Written answers

Thursday, 23 April 2015

Department of Finance

IBRC Investigations

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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85. To ask the Minister for Finance if he will provide a full list of the investigations that have been conducted into the sale of a company (details supplied) by the Irish Bank Resolution Corporation in 2012; the status of these investigations; if he has requested the special liquidator to provide additional information on the sale; and if he will make a statement on the matter. [16174/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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Upon the receipt of critical representations following the transaction, Department of Finance officials inquired about the transaction with IBRC management as part of their regular engagement. Following initial discussions, they agreed with IBRC's Chairman and CEO (on 31 May 2012) that they would review the available information on the transaction involving Siteserv in greater detail to better understand the decisions taken and the impact these decisions had on the process and the final recovery for the bank.

This review by Department of Finance officials took place on 11 June 2012.  Through this review, Department of Finance officials became concerned with certain aspects of the transaction, which were set out in the memos and briefing notes that have been released under recent Freedom of Information requests.  

One primary concern raised was that IBRC had decided to allow Siteserv to control the sales process rather than IBRC to act in a primary role on this transaction. This decision appears to have given rise to a number of other subsequent actions which Department officials believed could, quite reasonably, be considered to have caused a reduction in the Bank's recovery on the Siteserv exposure.

On 25 July 2012, I met with IBRC's Chairman and CEO to discuss, among other things, the concerns regarding this transaction which were raised to me by Department of Finance officials following their engagement with IBRC management. During my meeting, I sought assurances around the concerns regarding the transaction. The Chairman provided me with strong assurances that the transaction had been thoroughly assessed by the IBRC Board and that the Board of IBRC were satisfied that the transaction was managed in the best manner possible to achieve the best result for the State, including the decision to allow Siteserv to control the sales process. It should be noted that the IBRC Board had a fiduciary responsibility to the bank's stakeholders and so, in light of this legal responsibility, the Chairman and the Board would have considered and provided such assurances following serious and careful consideration. 

It is important to note that at all points mentioned above, the transaction had been concluded. Under the Relationship Framework which was in place at the time with IBRC, IBRC were not required to engage with me or my officials to discuss this transaction. They believed that this transaction was in the ordinary course of business, which was the orderly wind down of IBRC. It was the fiduciary responsibility of the Board of IBRC at that time to ensure that this transaction, along with all other matters in IBRC, was managed in the best way possible.

I am also aware that the Central Bank of Ireland reviewed this transaction. I understand that this review focused on the transaction process and not on whether the transaction was commercially sound or reputationally optimum.

This transaction pre-dated the appointment of the Special Liquidators of IBRC.

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