Archive for February 25th, 2013

The white smoke has emerged from Lansdowne House where unions and the Government were renegotiating the so-called Croke Park Agreement governing pay and conditions for Ireland’s near 300,000 public sector workers.

The headlines are available from the Department of Public Expenditure and Reform here. The cut that will probably attract most immediate attention is the direct cut to gross salary for those earning in excess of €65,000 in pay and allowances each year. Although there has been no announcement yet, it is being assumed here that the cuts will affect politicians who are supposed to be part of the public sector.

That being the case, An Taoiseach Enda Kenny’s salary will fall from €200,000 to €185,350, with the calculation of the cut shown below.


When An Taoiseach came to office in March 2011, one of his first acts was to cut his pay and that of An Tanaiste, ministers and ministers of state by 6.6%, so An Taoiseach’s salary went from €214, 187 to €200,000 which was a gesture of sorts, but nothing like the €82,000 cut to the French president’s salary introduced by Francois Hollande in 2012 which brought the salary for that post down from €253,000 to €171,000.


And after today’s decline, An Taoiseach will still earn more than his counterpart in the UK, Sweden, Holland, France and Finland. Bigger economies, which are presently bailing us out. And An Taoiseach will still be earning more than double the salary of the prime minister of Spain, which is subject to a bailout of sorts, but which has an economy 10 times bigger than ours and a population 8 times greater.


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John McManus has a column in today’s Irish Times which comments on the report produced by the UK’s Competition Commission last Friday on the so-called Big Four accounting firms – Deloitte, Ernst and Young, KPMG and Pricewaterhouse Coopers. The online version of John’s column omits a table referred to in the body of his piece, and it seems like a very useful piece of information, so it is being reproduced here. Separately the UK Competition Commission press release from last Friday is here and its report for the UK is here.

The Irish Times has a listing – not available online that I can see – called “Top 1,000 Auditwatch” which presumably shows the auditor of the Top 1,000 Irish businesses. And this is what the table below is based on. The second column, “volume” appears straight forward, for example PwC audits 219 out of the 1,000 biggest companies in Ireland. “Value” is more ambiguous and it is not quite clear what value relates to, audit fees or company revenues are two possibilities.


In Ireland’s case, we really have a Big Three – Deloitte has a relatively measly 10% by value. The UK Competition Commission has rejected the more serious of competition concerns, for example, that large audit firms were undercutting smaller firms, but there are concerns which will be further examined, that auditors place management above shareholders when it comes to prioritizing duties; this is rejected by the auditors, but it does have resonance with our experience of failed Irish banks.


In the UK, there is even more concentration than in Ireland. The figures below are extracted from John’s article so blame him for one set adding up to more than 100%!

Finally, it might be worth reminding you of the auditors of our banks during the boom.

You will find a feature blogpost on auditors here.

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Yesterday’s Sunday Business Post reported that the two principal lenders to the Tougher Oil distribution businesses, NAMA and Ulster Bank, had agreed debt writedowns as part of a deal to sell the businesses to Cork-based haulage company, Masterlink Logistics. In NAMA’s case the writedown was reported to be €26m of a €44m loan, and in Ulster Bank – I think they mean Ulster Bank and Bank of Scotland – the writedown is €50m.

Masterlink appears set to take control of the network of petrol stations in and around Kildare, and the fuel distribution business in a deal said to be worth €7-8m.

We find out from last Friday’s edition of Iris Oifigiuil belatedly printed this morning that NAMA last week had receivers appointed to assets of Newhall Business Campus Limited, Newhall Construction Limited. Tougher’s Oil Distribution Limited, Tougher’s Retail Limited and Greenbury Investments Limited. In all cases, Neil Hughes and Kieran McCarthy of Hughes Blake Chartered Accountants were appointed to the assets on 19th February 2013.

The five companies are controlled by the Thomas Tougher (67) and Geraldine Tougher (65).

Whilst Tougher’s Oil Distribution Limited and Tougher’s Retail Limited might be on their way to Masterlink, the fate of the other three companies is unclear.

There is a feature blogpost on Tougher’s Oil examinership here.

Remember you can see the list of NAMA’s enforcement actions here and in this regularly updated spreadsheet.

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