Charlie McCreevy (Kildare North, Fianna Fail)

Every Finance Act since 1997 has included some changes to employee share ownership plans, all of which have been done at the request of the ESOTs which comprise the workers involved and their representatives. Even this year's Finance Bill contains a change to ESOP legislation to accommodate the employees of the former Irish National Petroleum Corporation. The change did not have the effect of favouring one consortium over the other as mentioned by the Deputy. Had I not made this change, I would have been accused of favouring the Denis O'Brien consortium. This change was requested by the Eircom ESOT to level the playing field.

I understand the Eircom ESOT was more inclined to vote for the Valentia consortium which favoured preference shares being offered. If it could not have done that, a tax liability would have been triggered for those represented by the ESOT. In no way would the ESOT have recommended that bid. If this change had not been made, it would have favoured the Denis O'Brien consortium and the Deputy can imagine the hullabaloo that would have caused.

This provision was contained in the Finance Bill 2002 as published and was covered in the explanatory memorandum. It was debated on Committee Stage and there was no secret about it. After the decision was made in June 2001, the Department of Finance received a request under the Freedom of Information Act, to which it decided to accede in September 2001. In September 2001, a third party objected to the release of information and there was an appeal to the Information Commissioner, on which the commissioner made a decision to release in September 2003. There was nothing underhand about this matter. The changes under section 13 of the Finance Act 2002 requested by representatives of the workers were to preserve the tax benefits of the existing ESOT. These changes were non-discriminatory and affected other takeovers such as the takeover of the ACC Bank by Rabobank.

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