Success for Quinlan - but is he happy?

Current Account:The search for happiness seemed to be all the rage this week, from the launch of the Labour Party's billboard campaign - But Are You Happy? - to the address by Derek Quinlan to a lunch hosted by the Leinster Society of Chartered Accountants.

The banking hall in the Westin Hotel was full and Quinlan was told that such was the interest in hearing him speak, that the capacity of the hall was the only thing preventing even more guests attending.

Quinlan spoke of how, in his former days as a Revenue official, he had been happy but restless. He had not wished to live a life of quiet frustration, so took a gamble and set out on his own with his Quinlan Private investment advice group. The group has grown hugely over the past 17 years and now employs 100 professionals from "Warsaw to New York", and has "significantly more" than €500 million in assets under management. There was no doubting Quinlan's achievement or wealth - but what the people in the hall wanted to be told (and thought they knew), was this: is he happy now?

No dream start for Houghton Mifflin plan

The last thing that Riverdeep chief Barry O'Callaghan would have wanted in the weeks after his giant buyout of Houghton Mifflin was the resignation of his own company's auditor, Ernst & Young. O'Callaghan was at pains to make light of the development, but the manner of the auditor's resignation left him with little choice but to convene a conference call on Monday for more than 160 of his lenders, investors and creditors. Ernst & Young said its relationship with Riverdeep collapsed due to "incorrect representations" from the software firm. In addition, the auditor said such circumstances should be brought to the attention of stakeholders.

At issue was the accounting treatment of revenues from Riverdeep's contract with the firm that supplies its software to US retailers. This led to a €1.6 million correction to Riverdeep's books for the 12 months to last September. While the Houghton Mifflin deal had not taken effect at that time, O'Callaghan said the adjustment represented less than 5 per cent of turnover of the enlarged group. In his own account, this "immaterial" matter will have no bearing on the organisation's prospects.

That may be so, but it begs the question as to why Ernst & Young went so far as to point it out in such explicit terms in its resignation letter. O'Callaghan took "corrective action" after investigating the issue, but not even that was enough to spike the gun of Riverdeep's auditor for many years. To Ernst & Young, the matter doesn't seem to have been "immaterial" at all.

Houghton Mifflin was by far the bigger party in the reverse takeover so it was always likely that its own auditor, PricewaterhouseCoopers (PwC), would get the audit contract for the enlarged group. If that means Riverdeep's contract with Ernst & Young was near its end anyway, neither side can be pleased with the way in which the relationship closed.

O'Callaghan did a stellar job persuading some of the world's biggest banks and some of Ireland's wealthiest investors to back the Houghton Mifflin deal. He says the business plan is already ahead of schedule, but it's hardly a dream start.

Another big cast

Still with Ernst & Young, the firm will not be a beneficiary of Smurfit Kappa's flotation when the packaging empire returns to the stock market next month. Long the auditor to Jefferson Smurfit, Ernst & Young lost the contract last summer when Kappa Packaging auditor PwC was selected to audit the newly merged group.

With preparations for the €1.3 billion flotation under way for about six months, there will be plenty spoils to go around in Dublin and further afield when the deal is done in the next few weeks. As with the Aer Lingus float, there's quite a cast. Davy Stockbrokers in Dublin and Deutsche Bank in London are joint sponsors of Smurfit Kappa on the Irish stock exchange, where it maintains its primary listing. The group will have a secondary listing on the London market. Davy and Deutsche are also joint bookrunners on the float, as well as Citigroup and Goldman Sachs.

On the legal side, McCann FitzGerald is advising Deutsche and William Fry is advising Smurfit Kappa itself. Media relations are being handled by WHPR and K Capital Source, which is also managing investor relations.