The Siteserv scandal returns

As Socialist Worker goes to press the Denis O’Brien Siteserv scandal is growing by the day.

Socialist Worker 379

The Siteserv scandal returns

As Socialist Worker goes to press the Denis O’Brien  Siteserv scandal is growing by the day.

As a result of persistent questioning by Kathleen Murphy TD more information about this dodgy deal is coming out and demands for a full public inquiry are mounting. Enda and Co. are clearly on the back foot. But the story is not new. We reprint here the report on the scandal posted by Socialist Worker’s Kieran Allen three years ago on 17 May 2012.

Fine Gael’s favourite businessman, Denis O’ Brien, has moved into the water metering business. The move comes ahead of a new offensive by the government to meter as many houses as possible before charging for water.

O’ Brien paid €45 million to take control of Siteserv, a company which has been described as an ‘infrastructure and utilities support services’ business. But one its divisions is in civil engineering and includes ‘water networks rehabilitation / water meters’.

O’ Brien’s deal has already run into considerable controversy. The company had reported debts of €144 million and one of its chief lenders was Anglo-Irish bank.

This toxic bank, which has swallowed up over €29 billion from the taxes of Irish people, agreed to write off debt to facilitate the purchase by O’ Brien. It is believed that just over  €100 million was written off.

Siteserv itself describes what happened, ‘Anglo Irish or IBRC agreed to accept payment of an amount which is less than the full amount owed by the Group.

‘Without this agreement from IBRC the proposed disposal would not be capable of implementation and it is likely that Shareholders would not have realised any return on their investment’.

But this only begs the question: why should shareholders of an indebted company ‘get a return on their investment’ when they owed millions to a state owned bank?

The total pay out to shareholders of Siteserv amounts to approximately €5 million. But why was this money not gathered in to help pay off Anglo’s debt?

Other aspects of the deal are equally intriguing.

Rival

A rival French company, Altrad, has claimed that it was denied an opportunity to make an offer for Siteserv even though it was prepared to pay €60 million for the company.

One of its senior executives even attended a recent Siteserv shareholders meeting to inform the gathering that they had been kept in the dark about the deal.

“Right the way through January and the middle of March we were told very clearly… the company was not for sale… and don’t worry, if there was anything coming out I’ll come and talk about it”

Mr Neilson, the Altrad executive said. They never heard back.

Siteserv’s main line of business has been to rely on state contracts. One of its brand companies, Sierra, has already received considerable money from the ESB and Bord Gais.

O’ Brien will now be hoping that profits can be made for his new acquisition from water metering.

Up to €1 billion of state money is due to be invested in private meters. This is money that could have been much better used to fix the leaking pipe system which looses up to 40% of treated water.

But metering makes way for privatisation – and more profits for the likes of O’ Brien.

Which is why Fine Gael and its former chief fundraiser, and current environment Minister, Phil Hogan, like it best.

O’ Brien’s links with Fine Gael

Between March 1995 and June 1996 Denis O’ Brien (or one of his companies) supported 14 Fine Gael fund raising events at which £22,140 was handed over to the party either personally of through a corporate vehicle.

Last year the Moriarity tribunal, which was set up to investigate payments to politicians found that Mr O’Brien made or facilitated payments to Michael Lowry (a former FG minister) of a combined €572,000 and supported a loan for a further €503,000 and observed.

“It is beyond doubt that…Mr Lowry imparted substantive information to Mr O’Brien, of significant value and assistance to him in securing a Telecom’s licence.”

Despite this O’ Brien’s connections with Fine Gael continue to this day. Enda Kenny recently appeared with him at the New York Stock Exchange and has defended his participation in other forums.

Unperturbed by any criticism O’ Brien has recently been attempting to gain control of the media.

To this it can now be added that the Siteserv deal is part of a pattern. In recent years Denis O’Brien has also received write downs when buying Topaz and the Beacon Hospital. No wonder he’s one of Ireland richest capitalists, whose fortune has risen massively during the austerity years.

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