The judge investigating the Siteserv affair has found that the company's chief executive had a "concealed financial interest" in Denis O'Brien's successful bid for the business.
Brian Harvey – a Siteserv co-founder – backed Denis O'Brien's proposal after negotiating a significant shareholding in the billionaire's new company if his bid won, Mr Justice Brian Cregan said.
The judge circulated a confidential draft of his final report to witnesses on Thursday, giving them two months to respond to conclusions about the 2012 Siteserv sale that involved a big writedown of loans from Irish Bank Resolution Corporation, the State-owned former Anglo Irish Bank. The commission of inquiry has spent seven years investigating the deal and key witnesses are certain to certain to oppose its findings in forceful terms.
“The commission has found that at key stages in the sale process, Mr Harvey improperly favoured Mr O’Brien’s bid and put his own personal financial interests ahead of the interests of the company and its main creditor, the bank,” said the draft report.
Critical
Mr Harvey declined to comment. Key witnesses to the long-running inquiry are known to be heavily critical of the judge’s process, the advice he took, his draft findings and the amount of time spent on the investigation.
Some witnesses have argued that the Siteserv sale as it unfolded was in line with the way business deals are done and that public procurement rules did not apply. They have also argued that Mr O’Brien’s bid had the best chance of execution because his preparations were more advanced.
Rival bidder Anchorage had indicated it would pay more for Siteserv, a building services business then in serious financial difficulty, but advocates for selling to Mr O'Brien found his deal was better for the company and its staff.
In draft conclusions over several hundred pages, Mr Justice Cregan said engagements between Mr Harvey and his adviser Niall McFadden – another Siteserv co-founder – with a representative for Mr O’Brien were not disclosed to Siteserv or its advisers.
“It is, in the view of the commission, one of the extraordinary features of the Siteserv transaction that the two co-founders of the company – Mr Harvey and Mr McFadden – emerged from the transaction with a combined 15 per cent interest in Mr O’Brien’s new company without the knowledge of the board of directors of Siteserv . . . the sale sub-committee . . . the company’s advisers . . . or the bank at any stage before the Siteserv share purchase agreement was signed on 15 March 2012,” the draft said.
