Opinion/Bill Murdoch: The old saying "what goes around, comes around" has some poignancy, right now. There are some high-profile examples; some have happened, some are brewing.
The Revenue's pursuit of tax wrongdoers adds a lot of credence to the adage, but not for all the defaulters. Monday's deadline with a whopping 15,000 holders of offshore accounts promising voluntary disclosure shows that the day of reckoning is coming full circle for many people.
With such large potential liabilities, these culprits will have to watch their spending. Is that why some tours such as trips to operas in continental Europe have had to be cancelled? It may well affect other selected areas of the luxury market as well.
A welcome move is the renewed focus on the status of tax exiles. Initial work has commenced on high-worth individuals who make declarations under the tax exiles legislation. At the moment they enjoy substantial benefits; they can spend 183 days in the State but if they come on an executive jet for the day, and leave by midnight, that doesn't count. That rule is clearly designed to benefit the high net worth individuals. It badly needs to be changed.
The high profiles such as bogus non-resident accounts, the Ansbacher debacle and National Irish Bank's CMI bonds have netted the Exchequer more than €1 billion and have been well documented in this newspaper.
And the Revenue has been very active in a number of other areas as well. This includes building up a register of high earners' visible assets and putting a value on them with their owners having to explain how they were paid for. The circular net is tightening.
Barlo, is also a typical case of what goes around comes around. Dr Tony Mullins's attempt to buy back the company on the cheap was apparently transparent to almost every one except himself. The non-executive's directors' despondency with the company's future almost led to a give-away, but the 48 cent per share offer by Quinn Group, though not overly generous, put paid to that. It would be easy to write off the episode now. However, it hasn't really come round the full circle.
A provision in the now defunct 40 cent per share offer by Melgan (Dr Mullin's takeover vehicle) allows that company to claim third party costs and out of pocket expenses in connection with his offer.
The offer document says such payments are due provided the independent directors withdraw or modify their approval of the original Melgan offer, or if prior to the (Melgan) offer lapsing, or being withdrawn, a competing offer is announced and that that offer becomes, or is declared unconditional in all respects.
That means that the failed bid by Dr Mullins' Melgan had limited downside potential. In other words, Barlo pays for much of the failure. Surely that is not equitable? Should Dr Mullins not have paid for all the costs associated with that offer?
It is pretty ironic that the independent directors (who advised acceptance of the Megan offer and subsequently went for the Quinn offer) considered this "expense reimbursement agreement...is in the best interests of the Barlo shareholders".
With Quinn effectively taking over this liability, existing shareholders will not be affected. Nevertheless, MBOs should not be allowed to have this safety net. It was approved by the Irish Takeover Panel but this is discriminatory as it favours the MBOs over outside bidders who normally have to bear all their own costs.
This, of course, is not the ideal conclusion for the Barlo shareholders, but it is better than the cocktail brewed by their managing director.
Another company continuing to try to square the circle is Bula Resources. It is already being investigated by the Director of Corporate Enforcement, but in a more visible move it has now been placed in liquidation by Computershare Investor Services.
What is surprising about the initial statement (www.liquidations.ie) by the liquidator, Mr Jim Stafford is that it has cash of €254,212 in its balance sheet. Apparently this is what is left from the €350,000 it received as part repayment from €1.5 million deposit, involving an investment in Bahrain, paid by the company when Mr Albert Reynolds was chairman and who did not seek re-election at the company's annual general meeting in September, 2002.
What has rightly irritated the 45,194 shareholders is that prior to this investment, the company had €1.8 million in its balance sheet.
The liquidator's remit is limited under company law. His section 56 report to the Office of Corporate Enforcement (to establish if directors are fit for directorships in this State), for example, only covers the directors (Mr Omar Yazigi, Mr Tom Kelly and Mr Timothy Torrington) who were in position 12 months prior to his appointment. It does not cover the previous period which included the resignation of Davy Stockbrokers, but he can incorporate his views in a report.
The sole remaining director, Mr Omar Yazigi, a Syrian with a residence in Longford, has been ordered by the High Court to submit a sworn statement of affairs to the High Court by April 5th.
Considering that the last accounts were for 2001 and that a note with those accounts quantified liabilities of €462,000 against guarantees which the liquidator said "were purportedly provided to all of its Irish incorporated subsidiaries" in 2001, that statement should be revealing. But it is unlikely that the issue of the €1.5 million will be firmed up by then so there will continue to be an unresolved cloud over the company until it does.
There will be little peace in the camp of 45,194 Bula members until they see "what goes around, comes around". That is unlikely but if the investigations, now under way, cast meaningful illuminations, on culpability, if any, and the real reasons for Bula's collapse, then they will have proved worthwhile.
