Anglo write off €110 million in Denis O’Brien deal!

In April, billionaire tax exile Denis O’Brien did a deal with the former Anglo Irish Bank to purchase a company called Siteserv for €45 million. This sale saw €110 million of taxpayers’ money being simply written off by the bank in a manner which raises further serious questions about the links between this controversial businessman and politicians.

Siteserv is a profitable company with many valuable contracts with UPC and BSKYB, as well as numerous state contracts. But it had racked up debts with Anglo to the tune of €150 million. When Anglo was nationalised this debt became the debt of the Irish people.

Prize goes to the Lowest bidder

Through his investment vehicle Millington, O’Brien’s offer of €45million was accepted, this would see the state receive €40 million while the shareholders would receive €5 million. However, there had been two higher bids for the company which were rejected. One for €52 million, and the other for €60 million.

This was all done under the nose of former Fine Gael minister Alan Dukes who is now chairman of the former bank.

A suspect deal?

The Moriarty Tribunal exposed the links between O’Brien and Michael Lowry in the awarding of the state’s second mobile phone licence. Since then, his relationship with Fine Gael seems to have got cosier, with Taoiseach Enda Kenny inviting him to Global Irish Economic Forum and appearing on the same platform as him when ringing the bell at the New York Stock Exchange.

The chairman of Sitserv is Hugh Cooney.  He is also an establishment figure, acting as an advisory member of the National Treasury Management Agency, and also the chairman of Enterprise Ireland.

These positions give him ease of access to politicians and raises questions around how the company won so many state contracts with  Bord Gais, ESB, motorway services and were even chosen to provide elements of security during the Obama and Queen visits last year.

Water meters – The real target?

The real prize potentially for O’Brien is the highly profitable contracts with Irish Water, the new state company which will oversee the installation and upkeep of water meters and ultimately the privatisation of the Irish water service.

Phil Hogan has decided that Bord Gais will take under its control Irish Water. Siteserv and Bord Gais already have a healthy relationship, this puts them in prime position to win the contract which Michael Noonan has said could be worth up to €450 million. Indeed, it has been reported that this is already a done deal. Today FM, an O’Brien station, on 20 April even went so far as to offer as a prize that they would cover the cost of installation and up-keep of the winner’s water meter for 20 years!

Wheeling and dealing in Siteserv deal

The deal which saw Denis O’ Brien buy  Siteserv is one that contains many conflicts of interests and contentious decisions.

The company was sold for €45 million, but there were two higher bids. One was by a “multibillion investment fund” called Anchorage for €52 million. The other was by a multi-national company called Altrad, who offered €60 million. The Altrad bid would have seen the state get an extra €11.5 million from the deal and the shareholders receive an extra €3.5 million.  However, the Altrad bid was never considered, despite the fact they had previously made enquires about purchasing the company.

Chairman Hugh Cooney, who was pictured with Enda Kenny on the same day that Kenny rang the bell of the New York stock-exchange with O’Brien, said it was rejected because the “conditions” in O’Brien’s offer were better. Hugh Cooney and other Siteserv executives are major shareholders in the company.

According to Walter Hobbs, who is supposed to be a taxpayers’ representative in IBRC (Anglo), only two rounds of bidding took place; was this to facilitate the O’Brien deal? KPMG and Davy Stockbrokers acted as advisors on the deal, and contacted potential buyers. Why did they not contact Altrad who had previously expressed interest? Robert Dix is a non-executive director and shareholder at Siteserv, he is described as a “veteran of KPMG”. What influence did he have in relation to which companies were contacted?

The law firm Arthur Cox acted as legal representatives to both O’Brien and the Irish Bank Resolution Committee (IBRC), formerly Anglo. Does this not reflect a conflict of interests?

The only reason this deal became public knowledge was because of the fallout caused by the bidding process, but it raises big questions and also about what other deals are taking place that may also be costing the taxpayers millions!