David Cullinane (Sinn Fein) | Oireachtas source

I welcome the Minister of State to the House. I am sure he will join me in condemning how the Clerys workers were treated and the despicable way in which they were left high and dry without wages by the company. I will give some context because this raises serious questions about company law. We raised this issue when discussing the company legislation, which we supported, that was introduced by the Government. We also published legislation dealing with the corporate veil.

Clerys was placed in receivership on 17 September 2012. Later that year, the company was sold out of receivership to Boston-based Gordon Brothers for a figure believed to be €2 million. It is reported Bank of Ireland wrote off debts of €10 million for the company and loaned the same amount to the new owners. Until its sudden closure last week it employed 130 full-time staff, who are SIPTU members, and 330 people in concession outlets, who include members of other unions. I believe eight members of Mandate are among those who have lost their jobs. The store was affected by flooding in July 2013 and was closed for four months. It is believed Gordon Brothers received €40 million in insurance money. The new owners oversaw the separation of the retail company into two elements. OCS Operations Limited dealt with the property asset side of the company before it sold the latter for a figure believed to be €29 million to Natrium on 12 June 2015.Gordon Brothers also sold properties attached to the site for up to €5 million to other purchasers. After repaying the loan to Bank of Ireland, Gordon Brothers walked off with an estimated profit of more than €19 million in less than three years. They essentially asset-stripped the company and broke it up into two sections, and the section which employs the staff, OCS Operations, was sold off for €1 and then liquidated by Natrium, which went on to buy the company. Therefore, Gordon Brothers are away on their toes with €19 million and the workers are left penniless.

Natrium Limited, which bought the company, is a joint venture between D2 Private, which is 100% owned by Deirdre Foley and Cheyne Capital Management, a London-based property investment and hedge fund business. It is reported that Deirdre Foley is a former KPMG employee and that Cheyne holds 80% of Natrium, whose directors include Deirdre Foley. Many of the €1 billion-plus of properties owned by D2 Private before the crash were put into NAMA and sold off. It is believed that Natrium was incorporated on 27 May last as a vehicle for the purchase of Clerys property assets. The Cheyne shareholding in Natrium is held by two offshore companies, Cheyne Real Estate Credit Holdings in the Cayman Islands and the Real Estate Credit Investments PCC Limited of Guernsey. Former NAMA executive Graham Emmett, who left the agency in 2012, is a senior executive with Cheyne in its London offices.

The difficulty here is that no provision for redundancy, wages, holiday pay or other staff-related costs was made in the successful bid for Clerys. Concession holders are owed an estimated €3 million. Workers have been informed by the court-appointed liquidators that they will only receive statutory redundancy entitlements of two weeks per year of service, which will be paid from the public purse through the insolvency fund. The defined contribution pension fund is not fully paid up and details of its current state of health are difficult to obtain. It is also reported - the Minister of State might be able to shed some light on this - that liquidators KPMG have also worked as auditors for D2 Private, and concern has been raised by some within the trade union movement that there is a potential conflict of interest with the appointment of this liquidator. I understand this was raised yesterday at a meeting between the liquidator and the trade unions.

There are a number of issues at play. The first and obvious one is what steps the Government can take and what steps it has taken to support the Clerys workers and to make sure they get fair treatment and the maximum that is owed to them. However, it also raises very serious questions about the rights of legal entities and corporates over and above the rights of employees. This is something that comes up over and over again. It is not the first time workers have been left high and dry. We saw it with Waterford Crystal, TalkTalk, Game, La Senza and Vita Cortex. Over and over again we have seen situations where this has happened. Does the Minister of State agree there is a need to bring in legislation to better protect workers? I appreciate the Minister of State is in the process of introducing legislation in regard to collective bargaining and the REA is being restored as part of that. However, this is very specifically in regard to the relationship between company law and the rights of workers. The Minister of State might inform us as to what action he is going to take to better protect workers going forward.