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Catherine Murphy
Catherine Murphy
Image: Photocall Ireland

IBRC inquiry: Department of Finance reveals details of filing error

Catherine Murphy found out via Twitter, but she’s very happy nonetheless.
Jun 3rd 2015, 10:50 PM 39,209 148

Updated 10.20pm 

THE CABINET HAS agreed to establish a commission of investigation into certain transactions carried out by IBRC, the former Anglo Irish Bank.

The Department of Finance confirmed the news this afternoon and the commission will examine up to 40 transactions that resulted in a loss of €10m or more to taxpayers, including the controversial Siteserv transaction.

The draft terms of reference for the new inquiry have been published this evening, and a judge is to be appointed to spearhead the inquiry in due course.

The review will cover all transactions, activities, and management decisions between the nationalisation of Anglo Irish Bank in January 2009, and the appointment of the special liquidations to IBRC in February 2013 that:

  • resulted in a capital loss to IBRC of at least €10,000,000
  • are specifically identified by the Commission as giving rise or likely to give rise to potential public concern, in respect of the ultimate returns to the taxpayer.

Excluded from this will be anything relating “solely to the acquisition of assets by the National Asset Management Agency.”

The inquiry will also be tasked with assessing evidence to establish whether some transactions were not commercially sound and also whether any interest rates, or extensions on interest rates, given by IBRC were “unduly favourable to any borrower”, where the difference was more than €4 million.

Speaking to the media this evening, Finance Minister Michael Noonan said:

There’s no evidence at all that any of these allegations are correct, but they are now a cause of concern, and I believe it’s in the public interest to ventilate what happened.

The decision to order an inquiry, as opposed to the previously planned review, was due the fact that, since Deputy Catherine Murphy’s comments in the Dáil last week, “there is a level of concern now, and there are so many suggestions of perceived conflicts of interests…”

Its establishment follows significant controversy over the bank’s dealings with the businessman Denis O’Brien. It will report by the end of the year.

Meanwhile, it’s emerged this evening that the department has discovered the minutes of IBRC board meetings it was not previously aware it had in the course of compiling responses to FOI requests.

The minutes concern regular monthly meetings between the bank and the department where the sale of Siteserv was mentioned but the details of the transaction were not discussed as such large deals were the subject of a separate meeting.

The filing error – described by one source as a “f*** up” – will require Finance Minister Michael Noonan to correct the Dáil record and his secretary general Derek Moran to go before the Public Accounts Committee to correct statements he made.

However, a department source insisted that the error does not change the substance of what Noonan has previously said he knew about the details of the Siteserv deal, but only a point of fact.

The Minister himself told reporters tonight “it’s a coincidence” that the documents were recovered on the same day as the announcement of the terms of reference for the inquiry.

It’s not connected to the decision to have the commission of inquiry. It’s a different piece of information, and I’m sorry it happened…

The Department of Finance tonight published an “extract” from the minutes of IBRC’s board meeting on 15 March, during which the sale of Siteserv was discussed.

What’s the new inquiry about… 

The new inquiry will replace the controversial KPMG review that was previously announced.

In April, Noonan announced that KPMG would carry out a review of all IBRC transactions that resulted in a loss of over €10 million to taxpayers, including the sale of Siteserv – an issue brought into the public domain by independent TD Catherine Murphy.

Siteserv was sold to the Denis O’Brien-owned Millington by IBRC (formerly Anglo Irish Bank) in 2012 for €45 million. IBRC had given Siteserv a loan of €150 million, meaning the bank wrote off €105 million and the State got back less than €50 million. At the same time, shareholders were paid €5 million.

As KPMG also acted as special liquidators to IBRC, retired High Court judge Iarfhlaith O’Neill was appointed to oversee any potential conflicts of interest.

Speaking to RTÉ’s Six One News this evening, Noonan said what changed his mind on the review was the new allegations made in recent days by Murphy.

Spring Economic Statements Minister for Finance Michael Noonan Source: Sasko Lazarov/Photocall Ireland

“There’s no evidence underpinning any allegations, but the allegations are now causing public concern,” he told the programme.

The review, in my view, was insufficient to deal with the new concerns.

The Minister said it is now in the “public interest to put the matter into the hands of a judge” under a commission of investigation.

He said although it is possible that the investigation will find evidence of wrongdoing, “there’s no evidence of it in any set of allegations”.

But there’s public disquiet, and it’s increasing [...] We can’t have a belief going around hat the actions were improper, and in some way or the other the taxpayer lost out.

Murphy, who repeatedly said this didn’t go far enough, said she is “very pleased” with today’s development:

Speaking on Drivetime, Murphy said she found out the news on Twitter.

She said the KPMG-led inquiry was “conflicted right from the word ‘go’”, adding that a fully independent inquiry is “absolutely” necessary “if people are going to believe the findings of it”.

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Murphy said taxpayers have a right to know if they got the maximum return possible from the sale of Siteserv and if there were transactions at IBRC that “gave an advantage to customers that was to the detriment of the public interest”.

The Minister for Finance also defended replies he gave previously to Deputy Murphy on this matter through parliamentary questions, saying all responses were in line with the procedures of the Dáil:

“I gave an adequate answer, and of course other issues arose, and I answered them in reply to subsequent questions.”

Meanwhile, independent TD Stephen Donnelly said it was “preposterous” that KPMG was going investigate IBRC, adding: “A 7-year-old child wouldn’t accept that.”

Donnelly said the investigation must answer if any information was withheld from the Dáil and why KPMG was appointed to investigate given the “obvious conflict of interest”.

‘Long-running farce’

Fianna Fáil leader Micheál Martin questioned why the coalition is making a “u-turn”.

“If reports are correct this latest development is just the latest chapter in the long running-farce surrounding this government’s handling of concerns about IBRC dealings.

“When the initial KPMG review was announced, we objected and made the point that sooner or later a proper independent investigation would be necessary to address public concerns. The government dismissed us.

Then, when it was clear that the public weren’t buying government assurances, the government changed tack and announced that a retired judge would have oversight. Again we objected and made the point that sooner or later a proper independent investigation would be necessary.

Martin said the Taoiseach has been “inexplicably silent over the course of the last week as the fundamental rights of TDs were being attacked” and called on Enda Kenny to confirm if a commission of investigation is taking place.

dob Denis O'Brien

Speaking earlier today, Tánaiste Joan Burton defended the KPMG review:

“The history of inquiries in Ireland has been marked by those inquires which have been the subject to scoping work which outlined the issues and the parameters of the inquiry have been among the most successful. People will recall the work done by Mr Sean Guerin SC in relation to scoping out what might be examined in respect of matters pertaining to the gardaí.”

Burton said she hoped the investigation will “proceed as quickly as possible” and that O’Neill is “fully empowered to address any of the issues where differences arise”.

Yesterday, a judge ruled that the media is free to publish a speech made by Murphy in the Dáil in which she used her parliamentary privilege to allege that O’Brien was paying an interest rate on his loans to IBRC of 1.25%.

- with reporting from Hugh O’Connell, Cianan Brennan and Nicky Ryan

Enda Kenny silence on Dáil privilege controversy ‘extremely worrying’

Here is the article that Denis O’Brien’s lawyers didn’t want you to see last Thursday

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