New claims emerging in the Dáil during the debate on the terms of reference of the IBRC investigation have led the Government to commit that all substantive matters raised can be investigated under the extended terms of reference.
So, from what we knew before and what we know now following the Dáil debate, what are the main areas facing the commission?
The deals
The inquiry will examine about 40 deals in which IBRC sold assets, which each led to write-offs of at least €10 million in its books.
A key focus will be Siteserv. The Department of Finance raised concerns about the decision to let the company and its advisers run the process to sell the company, the resulting exclusion of trade bidders, the decision not to accept late bids into the process and a €5 million pay-off to shareholders.
Those involved in the deal say appointing a receiver or putting the firm into liquidation would have immediately destroyed its value, as the firm would have lost big contracts.
They also say the successful Denis O’Brien bid of €45 million was the best one. A venture capital firm, Anchorage, which had originally offered €52 million, put a bid of almost €48 million on the table, after adjustments for various issues relating to Siteserv’s business.
Those involved in selling Siteserv say other issues which Anchorage did not yet know – but which had been negotiated with O’Brien – would have led to a further fall in the Anchorage bid to below the O’Brien level. A late offer from French firm Altrad – which said it would pay up to €60 million – was seen to carry too much risk of not closing.
The commission will have to examine whether it accepts this view, or believes the department was correct to have concerns. It will also consider the €5 million shareholder payout, perhaps the most controversial part of the deal.
One new issue which emerged during the latest Dáil debate was when Sinn Féin finance spokesman Pearse Doherty said he understood there had been an agreement between O’Brien and IBRC that more than 90 per cent of any dividends from international telecoms firm Digicel, paid to O’Brien, would go to pay down IBRC debt.
However, Doherty said IBRC had received 65 per cent of a $300 million dividend paid in early 2012, with the balance going to repay a Bank of Ireland loan linked to the Siteserv deal.
In examining Siteserv and the other deals – a number of which were also of concern to the department – the commission will have to make a call on the processes and decisions made and on political and civil service oversight.
Borrowers
The controversy expanded after Independent TD Catherine Murphy told the Dáil her information was that businessman Denis O’Brien benefited from an interest rate of 1.25 per cent on borrowings.
O’Brien has said her information is incorrect and Doherty quoted a figure of 3 per cent in the Dáil this week. Further claims were made by the Sinn Féin spokesman. He outlined details of meetings which he said O’Brien had with IBRC staff through 2013, after the bank was liquidated.
O’Brien claimed to have had a verbal agreement with the former IBRC management, led by Mike Aynsley, to extend his loan terms. Doherty said his information was that the O’Brien loan was eventually extended, but the IBRC special liquidators have said Doherty’s information was incorrect.
The commission will be charged with examining whether any borrower got an unduly favourable deal from Anglo/IBRC. This will not be easy to assess, as typically big borrowers would be charged a variety of rates depending on the circumstances.
Minister for Finance Michael Noonan said Doherty’s reference to a verbal agreement with former IBRC management would be investigated, even though it was discussed in meetings with IBRC after the bank’s liquidation and thus after the end of the specified period for examination.
It is not clear to what extent the commission will be able to investigate the actual management of loans by the special liquidator. This was done under rules set down by the Department of Finance and involving frequent briefing meetings between it and the liquidators.