More pieces of information have emerged in the Dáil about the dealings of IBRC with businessman Denis O’Brien, but the accuracy of some of this information has come into question. So what do we know? And what does it mean for the inquiry?
It is clear that O'Brien was a significant IBRC borrower, and both Catherine Murphy and Sinn Féin's Pearse Doherty have referred to discussions he had after IBRC was liquidated in February 2013 in relation to his borrowings.
O’Brien, they said, claimed he had a deal with the previous IBRC management to extend his loan repayment period by three years.
Yesterday in the Dáil, Doherty gave more detail, saying that O’Brien went to the IBRC on a number of occasions through 2013 seeking agreement to an extension of his loan term.
In March, when he looked for a three-year extension, he was told loan facilities could only be extended by one year, Doherty said, and only then if the deal was seen as beneficial to the bank.
There were further comings and goings, leading to agreement on May 20th, according to Doherty, to extend his facilities for 12 months, also subject to a €100 million repayment before the end of November. “This was a de facto second rejection” for O’Brien, according to Doherty, and a further proposal was rejected in July.
According to Doherty, O’Brien met his IBRC case team in August and again referred to the verbal agreement with the former IBRC management. Eventually, Doherty said, the IBRC credit committee approved a 12-month extension without the need to make a capital repayment.
Disputed
However Doherty’s information was disputed last night by sources with knowledge of the liquidation. The sources said the information about an alleged extension of credit facilities is inaccurate and misleading and does not reflect the facts of the case or the position taken by IBRC’s credit committee.
So, according to this view, Doherty got it wrong, presumably due to not having complete information about the outcome of the credit committee meeting.
A credit committee is the key decision-making group in a bank and would not always agree with proposals put to it.
Doherty used the information on dealings between the bank and IBRC after liquidation as an argument as to why the time period for the inquiry should be extended beyond February 2013.
However, if O’Brien’s loans were not extended and there is no evidence that he, or any other borrower, was dealt with differently during the special liquidation period, then the Government will probably hold the line and insist the inquiry time period is not extended.
Siteserv
Where it all started – the
Siteserv
controversy – also remained the focus of the Dáil debate. This deal, in March 2012, was conducted by the former IBRC management and will be central to the inquiry. Doherty also referred to the financing of this transaction in his Dáil statement.
Specifically, he said an agreement was in place in 2012 under which IBRC would get more than 90 per cent of all dividends O'Brien received from Digicel in excess of $50 million. According to Doherty, there was a once-off dividend distribution of $300 million in 2012, of which the IBRC received two thirds, with the balance going to pay down a Bank of Ireland loan which had been used to fund the Siteserv deal.
“ This was all approved by the IBRC group credit committee,” Doherty said. If this is correct it is of interest, as it is the first time there has been a financial link between O’Brien’s position as a major borrower from the IBRC and his role as a purchaser of an asset which the bank put up for sale – Siteserv.
We now have a range of claims and counter-claims about Siteserv and O’Brien’s dealings with IBRC. On the face of it, Doherty’s information when he referred to an interest rate of 3 per cent on O’Brien’s loans is different from Murphy’s figure of 1.25 per cent which, when quoted in the Dáil recently, took the controversy to a new level and led to the appointment of the commission of inquiry.
The difficulty now is that it is not clear how or when even the basic facts will be clarified, or whether it will all go into the commission of inquiry, and nothing further will be said for months. There are clearly issues to be investigated, but doubt, too, over some of the allegations.
The Government has to decide quickly how to respond to this as the frenzy continues, with significant political implications – and now uncertainty in some cases – about just what it is that needs to be investigated.
If the inquiry is to cover everything done by the IBRC management and the special liquidator, it will never be completed.