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Tuesday 24 October 2017

Q&A The Siteserv deal

Former IBRC chairman Alan Dukes and CEO Mike Aynsley
Former IBRC chairman Alan Dukes and CEO Mike Aynsley
Thomas Molloy

Thomas Molloy

Q: What's Catherine Murphy's campaign about?

A: She has got Department of Finance documents on the sale of Siteserv to businessman Denis O'Brien back in 2012 for €45m.

Q: Siteserv? What's that?

A: It hires out scaffolding and also does things like installing meters for Irish Water. It was listed on the stock exchange a few years ago but ran into difficulties during the financial crisis. It had enormous debts courtesy of Anglo Irish Bank and ended up in the hands of State-owned IBRC. It was eventually sold off to Mr O'Brien in a move that crystallised a €105m loss for the taxpayer.

Q: But that sounds like lots of other companies?

A: Two things stand out. Shareholders in Siteserv got a €5m payment when the company was sold. Normally, shareholders get zilch if a firm runs into trouble.

Q: What else was unusual?

A: Some Department of Finance officials were uneasy with the way IBRC sold off Siteserv. In a memo to Michael Noonan, referred to in the Dáil by Ms Murphy, the officials say they were "concerned at the number of large transactions [at IBRC] that have been poorly executed under the direction of the bank's former chief executive".

Q: Who was CEO?

A: Mike Aynsley. Former Fine Gael man Alan Dukes was chairman. Both say there was absolutely nothing untoward about the way IBRC sold off companies. It has been insisted that the best deal for the taxpayer was achieved

Q: Fair enough?

A: Michael Noonan summoned Mr Aynsley and Mr Dukes to explain their actions. But he ultimately seems to have been of the view that no major action was required. But the way the bank notified the department about such sales was changed. What is startling about all this is just how bad relations were between the Finance Department and IBRC.

Q: What made officials uneasy?

A: Some of the companies which failed to buy Siteserv said that they had offered more than the eventual selling price. Rivals seem to have been excluded from the sale process.

Q: Is that so unusual?

A: Not always. Sometimes people sell to a low bidder with cash rather than a higher bidder who must line up borrowing. Still, state-owned organisations must be transparent and can't act like private companies.

Q: What happens next?

A: We're promised more documents today and the C&AG will conduct an inquiry. In other words, the sale is to be scrutinised. We know very little about how the State sold off valuable assets during the crisis. Now we will learn something.

Irish Independent

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