A High Court judge has heavily criticised the sale of building services group Siteserv to billionaire Denis O’Brien at the height of the State’s financial crisis, saying the deal was not “commercially sound”.
Mr Justice Brian Cregan’s confidential draft conclusions were circulated in late July after six years of investigation behind closed doors by a Commission of Investigation, but The Irish Times has established the key findings made.
Siterserv, heavily indebted to the Irish Bank Resolution Corporation, was sold to the Denis O’Brien-owned Millington for €45 million in 2012, with IBRC writing off €119 million of the €150 million it was owed by the company.
The draft report, say multiple sources, finds that €8 million more could have been realised for the State. The judge has criticised the manner in which the sale was conducted, as well as decisions made and the outcome achieved.
According to the draft report, the sale was tainted by wrongdoing and impropriety, undermining the integrity of the process. In his draft findings, Mr Justice Cregan has also said deceptions were perpetrated on the bank.
Several witnesses are preparing to dispute such findings, questioning both the credibility of the conclusions and the basis for making them. Some are known to be considering court proceedings to challenge the provisional inquiry findings.
Taoiseach Micheál Martin has said the costs of the inquiry could exceed €30 million, and the Dáil has heard claims that the final bill may reach €70 million.
The Siteserv deal is the first of dozens of transactions involving IBRC, the former Anglo Irish Bank, to be investigated by the judge.
The judge has set a late October deadline for submissions before preparing a final report that might not be released until next year, a decade after the Siteserv deal. Accordingly, the findings are subject to possible change.
Murphy’s claims
Asked yesterday about the draft findings and when its final report might be released the inquiry said: “The IBRC commission is not in a position to comment.”
The inquiry was initiated in 2015 after Social Democrat co-leader Catherine Murphy raised Dáil questions about IBRC’s relationship with Mr O’Brien. Multiple sources said the judge did not substantiate key claims made by Ms Murphy, who did not appear before the inquiry.
The Siteserv deal was the first of 38 linked to the now liquidated IBRC to be investigated by the commission, involving the write-off of nearly €2 billion in debt, though Judge Cregan has questioned his own powers to investigate some foreign-based individuals.
The draft says an extra €8 million could have been realised for the State, including €4 million on the table in a rival, higher bid by Anchorage, an international fund.
Some close to the sale have argued that Anchorage would have sought to cut its final payment in light of conditions on its offer. Some witnesses are likely to argue that the projection of a higher value on a potential Anchorage deal is inherently speculative and therefore unreliable
An extra €2.1 million could have been raised by cutting a €5 million payment that Siteserv shareholders received when they backed the sale. Multiple sources said the judge found that the shareholders could have settled for €2.9 million. The judge also criticised bonus payments totalling €800,000 to top Siteserv executives. This provisional finding is also expected to be challenged.
There was no comment from Mr O’Brien on the draft, and several other figures involved in the deal declined comment.
