Billionaire Denis O'Brien offered to guarantee a £5 million loan that had been sought by businessman Paddy McKillen from the Irish Bank Resolution Corporation four years ago, Social Democrats TD Catherine Murphy has said.
The loan, and Mr O'Brien's role in Mr McKillen securing it, was at the heart of an injunction they secured in March 2013 against The Sunday Times preventing it, and all other newspapers and broadcasting media, reporting details of the transaction.
However, speaking with the protection of Oireachtas privilege, Ms Murphy disclosed that Mr O'Brien told the IBRC that he would guarantee repayment of a £5 million loan to Mr McKillen if the bank would give Mr McKillen the money.
In seeking the injunction in 2013, the two men wanted all information about the loan and their relationship kept confidential between them and the bank.
Mr Justice Colm MacEochaidh granted a partial injunction, allowing the media to report the fact of Mr McMcKillen obtaining a loan and the fact that a commercial relationship existed between him and Mr O’Brien.
But the judge ordered that the nature of the relationship with Mr O’Brien, and any opinions expressed by bank officials on the loan application, not be published. Until today, the public did not know why Mr O’Brien was linked to the loan to Mr McKillen.
Bridging loan sought
Speaking during a debate related to the Commission of Investigation into IBRC transactions, Ms Murphy said that in 2012, “the then heavily indebted developer Paddy McKillen sought a bridging loan of just £5 million from IBRC when he had a cashflow problem following his unsuccessful litigation against the Barclay brothers”.
She continued: "As part of that process, Richard Woodhouse, a man connected with the Siteserv sale, and Mr O'Brien advised members of the IBRC, including Mr Aynsley and Tom Hunerson - people connected directly with the Siteserv deal - that Mr O'Brien would provide IBRC with a guarantee of £5 million to support the loan for Mr McKillen."
Siteserv is a company bought by Millington, a company controlled by Mr O'Brien. It subsequently won a contract to install Irish Water meters. Mr Aynsley is Mike Aynsley, who was chief executive of IBRC (having held the same position in Anglo Irish Bank, IBRC's predecessor). Richard Woodhouse was the manager of major client account at both banks, under Mr Aynsley.
Mr O’Brien and Mr McKillen, in arguing that details of their dealing with IBRC should remain confidential, stated that “irreparable harm” would be done to them if the confidentiality of their banking arrangements were breached.
Serious concerns
In an apparent reference to opinions expressed by some bank officials, Ms Murphy added: “Astoundingly, despite serious concerns from some about Mr McKillen’s ability to repay the amounts he owed IBRC - far in excess of £5 million - the bridging facility was granted.
“Essentially, a man with huge debts to IBRC was granted a loan from the IBRC on the guarantee of another man who owed significant sums to IBRC while there were questions over both men’s financial ability to fulfil original loan agreements with IBRC.”
Turning to Mr O'Brien's relationship with Allied Irish Banks, Ms Murphy said: "I also have a question on the provision of the loan by AIB, the bank that is 99 per cent owned by the State, when the business sector in the country was screaming that it could not get credit just to get staff paid.
“The loan was paid to Mr O’Brien to help facilitate the purchase of Siteserv. It is interesting to note that the AIB group chief credit officer at the time the loan was advanced went on after leaving AIB to join the boards of Siteserv, Topaz and the Beacon Hospital, all owned by Mr Denis O’Brien.
“Why was that? My point has always been that, while there may be perfectly legitimate answers to these questions, they stand out as very obvious questions to ask.”
Ms Murphy went on in her speech to refer to Mr O’Brien’s media ownership and the State’s defamation laws.
“In every situation there must be a system of checks and balances and a significant one must be the ability of the media to report news,” she said.
“It became increasingly obvious during all of this that we had a major problem with both the ownership of our media and our defamation laws.
“Not having a functioning media may well be a contributory factor in future inquiries, where that role should properly be played by the media in scrutinising and holding to account in the same way as we in the Opposition are expected to hold the Government to account. It is the checks and balances in the system.
“There can be no doubt that the chilling effect of powerful individuals is a problem in this country, and certainly it has appeared to be the case that the thicker the wallet the thinner the skin.”
