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Review of Siteserv deal ordered

Published 23/04/2015

Michael Noonan said that there was nothing unusual about big debt write-offs
Michael Noonan said that there was nothing unusual about big debt write-offs

The Government has moved to dampen controversy over the 45 million euro sale of the Siteserv company to billionaire Denis O'Brien by ordering an audit of the deal.

Alongside that Finance Minister Michael Noonan has asked for reports on any transaction by the rebranded Anglo Irish Bank which led to losses of more than 10 million euro for the State .

The inquiry was sparked by demands from the Opposition for an investigation into the 2012 Siteserv sale, which involved a 100m euro debt write-off, and led to questions on whether there were losses for other big ticket deals by the State-controlled Irish Bank Resolution Corporation (IBRC).

The review will run until August 31.

The Department of Finance fast-tracked the decision for a review after Mr Noonan said he would take the weekend to decide on the best course of action.

He said the decision for a wide-ranging review of the deals done by the IBRC during wind down was fast-tracked because of concerns raised in the Oireachtas and public discourse.

"The review and report will evaluate whether there is any evidence of material deficiencies in the performance of their functions by those acting on behalf of IBRC, including the board, directors, management, employees and agents of IBRC and whether it can be concluded that any of the transactions were not commercially sound," he said.

The s pecial liquidators of IBRC will conduct the audit focusing on any sale that left the bank out of pocket by 10m euro or more.

They will also include any transactions which could lead to "public concerns in respect of the ultimate returns to the taxpayer" but any deals involving the State's bad-bank Nama will not be inspected.

Mr Noonan earlier said there was no evidence to suggest malpractice in the Siteserv deal and that he supported full disclosure.

Taoiseach Enda Kenny said the Government had nothing to hide.

Mr Noonan added that there was nothing unusual about big debt write-offs, particularly as the country was struggling to recover from unprecedented financial and economic collapse.

Some 1,500 people were employed by Siteserv at the time of the sale to Isle of Man registered Millington - and it has since gone on to double its workforce and secure lucrative contracts for the installation of water meters, the Dail heard.

Aside from the issue over debt write-down, concerns have also been raised over a 5m euro payment to shareholders as part of the sale.

The Comptroller and Auditor General dismissed suggestions by Mr Kenny that it had the power to examine IBRC deals, but Mr Noonan is to examine if the C&AG's remit can be extended to cover the liquidated bank.

The Dail Public Accounts Committee said it would seek all documentation from the Department of Finance connected to Siteserv and other major transactions by the IBRC, but it does not have power to investigate a private company.

Tanaiste Joan Burton said she backed the idea of an independent inquiry, but would not be drawn on the format.

"I am in favour of a review of Siteserv and indeed of a number of transactions of equal magnitude that may also be worthy of inquiry," she said.

"What I would like to see is an independent inquiry by a competent authority. I think that's the way to get the correct and honest answers."

Micheal Martin, Fianna Fail leader, told the Dail two other bids - both higher than the 45m euro paid by Millington - had been tabled.

He noted one by Anchorage Capital which put in a 52m euro offer and a second by French company Altrad which he said complained publicly over claims it had been shut out of the process despite a 60m euro offer.

"Paddy does like to know, and Paddy does not know what transpired here," Mr Martin said.

Mr Martin called for a quick and effective commission of investigation into the Siteserv deal and other large transactions from the IBRC books.

Under the regime governing the former Anglo at the time of the Siteserv sale, it was under no obligation to explain transactions to the Department of Finance and t he rules were subsequently changed.

Civil servants raised concerns over whether the Siteserv deal would achieve the best financial result for the State, but former IBRC chairman Alan Dukes dismissed claims that the sale was raised during meetings between senior finance officials and the bank's chiefs.

Mary Lou McDonald, Sinn Fein deputy leader, challenged the Tanaiste over the handling of the issue and claimed the Government had tried to "kick for touch".

"It is at this stage causing considerable public disquiet," she said.

"People want to know what was going on in relation to Siteserv, but more broadly in terms of the operation of IBRC."

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