Thursday, 19 October 2000
Dáil Eireann Debate
3. Mr. Higgins (Mayo) asked the Minister for Public Enterprise the cost to her Department of the Eircom floatation; the names of the various companies and individuals to whom payments were made; the services provided in each case; and if she will make a statement on the matter. [22434/00]
The total cost incurred by my Department in connection with the initial public offering is £77.5 million, including VAT of £2.5 million. This figure was made public more than a year ago but the Deputy is quite right to ask again. It includes all costs, including staff costs in my Department and costs associated with the issue of bonus shares to qualified shareholders in July of this year. I have set out a table of all the material which will be included in the Official Report.
|Merrill Lynch International and AIB Capital Markets – with subcontract to International Presentations||Joint global co-ordinators for the initial public offering Roadshow co-ordinator|
|Skadden, Arps, Slate, Meagher and Flom||International Counsel to Ministers|
|Irish International Group||Advertising Agent – Media advertising – production of direct mail material – creative work|
|Citigate Dewe Rogerson (CDR) (i) CDR with subcontract to Drury Communications (ii) CDR with subcontract to Drury Research and Lansdowne Market Research (iii) CDR with subcontract to SITEL||(i) PR and marketing advisers
(ii) Market research
(iii) Call centre and database management
|Computershare Services (Ireland)||Receiving agent for share applications|
|Bowne International||Secure printers|
|Pricewaterhouse Coopers||Process fraud auditor|
|Mr. Noel Lindsay||Process auditor|
–W & R Morrogh
–Dolmen Butler Briscoe
–Campbell O'Connor & Co.
|Registration of clients for the initial public offering|
|An Post||Mailings associated with the share offer|
|National Association of Securities Dealers (NASD)||Stock exchange filing fees in the USA|
|Securities and Exchange Commission (SEC)||Stock exchange filing fees in the USA|
|SITEL||Ongoing call centre services post flotation and after expiry of CDR subcontract with SITEL|
|Ernst & Young||Advice in relation to commencement of IPO process|
|Mason Hayes and Curran||Post-flotation legal advice|
|Telecom Éireann (Eircom)||Freephone charges for call centre|
Mr. Higgins: (Mayo): The poor taxpayer has been taken for another ride. It cost the Minister's Department and the taxpayer £77.5 million for bad advice on the sale of Eircom which resulted in a gravy train for consultants, advisers and executives and a disaster for small time investors. Is it not obvious that the shares were pushed and sold too hard and were overpriced and that was something that need never have happened? This was an attractive proposition in its own right which could have been sold for a fraction of the eventual cost to the taxpayer of £77.5 million.
Mrs. O'Rourke: I will comment on costs. I thought the Deputy was asking about the price of shares. The costs were agreed between the Department of Finance and ourselves. I did not set the costs. The costs for the flotation were set in tandem with the advice given to us and were in line with the European norm for such shares.
As a side issue and not commenting directly on the cost of the shares, it is interesting to note that many commentators in the week after the flotation said I had done the country wrong because the Cabinet committee had floated the company too cheaply.
Mr. Higgins: (Mayo): Was it not a case that there was too much hype, bubbly, anticipation and excitement about all the money that would accrue to the Exchequer and that no controls were in place? Was there any advance estimate or projection of the likely cost of this or was it a case for going forth and the taxpayer picking up the tab? Does the Minister not accept that, from  the point of view of the net result or so-called performance, to pay a performance bonus of £1.3 million to the chief executive and £700,000 to the second in command is absurd and obscene, especially given the disaster which subsequently occurred resulting from key decisions taken by the Government and implemented by the two people in question?
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