Tuesday 23 January 2018

Q&A: Government launches IBRC review

Former chairman of IBRC Alan Dukes gives a press briefing in relation to the Siteserv sale in April this year. Photo: Mark Condren
Former chairman of IBRC Alan Dukes gives a press briefing in relation to the Siteserv sale in April this year. Photo: Mark Condren

Q: Judge, IBRC, Government, Siteserv, Denis O'Brien, Catherine Murphy, review. Haven't we already had this one?

A: It's fair to say we are still having it. The Government has now ordered a Commission of Investigation to "investigate issues of significant public concern" in relation to the former Irish Bank Resolution Corporation (IBRC).

Q: What is a Commission of Investigation?

A. Legislation introduced in 2004 allows for the establishment by the Government of formal commissions, headed by a judge, to investigate matters of significant public concern and prepare a report.

Judge Yvonne Murphy's investigation into historic child abuse cases in the Dublin archdiocese, and the subsequent Murphy Report published in 2009, is an example.

It is seen as a cheaper and faster alternative to the old tribunal of inquiry model and as having a more solid legal footing than a previously ordered review of IBRC deals, which was ordered only a couple of weeks ago.

That review was to be done by IBRC's special liquidators, Kieran Wallace and Eamonn Richardson of KPMG. Unlike them, a judge's Commission of Investigation can compel witnesses to give evidence. There has also been some disquiet about using KPMG for a review of IBRC when the firm was also involved in a number of its controversial deals, including Siteserv.

Q: Ah yes, Siteserv. Is that what this is still all about?

A: It's part of it. For months now there has been a growing row over issues linked to IBRC, the name given to the former Anglo Irish Bank and Irish Nationwide Building Society after they were merged under State control.

The controversy kicked off with Dáil questions from Catherine Murphy to Michael Noonan about whether IBRC got the best price when it allowed the sale of Siteserv, a heavily indebted facilities services company, to Denis O'Brien in 2012. The State-owned bank took a €100m loss on the deal, even though, controversially, Sitserv's owners shared a €5m payment for allowing the sale to go ahead.

Questions about the deal led to the release of some Department of Finance files that revealed a fraught relationship between the IBRC and the department around the time of the deal, which fed into the calls for a review.

The Commission of Investigation will look at around 30 big IBRC deals, including Siteserv, but its scope is pretty wide. According to the terms of reference, the commission can look at any issues specifically identified "as giving rise or likely to give rise to potential public concern, in respect of the ultimate returns to the taxpayer".

Q. What about Denis O'Brien's interest rate, that's been all over the news this week?

A: The commission has not been set up to look at any individual borrowers. But the issue of whether potentially preferential interest rates or loan terms were given to any borrower does fall within the scope of the review.

The interest rate issue was raised last week in the Dáil, and on foot of that the Commission of Investigation has been asked to examine whether IBRC granted interest rates or loan extensions on preferential terms that were unduly favourable to any borrower.

Q: So what happens next?

A: A judge has to be formally appointed to the job. After that they'll have until the end of the year to come back with a report, which will be published. That timetable looks optimistic.

Q. Is anything off the table?

A. Oddly enough yes. The transfer of loan assets from IBRC to Nama is excluded from the review.

Irish Independent

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