Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

I wish to address four key issues in respect of this affair. First, the sale of Siteserv itself; second, the relationship between IBRC and the Department of Finance; third, the nature and narrow remit of the proposed inquiry; and, fourth, why vital concerns raised by Department of Finance officials were effectively withheld from the Dáil for so long.

The sale of Siteserv is an important issue of public interest. A subsidiary of this company subsequently went on to win three contracts linked to water metering, totalling €62 million each. The fundamental error was made when the company itself and its directors were given the sale to conduct, at arm's length from IBRC. Everything else stems from that wrong decision. Indeed, civil servants in the Minister's Department raised that very point. There was no logical reason to exclude trade dealers. What has been said in public about that - the idea of confidentiality being a cause for concern - is a load of nonsense.

There are numerous confidentiality templates and clauses which cover situations like this across the board, in banks and elsewhere, when it comes to the disposal and sale of companies. The idea a raft of people in the market, and market leaders in this field, were excluded from any chance to purchase the company makes no sense and there is no logic attached to it. The exclusivity period was also wrong and higher bids were excluded. The Sunday Business Post reported last weekend that UK private equity fund, Rutland Partners, tabled a bid of €55 million but it was rejected due to conditions attached. Better Capital claims it was shut out of the process. We also had Altrad, Anchorage and others who equally feel they were shut out.

There is also the €5 million payout which was shocking and scandalous. The fundamental rule is that if a company is gone, the shareholders' equity is gone with it. The idea that €5 million would be paid to bribe the shareholders and get them to agree to the sale does not wash. There is no justification for it. When we consider that people in mortgage arrears and people with all sorts of issues with banks do not get anything like this treatment, we begin to see and understand the sense of resentment in society when this kind of thing goes on and the whole idea that if one is on the inside and people know each other, things can get done.

We know about the share dealing in advance of the sale itself. Why did people buy shares in a bust company? There was a sudden upsurge in share sales in the month before IBRC began to receive the first bids for Siteserv as part of a confidential sales process. In November 2011, some 6.4 million shares were sold in the firm, compared to 121,000 in October 2011 and 4.76 million between January and October the same year. Who were these investors? Will we find out? Will the inquiry cover this issue? On what information were these investors acting? These are legitimate questions.

Another key issue is the relationship between IBRC and the Department of Finance. Will this be covered by the inquiry? Will civil servants be brought in by the inquiry and asked very basic questions? We have learned from the freedom of information documentation that civil servants in the Department of Finance raised a range of significant issues about the conduct and behaviour of IBRC. There was, for example, the hiring of Blackstone without public procurement. Blackstone is a company which is well used to buying distressed assets. It had full visibility of everything in IBRC. I learned through a parliamentary question replied to today by the Minister that officials in the Department "are aware that IBRC proceeded with the appointment of the company referred to in the question without following a standard procurement process".

The CEO of IBRC at the time used his authority under bank policy to waive the requirement of Board approval for the engagement. IBRC felt that given the sensitivities around the piece of work which the company referred to in the question was engaged to undertake, they decided that a targeted selection process for this limited piece of work was the best approach to take.

One individual, the CEO, decided to hire Blackstone and gave it full visibility of every portfolio in IBRC. It made millions out of the assignment. Was it €4 million or €5 million it made out of it? This very serious issue was raised with the Minister.

We also have the Apthorp deal, where the adverse deviation from valuation norms was between $25 million and $50 million. Again, officials at the Department were very concerned about it. This was raised by an executive in IBRC and the Department was alerted. There were issues pertaining to how IBRC dealt with Topaz when Mr. O'Leary was the majority shareholder. There were issues about how major clients were handled by IBRC, such as the Quinn family, Denis O'Brien and Paddy McKillen. This is all in the freedom of information documents. There was the Siteserv deal itself, which necessitated an entire memo from the Department of Finance such was its concern about how the company was sold.

We also have the failure to sell IBRC Wealth Management and the relationship between it and IBRC proper. There were perceived conflicts of interest between them in terms of how transactions were conducted. William Fry was brought in to do a report on the relationship between IBRC Wealth Management which managed a lot of wealth on behalf of many individuals and IBRC, and how the two operated as two separate legal entities, apparently, in the one edifice. What was that about? Last week, I asked the Taoiseach if he would publish the report from William Fry on the perceived conflict of interest. Will the Minister take steps in this regard? Will the inquiry encompass this issue, which was of such concern to the Department of Finance that it necessitated the secondment of a departmental official to the bank?

The Minister knows there was a lot of hostility about that decision between the Department and the chairman, the CEO and the bank itself. Last week, we read the chairman, Alan Dukes, wrote serious letters complaining about the individual to the Department. This hostility was not good enough from the bank's perspective. On whose behalf did it think it was acting? Did these people forget they were acting essentially as agents of the State? It was outrageous carry on and the demonisation of the Department of Finance which has happened subsequently is equally outrageous. I have not noted anyone from the Government contradicting what the chairman, Alan Dukes, said about Department of Finance officials in any shape or form and this is wrong. Someone should stand up for the civil servants who raised legitimate questions.

Why were these concerns withheld from the Dáil for so long? Four months and 13 parliamentary questions later, Deputy Murphy eventually got some detail because freedom of information was hurriedly coming down the tracks. Why did the Minister not tell the Dáil about the list of concerns which has now been documented in freedom of information documents? Why was it withheld from the Dáil? Was the Minister afraid of upsetting somebody or upsetting the apple cart? Was it better to leave well alone? No one can quite understand why this information was withheld for so long from the Dáil, and Deputy Catherine Murphy in particular, in the context of the liquidation of IBRC when we were told everything was grand and everybody was good and behaving. We then learned from the documents much later that everything was not grand.

This brings me to the nature and type of the investigation. It is a fundamental error of judgment to appoint the same company involved in advising on the sale to investigate the sale. Do not give me the stuff about Chinese walls and different divisions; with regard to a conflict of interest and the perception of a conflict of interest, it is a no-brainer and an error of judgment on the Minister's behalf. The Labour Party is going along with it, although the Tánaiste told me she wanted an independent competent authority. I do not understand why the Government is ramming through this particular mode of inquiry. It suggests an arrogance and a detachment from public anger. There is arrogance, perhaps because of the overall majority, that the Government can ram through whatever it likes and can stitch this into an inquiry with a narrow remit, because many of the issues I have outlined will not be covered, and we will be told whether there are material deficiencies and that it meets normal commercial sale standards. This is all it will be asked to come up with. It is a stitch up in many respects to get the outcome the Government wants in the time covered.

It is wrong to proceed on the basis the Minister has decided to proceed with regard to satisfying genuine public interest provoked by the concerns of civil servants in the Department of Finance, primarily with regard to the conduct of IBRC in these large transactions and the sale of Siteserv.

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