New rules seek to prevent conflict of interest on sale of State assets

Thu, Aug 2, 2012, 01:00

NEWERA, THE agency charged with overseeing the sale of certain State-owned assets, has issued a protocol to govern contacts between parties interested in purchasing the assets and Government ministers, department officials and their advisers.

This is designed to avoid potential conflicts of interest or suggestions of bias or interference in the sale of the assets, thus avoiding a repeat of the controversies that have dogged previous processes, notably the awarding of the second mobile phone licence to Denis O’Brien’s Esat Telecom.

NewERA’s rules state that while it is useful to meet parties to get their views on the sale of assets, it is “appropriate that a more structured, formal process of engagement” with participants and their advisers should be put in place rather than contacts taking place on an “ad hoc” basis.

The protocol states that this is important in terms of the Government presenting a “single, consistent and coherent front” to potential buyers while also “safeguarding against potential future claims of preferential access or unfair procedures from unsuccessful bidders for the assets”.

It sets out the “policy for engagement with market participants and advisers, and the procedure to be followed when requests for meetings are received” from interested parties.

NewERA defines these as being from the banking, financial, legal, PR, management consulting or any other kind of professional services companies; and/or any individual or organisation that could be a potential bidder.

This will apply to meetings where the “principal purpose” is to discuss the potential disposal of any or all of the State assets that have been put on the blocks.

In future, meetings between a market participant and/or their advisers with a minister, department official or their advisers, will have to be arranged with NewERA.

“It is strongly advised that ministers and political advisers should not engage directly with any market participants and/or their advisers, in view of the potential for any such meetings (or the lack of such meetings, as the case may be) to be misinterpreted as having had an influence on the outcome of the disposal process,” the protocol, which has just been published, the protocol states.

Any Government official, or adviser to any minister or department, who receives a request for a meeting must inform the party to contact NewERA.

NewERA will co-ordinate the arrangement of meetings and keep a record of the parties who requested them, the names of those its meets with and a summary of the key issues discussed. These details will be circulated to relevant departments on a “regular basis”.

In the event that a request for tender has been issued for the provision of services to assist in the sales process, “it is important to ensure that there is no engagement on, or discussion about” the process or transaction involved with interested individuals or organisations, NewERA states.

The protocol follows on from the Government’s decision in February to proceed with the sale of certain assets, as per an agreement with the EU-IMF-ECB troika. NewERA operates under the umbrella of the National Treasury Management Agency.