If you believe the Sunday Independent’s Anne Harris curious editorial last week which claimed that journalists at the paper were unaware of the views/composition of the board of management and that there is clear blue water anyway between the management of the Independent News and Media and editorial decisions, then you can expect tomorrow’s edition to continue the recent campaign against Denis O’Brien. There were 10 largely anti-O’Brien articles in last week’s Sunday Independent. How many will we see tomorrow? Will we see Denis O’Brien’s extensive aid effort in Haiti after the catastrophic earthquake being criticised because no giant cheque was presented to the Haitian people as seems a requirement at IN&M’s Sunday World? Will we see a Niamh Horan exclusive “Denis O’Brien has a small willy”? Will there be a headline “Denis O’Brien ate my hamster, while pal Bill ate my pussy”? Will there be a promotion of the O’Reillys “Ireland is a simply marvellous place and the Irish are a grand bunch of lads say O’Reillys (from London)”? Who knows, but certainly the Denis O’Brien dealings with Siteserv seem to have disappeared from the media.
Which is curious because during the week, Minister for Finance Michael Noonan was asked the question on the lips of most people looking in on the Siteserv deal – why was Anglo, or IBRC as it is now known, writing off more than €100m on its €150m loan to Siteserv, and at the same time Siteserv shareholders were walking away with €5m. Minister Noonan was responding to a parliamentary question from Sinn Fein’s finance spokesperson, Pearse Doherty and here’s the defence
“commercial decisions in relation to IBRC are solely a decision for the bank. IBRC have informed me that KPMG Corporate Finance and Davy Corporate Finance ran a joint sales process to sell Siteserv which was in severe financial difficulties and was unable to service or pay back its loans to IBRC. The sale process was initiated by Siteserv and overseen by a subcommittee of the Siteserv Board. The sale process involved two stages and IBRC was briefed after each stage. The Board of Siteserv, as advised by KPMG Corporate Finance and Davy Corporate Finance, recommended the successful bid as representing the best return for IBRC. The Board of the bank are satisfied that this is the case”
So why were the normal rules of capitalism in a debt situation turned on their head with shareholders keeping value, whilst secured lenders wrote off €100m-plus? After all, shareholders in Anglo lost everything in 2009 when secured creditors were repaid 100%. During the week we saw an elderly couple evicted from their €2m home because they didn’t repay the mortgage. Both events are tragic for the shareholders and homeowner but those are the rules of capitalism. Yet the State, and the State owns Anglo 100%, has written off €100m-plus at a commercial business whilst allowing its shareholders to walk away with €5m. And when held to account on the matter, the defence is as set out above.
The opening paragraph above is tongue-in-cheek, I don’t expect we’ll hear much negative coverage of Denis O’Brien in tomorrow’s Sunday Independent at all, following the boardroom drama during the week which saw Gavin O’Reilly resign under terms of a confidential Compromise Agreement and which saw an unanimously-supported new CEO, Vincent Crowley appointed. I could be wrong of course and maybe the Sunday Independent will continue to pull at the Siteserv loose thread as obviously Minister Noonan has given a non-answer above and questions still remain about the sale transaction, and the curiosity of the shareholders not being 100% wiped out.