The bruising encounter between the Oireachtas, parts of the media and billionaire businessman Denis O'Brien over the past three weeks has shifted the balance in the debate over how much the public should be entitled to know about the operations of the Irish Bank Resolution Corporation (IBRC).

IBRC, into which the collapsed Anglo Irish Bank and Irish Nationwide Building Society were subsumed in July 2011, was a core part of the State's effort to contain the economic collapse caused by the banking crisis and is associated with costs to the public of about €35 billion.

Yet, as is the case with the National Asset Management Agency (Nama), a pattern soon emerged that IBRC would operate with similar levels of confidentiality to those of a normal bank insofar as its dealings with its customers were concerned.

It is worth bearing in mind that when Anglo was nationalised and chief executive Mike Aynsley and others were appointed to run it in 2009, it was intended that the bank might rise from the ashes, phoenix-like, once its chronic bad loan difficulties were dealt with. The bulk of its customers were not property developers but commercial operators, with loans of varying sizes.

By 2011, the bank's shareholder, the Government, had decided the bank should be wound down but it has since emerged that the Department of Finance grew increasingly frustrated at the pace of the progress being made by the IBRC in that regard.

The details of that fraught relationship became less of an issue after the liquidation of IBRC by the Government in February 2013, a move that caught the bank by surprise. The liquidators set about quickly selling off the bank’s loans at varying discounts.

The types of debtors caught up in the middle of all this ranged from the PAYE worker who had an INBS mortgage on a three-bedroom house that was in negative equity to a small trader with business loans from Anglo. It also included the multibillion-euro borrowings of the Quinn Group and its owners, much of which were associated with high-risk gambles on the Anglo share price, and the borrowings of well-known commercial operations such as Topaz and the Racing Post.

Income and assets

While some of the IBRC’s major customers, such as those behind the expansion of

Arnotts

, were obviously in grave trouble, others, such as O’Brien, were flush with income and assets that came from outside

Ireland

and its broken property market.

O'Brien, in an article in this newspaper on Tuesday, said that when the Irish crash was at its nadir, he told his telecoms group, Digicel, to move cash deposits of more than $600 million from the US to two Irish banks, as a vote of confidence in the Irish economy. An early test of the public's right to know what was going on with IBRC customers' affairs came in 2013 when property investor Paddy McKillen and O'Brien sought an interlocutory injunction against the Sunday Times and reporter Mark Tighe.

The newspaper wanted to publish confidential information concerning opinions expressed by Anglo officials internally about McKillen as well as about a further loan being extended to McKillen and about the commercial relationship between McKillen and O’Brien.

Public interest

Mr

Justice Colm Mac Eochaidh

decided that the

Sunday Times

had established, as a matter of very significant public interest, the extent to which the bank might be granting further public monies to one of its largest debtors. It could report that a further loan was granted. However, the publication of the internal opinion communication was a “step too far”. Likewise with the details of the relationship between McKillen and O’Brien.

Last year, McKillen said he had refinanced, or paid off, his loans to IBRC using finance from US investment firm Colony Capital. The book value of McKillen’s loans was about €1 billion.

More recently, Independent TD Catherine Murphy, using Dáil privilege, said she had received information that O’Brien was paying a rate of about 1.25 per cent on his massive loans from IBRC and that this rate represented a “subsidy”.

She queried how this could be the state of affairs at a time when O'Brien was borrowing more money – from State-owned AIB – to fund the €48 million purchase of Siteserv by his Isle of Man-based company, Millington. O'Brien has contested the accuracy of statements made by Murphy, but has not given any information as to what rate he was paying IBRC.

As a result of the ruling published this week by Mr Justice Donald Binchy in the case taken by O'Brien and the IBRC liquidators against RTÉ, we now know that on October 12th, 2013 O'Brien wrote to liquidator Kieran Wallace requesting a one-year extension of his loan facilities and stated that he had an agreement with the previous management that his loan balance would be repaid over an undisclosed period of years.

O’Brien’s Anglo borrowings are understood to have been about €800 million in 2009. What they were two years ago is not known, though the judgment says they were “substantial”, and RTÉ told the court it wanted to say they were €300 million. O’Brien has since refinanced, or repaid, his IBRC loans.

While RTÉ wanted to report that O’Brien alleged in his letter that he had a verbal agreement about his loans with Aynsley, Mr Justice Binchy, in his ruling, said that the evidence available showed that, though O’Brien had alleged the existence of an agreement, it did not appear that IBRC, before or after its liquidation, had accepted that this was so.

Wallace, in his submission to the court, said it was not unusual for borrowers, in their own interests, to assert that they had such an agreement. “The fact that it is Mr O’Brien himself who contends that he had an agreement with IBRC is, in my view, immaterial,” the judge said.

In a statement, Aynsley has commented on how larger, performing IBRC customers were dealt with. A phase one paydown of the debt to a certain level would be agreed, as would the fact that the treatment of the second phase would then be negotiated, for the remainder of the money owed. This second phase was “not an approved commitment”. What exactly that means is not clear.

Interest rates

In the statement Aynsley said it was not true, as alleged by Murphy in the Dáil, that he acted without regard to IBRC’s control processes for dealing with customers.

Former IBRC chairman Alan Dukes told RTÉ radio earlier this week that there wasn't a general rule on setting interest rates, given its range of customers. The level of risk associated with a loan was a key factor, as was how the loan fitted in with the bank's overall objective of maximising the return for the exchequer, he said.

If the commission to inquire into certain aspects of IBRC is to allay the public concern that exists, it seems a lot of detail about how the State bank went about its dealings with some of its major customers will have to be brought into the light of day.