THE SUPPORTING CAST: DERMOT DESMOND:The man credited with the IFSC idea has featured in two major controversies
FINANCIER DERMOT Desmond (61) is a successful businessman who is credited with the idea of establishing a financial services hub in Dublin’s Docklands.
The Irish Financial Services Centre (IFSC), which was set up after then Fianna Fáil taoiseach Charles Haughey adopted Desmond’s plan in 1987, has created thousands of well-paid jobs and been a substantial contributor to the Irish economy.
Desmond has been a controversial figure in the worlds of business and politics, and has featured in two of the major business and political controversies of the past two decades.
In October 1991, a company law inspector, solicitor John Glackin, was appointed to investigate certain complicated dealings involving Desmond and the purchase and sale of the former Johnston Mooney and O’Brien site in Ballsbridge, Dublin.
Although Desmond had represented himself as an intermediary in the sale, Glackin’s report said Desmond and Limerick businessman JP McManus were the major beneficiaries of the sale. The site was sold for £9.4 million to State-owned Telecom Éireann, twice the price that was paid for it one year earlier. Desmond disputed Glackin’s findings.
One of the companies involved, Freezone, had an account with the TSB on Grafton Street, and it was disclosed that Desmond had at one stage withdrawn £500,000 in cash from the account, which he said he held in a tennis holdall.
During the proceedings of the Moriarty tribunal it emerged that money from this same account had been used when Desmond, during 1990 and 1991, paid for refurbishment work on the Haughey family yacht, the Celtic Mist. The total sum given, £75,000, exceeded Haughey’s then salary as taoiseach. The tribunal did not accept Desmond’s evidence that the payments were loans.
The first report from the Moriarty tribunal, published in December 2006, dealt with payments from Desmond to Haughey in the early to mid-1990s after Haughey had left office.
Desmond told the tribunal the payments, of £100,000stg in 1994 and £25,000stg in 1996, were loans, but the evidence was not accepted by Mr Justice Moriarty.
Desmond was educated at Scoil Mhuire, Marino, Dublin, and at Good Counsel College in New Ross, Co Wexford. After school he began working in banking, and at one stage worked for the World Bank in Afghanistan. He left when the Soviet army invaded.
In 1981 he founded National City Brokers and he grew the business to become Ireland’s largest independent stockbroker.
In 1994 he sold NCB to the National Westminster Bank (now The Royal Bank of Scotland) for a substantial sum. At about the same time he became non-resident in Ireland for tax reasons.
He established IIU Ltd and began what has been a spectacularly successful series of investments that have seen his wealth grow to the €1 billion mark and probably beyond.
There is no particular pattern to his investments. He has been involved in technology, sporting and betting ventures, an airport, Esat Digifone (he made a profit of more than €130 million from that alone), banks and resource companies.
In 2007 he was awarded an honorary doctorate of laws by University College Dublin, as well as the college’s Ulysses Medal, its highest honour.
Desmond was one of a group of 17 prominent business and public figures who recently published a document calling for extensive political and economic reform. Other members of the Ireland First group included Rehab chief executive Angela Kerins, former tánaiste Dick Spring, former European commissioner Peter Sutherland, businessmen Philip Lynch and Seán O’Driscoll, and Cork-based developer Michael O’Flynn.
