Inside the world of business
Snubbing O’Brien would have been right thing to do
VENTURE CAPITALIST Barry Maloney obviously has his own beef with his former friend and business colleague, Denis O’Brien, but that doesn’t take from the logic of his stance over the Global Irish Economic Forum.
Enda Kenny and Eamon Gilmore have put a lot of work into trying to restore Ireland’s reputation, and the wisdom of having O’Brien at the Dublin Castle event is questionable. Maloney said he was not going to attend because of the findings of the Moriarty tribunal, and it is worth recalling what those findings were.
After its enormously expensive inquiry, conducted at the request of the Oireachtas, the tribunal found that the former minister for communications Michael Lowry “secured the winning” of the 1995 mobile phone licence competition for O’Brien’s Esat Digifone.
It found O’Brien made two payments to Lowry in 1996 and 1999 totalling about £500,000, and supported a loan of £420,000 sterling given to Mr Lowry in 1999. Mr Justice Michael Moriarty found the payments were “demonstrably referable to the acts and conduct of Mr Lowry” during the licence process, acts which benefited Esat Digifone.
The licence granted to Esat was one of the most sought-after commercial licences ever granted by an Irish government and was the foundation for O’Brien’s successful career in international telecoms.
His inclusion at the forum cannot but send out the message that the Government does not take the tribunal’s findings seriously.
The presence of the former US president Bill Clinton at the Castle shindig is an intriguing aspect of the overall scenario. Clinton and O’Brien have both put a lot of effort into assisting Haiti in the wake of the dreadful earthquake there last year. O’Brien funded the reconstruction of a distinctive building that houses the market in Port-au-Prince and its unveiling was performed by Clinton. The reopening of the building on the anniversary of the earthquake received worldwide publicity.
“Denis O’Brien has been a catalyst for many of the good things that have happened in Haiti, both before and after the earthquake,” Clinton said. “Since last year, he has been the facilitator for our Clinton Global Initiative’s [CGI] Haiti Action Network, and to date, CGI members have made more than $224 million in commitments.”
So it would seem the two men are good mates. Snubbing O’Brien when Clinton was due to be a star guest might have been difficult for the forum’s organisers. But it would have been the correct thing to do.
Time on Nama’s side
MICHAEL GEOGHEGAN, the former head of HSBC has spent the last 10 days looking over the National Asset Management Agency and was due to have reported back to Michael Noonan last night.
The news that the agency is being subjected to external scrutiny will have been welcomed by its critics, most of whom feel they should be getting a move on and doing more deals. They would like, among other things, to see the board beefed up with a few experienced international property and banking types.
Whether or not Geoghegan agrees will no doubt become clear. But what can gleaned at this stage is that the Minister for Finance does appear to have a half open mind at least.
Responding to questions in the Seanad after announcing Geoghegan’s appointment he said he was not sure Nama was the correct solution to the problem confronting Ireland in 2008. But he did note that the Bill setting up Nama had secured the support of both houses of the Oireachtas.
The implication being that it represents – after a fashion – the settled will of the people and thus should not be undone lightly.
He was keen also to praise agency staff and noted that “in the last three months Nama has moved more efficiently than was previously the case”. Noonan also seemed to concede that the Government has not made Nama’s job any easier by seeking to abolish upward only rent reviews. Clarity on the matter is seen as a prerequisite to any attempt to price commercial property. An announcement is due shortly, according to Noonan.
This all seems to suggest that Nama may be given more time to prove itself.
Could you credit it?
SO NOW we know. For all their protestations and their demands to be regulated with a lighter touch, some credit unions are almost as badly run and in as poor a position as the banks at which they cavil.
Indeed, as a proportion of the loan book of credit unions, a €1 billion bailout would represent State support of the same level as received by the banks. At least the taxpayer has received a stake in our failed banks; it appears we will have only an outside chance of seeing any return for the bailout of the credit union sector.
The Central Bank says as many as one in five credit unions is what it categorises as “high risk” – meaning they will likely need support and probably a merger. Many of these volunteer-led, local institutions abandoned their small loan remit in the boom years and started funding property deals. Now, with losses trebling over the past few years, as much as 18.5 per cent of the organisation’s €6 billion loan book is in arrears.
A significant number of credit unions have let down their members; if anything all 407 of them should welcome tighter regulatory oversight not rail against it.
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Next week
The Nobel Committee will announce the award for its 2011 prize for economics on Monday. On Tuesday, representatives of the EU-IMF-ECB troika return to Dublin for their latest quarterly review of progress under the bailout plan
