Cantillon

Inside the world of business

Calling those involved in Bloxham to account

The failure of Bloxham Stockbrokers raises so many questions of so many parties that it’s hard to know who dropped the ball.

The partners have questions to answer for not scrutinising the accounting of financial partner Tadhg Gunnell more closely and for not spotting discrepancies in the books that have left the firm with a black hole of €5.3 million.

Then there is the Central Bank and the firm’s external auditor, Deloitte, where Gerry Fitzpatrick was the partner in charge of the audit. They carried out checks on the books of the stockbroker over the years that the irregularities are reported to have occurred.

Bloxham’s partners face a significant bill, and the firm’s deficit could rise further following litigation next month over massive losses on the Saturn investment bonds and claims of €20.5 million from out-of-pocket investors.

The firm is a limited partnership but insurer FBD is the only limited partner. The seven individual partners – Pramit Ghose, Niall Tinney, Raymond Deasy, Patrick Finnegan, Patrick Dempsey, Peter Costigan and Tadhg Gunnell – and unlimited liability companies set up for each of them are general partners of the firm. The firm’s profits were shared among their companies.

Staff at the firm are furious for various reasons. They were told on Monday by Ghose that they would be paid their June wages, only to be told yesterday that 49 of them were being laid off with nothing more than statutory redundancy.

Liquidator Kieran Wallace of KPMG is rehiring 14 and possibly 15 to manage the firm’s wind-up.

The employees are also apoplectic that 21 staff (it was said by the firm to be 25 on Monday) are moving to rival stockbroker Davy following its purchase of two of the businesses, when some staff with more than 10 years’ service are leaving with virtually nothing.

They were also angry to learn from the affidavit of partner Patrick Dempsey in the liquidation petition to the High Court on Thursday that the firm made €5 million in “profit available to partners” in 2009. Early that year staff were asked by the firm’s partners to take voluntary pay cuts of up to 20 per cent.

What a mess.

Are we there yet, Appleby and DPP?

The investigations into Anglo Irish Bank have been “almost complete” for more than a year now, so yesterday’s pronouncements from the Director of Corporate Enforcement and the Minister for Justice that the investigations were almost there shouldn’t lead to national euphoria.

Corporate enforcer Paul Appleby was asked about Mr Justice Peter Kelly’s comments earlier this year concerning the slow pace of the investigation. It was “a matter of some understandable disappointment”, he said, but he hoped the judge would be happy with the progress made when the ODCE is in court again on July 28th.

Appleby requires High Court approval to retain files seized from the bank for his investigation.

It has been 40 months since that famous Garda raid on Anglo’s offices on St Stephen’s Green in Dublin, and the only real public progress reports that investigators give is on the number of files and volume of documents sent to the Director of Public Prosecutions, Claire Loftus.

Appleby said that “a very substantial amount of material had gone to the DPP’s office”. This comprised about 150 lever-arch files of documents from the ODCE and the Garda, he said. The DPP was “very much engaged in evaluating that material” and was taking legal advice, he added.

About a third of the ODCE’s staff, or 16 officials, are working on the investigation.

Minister for Enterprise Richard Bruton welcomed the fact that Appleby had sent nine files to the DPP but said the matter was now in the DPP’s hands, and Loftus was “legally independent and it is for her to decide what, if any action, she considers appropriate”.

So now this political hot potato has been passed to the DPP. Loftus’s lawyers told the High Court last January that her office might decide within weeks whether to bring charges arising from the Anglo investigations.

Weeks have turned into months and no charges have yet been brought. The waiting game on Anglo prosecutions continues.