Cantillon: IBRC liquidators face tough questions

New structure to be put in place to manage any perceived conflict of interest arising from litigation

Kieran Wallace of KPMG. Photograph: Brenda Fitzsimons

Kieran Wallace of KPMG. Photograph: Brenda Fitzsimons

Sat, Mar 1, 2014, 01:00

The special liquidators of the Irish Bank Resolution Corporation came in for sustained questioning, and some gruff commentary, when they appeared before the Joint Oireachtas Committee on Finance, Public Expenditure and Reform during the week.

Messers Kieran Wallace (above) and Eamonn Richardson, of KPMG, were questioned about the perceived conflict of interest that might exist arising from the fact they are suing the former auditors to Anglo Irish Bank – Ernst & Young – but not the former auditors of Irish Nationwide – their own KPMG.

Wallace – who took most of the questions during the long afternoon – pointed out that the decision on who to sue was taken before their appointment as liquidators, and was in the first instance taken by the board of Irish Nationwide.

However, he did say a new structure was to be put in place to manage any perceived conflict of interest arising from the litigation, and that the decision as to who to sue would be reviewed in that context.

The bulk of the questioning concerned the sale of the Nationwide mortgage book and, in particular, the fact that people who held such mortgages were not allowed bid for them while unregulated, foreign entities that would not be covered by certain Irish consumer protection measures, would.

The committee was told a high proportion (86 per cent) of the 4,175 private house mortgages that are in arrears, have concluded, or are in the process of negotiating, a restructuring deal, and that the honouring of these deals would form part of the contract for the loan book sales (should they occur).

There were 33 loans, out of the entire IBRC portfolio of loans, where the owners of the loans were allowed make bids. The bulk, if not all, of these were trading businesses, with significant numbers of employees, Wallace said, and as far as he could recall, none were property developer loans.

The sale of these 33 loans in this way had arisen following advice from consultants engaged by the liquidators, and representations from the original owners of the loans, including evidence they could execute a deal.

Some of the 33 loans had been sold and some have not yet been, and of the former category, 60 per cent were bought by their original owners and 40 per cent went to other parties because the original owners were outbid. In all instances, there were other parties bidding against the original owners, and good prices were achieved as a result, Wallace said.

Reflections on the glass ceiling
Some day, society will reach a point where glass ceilings are consigned to nightclubs and we no longer bother to work out how well (or badly, more usually) women are represented in senior positions. For now though, the research is still needed and progress on equality at work is still far from rapid.

The latest useful contribution in this regard comes from the US, where a trio of academics (two of whom work in Spain) have asked “Who’s got those top jobs?” in a piece published by the Harvard Business Review. The answer, based on a survey of the Fortune 100 companies, is men, mostly.

The good news is that the percentage of women holding the top 10 roles in the biggest companies rose quite dramatically between 2001 and 2011 – from 11 per cent to 17.7 per cent. Hurrah for that, but perhaps not for the fact that 17 of the 100 biggest US firms still have no women in their most senior positions.

Digging down a little, we find the senior women in 2011 had reached their roles about three years earlier in their careers than their male equivalents, but that still only 5 per cent had “risen to the very top”, compared to 17 per cent of the men in the survey.

We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.