‘Untrue board minute’ gave Siteserv co-founder significant tax advantages - inquiry

Denis O’Brien’s adviser Dermot Hayes signed an “untrue board minute” to backdate a key contract giving “significant tax advantages” to Siteserv co-founder and chief executive Brian Harvey, a High Court judge has found after a seven-year inquiry into the affair.

Mr Justice Brian Cregan described as “complete contrivance” the minute prepared by another Siteserv co-founder, Niall McFadden. The document was part of an arrangement in which Mr Harvey avoided paying any income tax, universal service charge (USC) or PRSI on his salary after Mr O’Brien bought Siteserv, a building services business.

“This draft minute was a complete fiction. It referred to a board meeting that never took place, a discussion that never occurred and a resolution that was never passed,” the judge said in his 1,500-page report.

“The board minute of 1 June 2012, which was signed by Mr Hayes on 22 November 2012, based on Mr McFadden’s draft board minute, was untrue in all its particulars.”

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Mr O’Brien’s spokesman had no comment on Mr Hayes, there was no comment from Mr McFadden and Mr Harvey did not answer a call.

The inquiry, established in 2015 amid political disquiet over Siteserv, also found that Mr McFadden “did not disclose assets” to a key court official in his bankruptcy process.

The Government said the report “shines a light on unacceptable practices by certain parties” during the €45 million deal in which the nationalised Irish Bank Resolution Corporation wrote off €118 million of Siteserv’s €150 million debt.

The transaction was based on “misleading and incomplete information” that Siteserv provided to IBRC, the judge said as he criticised a process “below the surface” in the deal.

Siteserv was supposed to be the first of 38 IBRC transactions for examination. The judge is due to report to the Government in October on the others. But close observers believe the years taken on Siteserv mean there is little prospect of the inquiry proceeding to investigate more deals in detail.

Asked about criticism of the inquiry’s duration, Taoiseach Micheál Martin said: “We simply have to go back to the drawing board and look at the models because it’s not satisfactory that seven years on, and remember seven years on we’ve dealt with one module and if I recall back in 2015, there was quite a number of modules that people wanted.”

Mr O’Brien said the report showed there was “no basis in fact” to serious allegations levelled against him in the Dáil by Catherine Murphy of the Social Democrats. The judge rejected claims he received a “favourable interest rate” from IBRC.

But Ms Murphy said the report’s findings about the deal were a “clear vindication” of her decision to raise issues about the deal under Dáil privilege.

Robert Dix, a former Siteserv senior independent director who was criticised in the report, said he and the board acted “entirely in the best interest” of the business and secured the “best commercial deal” available at the time.

“In 2012, we were weeks away from being wound up and that would have resulted in 2,000 jobs lost and hundreds of creditors unpaid.”