Jim Walsh (Fianna Fail) | Oireachtas source

I thank the Minister. He has clarified some of my questions. The assets of these companies would be difficult to value. We saw the balance sheets of the banks before the crash; they had no connection whatever with reality. I would have thought it prudent, if the State is taking over - even in the case of a semi-state company - to have at least a couple of valuations done on the assets as a precautionary measure. That should then be certified in the accounts with the attachments, so that the local authority would have some responsibility to validate the valuations for itself.

I ask the Minister to deal with the issue of the pension deficits in both scenarios - that is, where the company is integrated in the first instance, and when it remains as a stand-alone company within the local authority. The Minister is giving a very important corporate decision to the chief executive of the local authority, who is not a member of the board. He is making the board's decision subject to an external person in the very important area of borrowing money. The chief executive may be a shareholder but he is still external. I am concerned by the legal interpretation as to the chief executive being regarded as a shadow director. He is playing a fundamental role with regard to a very important decision. He is the primary decision maker, the approver of borrowing within the company. As a consequence, he is putting himself in the role of a shadow director, in my opinion. Has legal advice been taken? If he is a shadow director and if the loan cannot be repaid by the company for some reason, in one scenario it is pretty clear. However, if a stand-alone company cannot pay, could the banks have recourse to the manager and the local authority for the repayment of that loan? The banks could go outside the corporate pale simply because the manager was in fact the approver and maybe the decision maker for that borrowing. There is very extensive borrowing, as we have mentioned.