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Archive for February 11th, 2013

In the Kremlin in Moscow, they have what they claim was once the world’s biggest cannon, 10 ft high, 20 ft long, all decorated in an iron filigree. They’ll tell you that the canon was fired once only, and that was after the death of Catherine the Great. The story goes that Catherine was cremated, that the ashes were loaded into the canon, which was turned to face Catherine’s country of birth, Poland, and the canon was fired to symbolically blast the ashes back to Poland in a display of “good riddance”. The story might be apocryphal, like the story of how the sexually voracious Catherine met her end with a stallion (of the horse-burger variety), but now that Anglo is being liquidated, there will be some who would like to see its Australian CEO, Mike Aynsley blasted back to Australia.

Last week, the Government set in train the short term dissolution of Irish Bank Resolution Corporation – “IBRC” which holds the legacy businesses of Anglo Irish Bank and Irish Nationwide Building Society – and as part of the liquidation, some jobs will be lost, and it seems that Mike was amongst the first to go. He was engaged in the Autumn of 2009 and has a contract which expires on his 60th birthday, 24th March 2018. Minister for Finance, Michael Noonan recently was asked “if the Chief Executive Officer of the Irish Bank Resolution Corporation Mr Mike Aynsley is employed on a temporary contract; the date on which this contract was entered into; the termination date of this contract and if he will quantify any termination payments provided for under the contract” and “if the Chief Executive Officer of the Irish Bank Resolution Corporation Mr Mike Aynsley is employed on a continuing or permanent contract and if he will quantify any termination payments provided for under the contract” and the response from Minister Noonan was “I have been advised by IBRC that the CEO, Mike Aynsley, is a permanent employee of the Bank. Mr Aynsley’s contract was entered into in August 2009 and was effective from 7 September 2009. The normal termination date of the contract is upon the CEO’s 60th birthday which is 24 March 2018. Standard termination payments in lieu of notice exist.”

In 2012, Mike was set to earn a basic salary of €500,000 plus a pension contribution of €125,000 plus benefits of €38,000 – believed to be a car and private health.

How will history judge Mike Aynsley’s performance? Not well. He was always viewed poorly on here since that episode in March 2010, six months after he took up his post, when he declared that Anglo was staring at €10bn of losses on its loans. Just three weeks later, the late Brian Lenihan announced that the figure was €23bn. That episode blotted his copy-book irreparably on here.

He gave an interview in 2011 with an Australian financial journal where he had a bit of a bitch about NAMA, which is ironic, given that NAMA is emerging as top dog out of the liquidation. He claimed that NAMA was poorly executed.

Minister Noonan refuses to tell us how much it is costing to pursue the Quinns or David Drumm – in fact the Minister refuses to even give us the total spent by IBRC on legal fees. We accordingly have no way of knowing if these matters are economically justified.

IBRC is still notching up huge losses, and Minister Noonan was unable to tell us when IBRC would return to profitability – both AIB and PTSB have at least both provided estimated dates. And, as for any assurances that IBRC would eventually return some of the bailout funds to the tax-payer. Those assurances were always taken with a pinch of salt on here and are meaningless now anyway.

So, what will Mike walk away with? As a permanent employee with three years of completed service, he will be entitled to statutory redundancy of two weeks’ pay for each completed year of service but pay is capped at €600 per week, so €3,600. There are some reports that he may be entitled to 12 months compensation which would be €500,000 plus a €125,000 contribution to his pension scheme. Other reports suggest a figure of €20,000.

The liquidation of IBRC last week was pretty savage in terms of treatment of the staff, with staff learning on Wednesday evening that their employer was being liquidated. Whilst many have been taken back on rolling contracts, the view on here is about 300 will be made redundant, assuming that most loans are transferred to NAMA. If a substantial number of loans are acquired by third parties before the NAMA deadline of mid-2013, then redundancies might be even higher.

Fianna Fail’s finance spokesperson says he will be raising the subject of senior staff compensation when the Dail resumes tomorrow. He is unlikely to be alone.

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The iconic Gillette complex located on Gillette Corner in west London was bought by Jim McGettigan’s Bonnington Group in 2005 for GBP 30m with the intention of developing the former European headquarters for Gillette into an upmarket hotel. According to Property Week, the loan is now not performing and on Friday, it was reported that NAMA has enforced the loan and the 10.3 acre with 327,000 sq ft of office and warehouse space is now on the market through Savills – listing not available yet – with a price tag of GBP 20m (€24m). The site has planning consent for a 500-bedroom hotel and 1/2m sq ft of offices.

Jim McGettigan (75) and his company are behind a number of hotels in Ireland, the UK and Dubai including the North Star Hotel in Amiens Street, the Royal Hotel in Bray, the Shieling Hotel in Raheny, the Regency Airport Hotel in Whitehall, Dublin, the Parliament Hotel on Lord Edward Street, Dublin, the Cavendish Hotel, Eastbourne, UK and the Bonnington Rooms, London and Bonnington Jumeirah Lakes Towers in Dubai. In 2011, it was reported to be in talks with AIB over €67m of loans.

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