radical difference to transparency levels and change business for the better.
Mr O'Brien is understandably insisting on his right to privacy and the courts have upheld that right.
The question is not really whether he is correct to protect himself from prying eyes; he clearly has the law on his side. The real question is whether the law should allow so many businesses and individuals to disclose so little information after everything that we have suffered. To force one person to reveal too much is unfair but to force most companies to reveal more about their dealings would create a level playing field and make the world a safer place for anybody who works for a company or buys their services.