Alan Dukes stands over ‘judgment call’ on Siteserv sale

Former Irish Bank Resolution Corporation (IBRC) chairman Alan Dukes has said he does not believe businessman Denis O'Brien was given an interest rate as low as that claimed by Independent TD Catherine Murphy.

Mr Dukes reiterated his view that Ms Murphy was wrong in her assertions made under Dáil privilege in which she claimed Mr O'Brien was afforded an interest rate of 1.25 per cent "when IBRC could, and arguably should, have been charging 7.5 per cent".

Mr O’Brien has contested the accuracy of statements made by Ms Murphy, but has not given any information as to what rate he was paying IBRC.

Speaking on RTÉ's Saturday with Claire Byrne programme, Mr Dukes would not be drawn on what specific interest rate was applied to Mr O'Brien's loans. However, he said he did not think the interest rate could have been as low as Ms Murphy stated.

Market rate

Ms Byrne suggested to him that the market interest rate at the time was 3 to 4 per cent given the cost of borrowing for IBRC.

When asked if anybody would have been on a lower interest rate than 3 per cent, Mr Dukes responded: “I don’t think so. Everybody was given a different interest rate. A great deal depended on the interest rate on the original loan. We were dealing with a body of loans that existed when the bank had been nationalised - a whole set of relationships.”

He described the sale of Siteserv as a "judgment call" that he would stand over. The decision was made that IBRC would accept the bid made by Mr O'Brien's firm Millington though a rival bid had offered more money.

He said the alternative bid had “much more conditionality and much less certainty to it. If we allowed a new bid during a period of exclusivity, the bid that we were disposed to take would have walked away and the late bidder would have been in a better position to get a deal from the bank.

“I don’t think people who were not there are in a possition to second guess a judgment call that was made. At the end of the day, it comes to a point where you make a judgment call on the basis of a commercial judgment.”

Not popular

Mr Dukes said he was not popular with the Department of Finance for being the "bearer of bad news" that IBRC had a solvency problem not a liquidity problem and would require much more money than was first mooted.

Mr Dukes accused the Minister for Finance Michael Noonan of "unaccountably" suggesting there was criminality and wrongdoing when he announced the terms of reference for the setting up of an inquiry into IBRC transactions in February 2015.

“I was furious when I heard that an issue of that kind was raised,” he said. “Frankly, I think he has been badly and partially advised by a number of people in his department.”

He criticised the former secretary general of the Department of Finance John Moran for a letter which wasn't send in which Mr Moran accused him of making suggestions that were"unfounded, argumentative and unhelpful".

Mr Dukes said he refused Mr Moran’s request to sit on the board of the IBRC on the basis that he would be “seriously conflicted”.

“I said no because ‘even if you were on the board I wouldn’t treat you any different to another director with the exception of the CEO who is in a different position’.”

He said Mr Moran had also suggested that a number of people on the board should be removed and replaced by others. “I asked him why. He said that those people were appointed when the bank was a going concern and they may not have the mindset for a wind-down bank.”