Wednesday 20 November 2019

Pressure on Donohoe to sell shares in companies

Finance Minister faces conflict of interest claims over investments in Diageo and P&G

Paschal Donohoe Photo:
Paschal Donohoe Photo:
Philip Ryan

Philip Ryan

Finance Minister Paschal Donohoe is facing growing demands to sell his shareholdings after it emerged that the State's official investment fund has interests in the same companies.

Mr Donohoe is refusing to sell his shares in multinational drinks company Diageo and consumer goods giant Procter & Gamble (P&G) despite being responsible for setting excise duty and VAT in his role as minister.

It has now emerged that the Irish Strategic Investment Fund (ISIF), which invests more than €8bn on behalf of the taxpayer, has interests in both companies.

ISIF has almost €1m worth of P&G shares and €10m invested in an Ulster Bank Diageo venture capital fund that invests in technology companies.

The Department of Finance is carrying out a review of the investment fund which is offloading its international shareholding. The funding raised will then be invested in Irish projects.

Transport Minister Shane Ross is selling shares he held in the National Toll Roads owing to his portfolio and Agriculture Minister Michael Creed divested himself of his interest in the Kerry Group when he was appointed.

Former public expenditure minister and Labour Party leader Brendan Howlin told the Sunday Independent Mr Donohoe should sell his shares to avoid any potential conflicts of interest.

"Nobody would suggest that Paschal Donohoe is interested in using his position for his own interest," Mr Howlin said.

"But in the context where he is the minister in charge of excise duty, holding shares in Diageo clearly represents a potential conflict of interest.

"Equally, as the minister in charge of the Ireland Strategic Investment Fund, his holding of shares in Procter & Gamble while the ISIF does likewise is another potential conflict of interest. Ministers should do more than abide by the letter of the rules. They should abide by the spirit of them too.

"I hope that Paschal Donohoe will follow the lead set by his Cabinet colleagues Michael Creed and Shane Ross, and dispose of any shareholdings that could be seen to conflict with the powers granted to him as a minister."

Fianna Fail finance spokesman Michael McGrath said he would not tell the minister what to do with his shares but said he would "personally divest himself of any shareholdings to avoid any potential conflicts of interest," if he was in the same position.

While transport, sport and tourism minister, Mr Donohoe was forced to absent himself from meetings relating to legislation banning alcohol companies from sponsoring sporting events because of his shareholding.

The minister's shares in Diageo stem from his wife's former employment with the company, while the Procter & Gamble holding relates to Mr Donohoe's time working for the American consumer goods firm. Last week, the minister's spokeswoman refused to reveal how many shares Mr Donohoe holds in both companies. She also refused to say if he had met with representatives of Diageo or received correspondence from the company since he was appointed as a Cabinet minister in 2014.

The drinks company has lobbied ministers and Government officials on 12 occasions in the past two years according to the register of lobbying. Mr Donohoe is not listed as one of those lobbied by Diageo.

"Minister Donohoe makes a full declaration to SIPO (the Standards in Public Office Commission) every year. He has no further comment to make on the matter," the spokeswoman said.

She added that the minister had no role in deciding what shares were bought or sold by the ISIF.

"The department's review of ISIF is a high-level review of the ISIF's mandate and strategy," she said. "The scope of the review does not include any review of individual investments.

"The individual shareholdings in the ISIF's portfolio are a matter for the portfolio managers contracted and overseen by the ISIF.

"Neither the minister nor the department has a role in the purchase, holding or sale of individual investments in the portfolio."

Sunday Independent

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