The speed at which events surrounding the Siteserv furore moved between Tuesday and yesterday was dictated by the severity of the political pressure applied to the Government and the ensuing public anger.
Independent TD Catherine Murphy chipped away at the issue with detailed parliamentary questions to Michael Noonan over many months, querying whether the deal to sell Siteserv to Denis O'Brien was the best value for the State.
In the Dáil, Fianna Fáil leader Micheál Martin also led the charge by maintaining pressure on Enda Kenny.
Noonan will be hoping the announcement of a review of Siteserv and other large IBRC asset disposals, to be carried out KPMG accountants Kieran Wallace and Eamonn Richardson, the special liquidators of IBRC, will take the pressure off, at least until they report back in August.
The decision on the review was obviously taken at great speed. As late as yesterday morning, Noonan had floated the possibility that his officials might spend the weekend assessing which agency would be best placed to carry out a review, which might then be sent to the Comptroller and Auditor General for further investigation. This idea was clearly overtaken by events.
The special liquidators' review will cover all IBRC sell-offs between the nationalisation of Anglo Irish Bank in January 2009 and IBRC's entry into special liquidation in February 2013. So Wallace and Richardson won't be reviewing any of their own actions.
One obvious sticking point, however, is that KPMG was one of the financial advisers to Siteserv when it was sold to Denis O’Brien’s Millington for €45 million in April 2012.
Best bid
The Siteserv selling committee, upon which KPMG sat, made its decisions by consensus, according to IBRC’s representative on the committee,
Walter Hobbs
. So it is clear that KPMG considered Millington’s to be the best bid.
In effect, the special liquidators from KPMG will review the probity and commercial reasoning behind a transaction that was approved in 2012 by KPMG, albeit by a different department of the accounting firm and by different executives.
Still, this issue of a perceived conflict of interest is likely to be one of the first sticks grasped by the Opposition to beat the Government.
Noonan also appears to have left it open to the special liquidators to assess which transactions, other than Siteserv, they choose to review.
"The Minister will also direct the special liquidators to include in their review and report any transactions which give rise, or would likely give rise, to public concerns in respect of the ultimate returns to the taxpayer," the Department of Finance said.
It is clear from the documents released under reedom of information that the department had concerns not just over Siteserv, but also other large IBRC disposals. KPMG may have advised on some of those other deals, but it appears at this stage that the KPMG special liquidators will make the call on what is and isn’t investigated.
Wallace and Richardson are both highly regarded and experienced, and bolstered their reputations with their adroit handling of the wind- down of IBRC. It can be argued they are perfectly capable of maintaining their independence.
However, in terms of optics, getting the KPMG accountants to conduct the review leaves the whole process open to criticism by the Government’s opponents.
Another obvious issue is that, according to the announcement of the review by the Department of Finance, it will cover “those acting on behalf of IBRC, including the board, directors, management, employees and agents of IBRC and whether it can be concluded that any of the transactions were not commercially sound”.
Under this definition, the review will not cover any actions of the Department of Finance or its ministerial cohort, led by Noonan. In short, no politicians will be scrutinised.
One feature of the saga over the past few days has been the intensity of the political pressure applied to Noonan, particularly his actions after the sale and whether or not he took strong enough action once his officials raised concerns over the Siteserv deal.
But perhaps the Dáil is the best forum for scrutiny of politicians.
Several issues
From the documents relating to Siteserv that have entered the public domain in recent days, the issues that will be assessed by the KPMG reviewers are clear.
Was the decision to effectively allow Siteserv to sell itself, the wisdom of which department officials queried afterwards, the best course of action? Or should IBRC have put the company through a process such as receivership or examinership?
Hobbs maintains putting it through a process would have “destroyed” the company, because its trade credit lines would have closed up and its customers deserted it.
Shareholders’ deal
Was the decision to allow a payment of €5 million from the proceeds to Siteserv shareholders the correct one? Hobbs maintains they would not have voted the deal through otherwise.
Why did Siteserv agree to enter exclusive negotiations with Millington when other bidders had put forward similar amounts? O’Brien had threatened to walk away unless he got exclusivity. There is an argument that Siteserv should have let him.
Were those other, higher, bids that were rejected really worse for the State in the long run?
It is clear that the officials' concerns over Siteserv deal contributed to a tense atmosphere between IBRC and the department, personified by a reputedly frosty relationship between John Moran, the department's then top civil servant, and Alan Dukes, the bank's chairman.
Dukes planned release today of a rebuttal to the officials’s concerns should be another intriguing act in this extraordinary drama.
