Business Irish

Sunday 25 August 2019

€295-an-hour IBRC liquidation fees under spotlight in lawsuits

Campaigner: David Hall served a plenary summons on the department
Campaigner: David Hall served a plenary summons on the department
Shane Phelan

Shane Phelan

Government officials have defended a decision not to appoint a committee to have oversight of the liquidation of the former Anglo Irish Bank, which is expected to cost the taxpayer up to €300m.

The secretary-general of the Department of Finance stood over the decision in a letter to the Dáil Public Accounts Committee after the PAC expressed concerns over the issue.

But the assurance is not expected to stop the committee from continuing to seek the introduction of some sort of independent oversight mechanism.

The issue of fees paid to joint liquidators Kieran Wallace and Eamonn Richardson of KPMG is also expected to come to the fore in two separate High Court actions being taken by debt campaigner David Hall and developer Paddy McKillen.

The Irish Independent understands the lawsuits allege the assessment of fees by the department has been insufficient and lacking in transparency. It is understood declarations are being sought that the department failed to ensure there was an effective process for monitoring fees and failed to protect the interests of taxpayers.

The allegations are being denied by the department.

Mr Hall briefed TDs about his concerns during a private session of the PAC earlier this week.

"Reduced rates" of between €165 and €295 an hour, excluding VAT, for KPMG staff were quoted by Mr Wallace ahead of the liquidation in 2013, according to documents provided to the PAC by the department.

A central issue expected to feature in the Hall and McKillen cases is that while the Companies Act requires the setting up of a "committee of inspection" to allow creditors to have oversight of a liquidation, the IBRC Act, under which the bank is being wound up, specifically dis- applied the requirement for such a committee.

Such was the PAC's concern over the issue, it recommended in a report in December 2017 that consideration be given to amending the act to allow for a committee of inspection to be set up.

However, the suggestion has been shot down by the department.

In a letter to the PAC this week, its secretary-general, Derek Moran, said the IBRC Act gave Finance Minister Paschal Donohoe special powers to oversee the liquidation.

It said the department was firmly of the view the liquidation has been conducted in an entirely appropriate manner.

Mr Moran also said the department was firmly of the view that allegations made in relation to the liquidation were "without foundation".

The secretary-general detailed how Mr Wallace was consulted on a confidential basis as part of the preparatory work leading up to the special liquidation.

But the department told the Irish Independent no advice was sought or received from the special liquidators in relation to the inclusion or exclusion of a committee of inspection in the IBRC Act.

Mr Hall served a plenary summons on the department in December 2017, while Mr McKillen served one in October last year.

In correspondence, Mr Moran told the PAC both summonses were "largely identical".

He said declarations were being sought against the minister in relation to the conduct of the liquidation, the terms and conditions of the remuneration and expenses of the special liquidators and the oversight exercised by the department.

Irish Independent

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