Calling time on Dublin Gas - 20 years on

A quarter century after putting £300,000 into the group, Donal Kinsella will next week petition the High Court to have the company wound up. Una McCaffrey reports

Donal Kinsella is a man who understands patience more than most. A quarter century after pumping the then-mighty sum of £300,000 (€381,000) into Dublin Gas, he will next week petition the High Court to have the company wound up.

The request comes 20 years after the company went into receivership. This is a long corporate wind-down by anybody's standards, with the nature of Dublin Gas's demise also marking the case out from others of the type.

The story will be familiar to anyone who paid attention to the news or to politics in the dark economic days of the 1980s. It held its own in headlines for some years, particularly in 1986 and 1987 when its takeover by the Bord Gáis, with the support of the then minister for energy, Dick Spring, was being prepared. Since then, however, the tale has faded into the background, with all seemingly happy to leave it there apart from Kinsella.

Dublin Gas, as an entity, dates back further than living memory, having been founded in the first half of the 19th century by Daniel O'Connell.

It lived rather quietly until the start of the 1980s, when it attracted the attention of two entrepreneurs: Kinsella and John Teeling. The two wanted to take over the company and between 1981 and 1982, Louth-based Kinsella built up a stake of 23 per cent. A takeover did not materialise, but he became a director of the company towards the end of 1982 and set about modernising it from within.

Within a handful of years, however, he was forced to relinquish any control he might have had since then, his investment has lain unrewarded.

The problems encountered by Kinsella at Dublin Gas were manifold and were probably compounded by his reputation as a corporate raider.

His motives at the time were in no way mysterious - he and Teeling eyeing the probability that natural gas, discovered in the Celtic Sea in 1973, would sooner or later be brought to Dublin by Bord Gáis. This might, in time, spur the State to buy the company.

The two were also considering how they might be able to run fibre-optic cables through the thousands of miles of gas pipes that lay beneath Dublin city.

While fibre-optics were then a little ahead of its time, the delivery of natural gas to the capital did occur. Unfortunately for Kinsella, it did not quite create the bonanza he had expected.

As for Teeling, the exploration expert had exited the scene soon after getting involved, by selling his stake to Irish Life at a profit.

Where things got complicated for Kinsella was in the investment that the delivery of gas to Dublin would require.

It needed a substantial extension of the company's network that saw banks and other institutions invest £70 million in the company through complicated financial instruments.

It also saw Bord Gáis allowing Dublin Gas rebates of about £61 million on the price of gas sold to the company. Under the terms of these arrangements, the minister for finance was granted a 25 per cent shareholding in Dublin Gas, 30 per cent of voting rights and 56 per cent of dividends paid.

This allowed the government to appoint a chairman and three other directors to the company.

On top of this, in 1984, Bord Gáis was granted a debenture to secure its debt. Within two years, this debenture would be called in and Bernard Somers, the well-known accountant, appointed as receiver. In 1987, Somers presided over the sale of most of Dublin Gas's assets to Bord Gáis, but the receivership itself did not come to an end.

In 1992, Kinsella brought an action seeking information about the case but didn't get anywhere. He sought more information in 1998 but, in 1999, was refused in the High Court.

He was, however, told that in 1994, there were 60 claims outstanding against Dublin Gas as a result of an explosion at Raglan Road in Ballsbridge. Last year his solicitors, Ward & Wall, sought more clarification and, according to documents lodged with the court, were told that correspondence was still ongoing with the Revenue Commissioners and with loss adjusters.

Earlier this year, Kinsella's solicitors asked when the receivership might come to an end. They were told there were no funds available for distribution and that it would be "pointless to indulge in further correspondence".

This brings us to the latest petition, which is due to be heard on Monday but is likely to be adjourned for a fortnight with the consent of both parties.

The issue of assets that might be available to shareholders is a thorny one, with Kinsella (the only shareholder who seems to take an interest) essentially in the dark when it comes to the facts.

In court documents, he professes an awareness that that the receiver had £1.1 million in cash in 1993 but this is the extent of argument on finances. Instead, Kinsella focuses on the time that has passed since Somers was appointed. Surely, he suggests, enough time has passed to complete the receivership.

He wants another accountant, Martin Ferris, to be appointed as liquidator. It is unclear at this stage how the receiver, or indeed the court, will react to his request. What is more certain is that the very hearing of the petition will dredge the memories of all involved in the downfall of Dublin Gas in the 1980s. They will doubtless try to recall exactly what went wrong with the company in the first place.

Kinsella, again in court documents, puts Dublin Gas's demise down to volatile oil prices and uncertain market conditions, which in turn made it impossible for the company to service its debts. There is a lot to this, but other observers of the period suggest the decline could also have something to do with unrealistic targets Dublin Gas may have set for itself. Perhaps Kinsella was a man in a hurry, but Dublin Gas itself was in less of a rush. One observer describes it as a "sleepy, dreary company".

In understanding the State's response to Dublin Gas's problems, it is also important to appreciate the atmosphere at the time. The Republic was not a wealthy place, yet here was a young businessman who had £300,000 to invest. Was he simply a carpetbagger? Those around at the time say there was certainly a suspicion that this was the case and the idea would not have been palatable to the Labour/Fine Gael government in power at the time.

More right-wing observers also suggest that Dick Spring and Bord Gáis had an appetite for a nationalisation on the cheap instead, although this motive could never be proven.

Kinsella would certainly argue, however, that the State made no particular effort to assist Dublin Gas as its problems mounted. Meeting after meeting with government officials was documented as Dublin Gas sought to amend its supply agreement with Bord Gáis, but nothing came of the effort.

The receiver's appointment was announced over the radio on April 11th, 1986. Since then, Kinsella, a successful businessman with numerous other interests, has been ploughing a lonely furrow at Dublin Gas.

"It was a big gamble that just didn't pay off," is the analysis of one who watched the events. Kinsella may well agree, but he may also argue that the bet has not yet been settled.