Ceisteanna–Questions. Priority Questions. - Eircom Flotation.

Thursday, 19 October 2000

Dáil Eireann Debate
Vol. 524 No. 4

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[859]

  3.  Mr. Higgins (Mayo)  Information on Jim Higgins  Zoom on Jim Higgins   asked the Minister for Public Enterprise  Information on Mary O'Rourke  Zoom on Mary O'Rourke   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]

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  As the Deputy is aware, Eircom is now a private company and I have been [860] advised that, as talks are ongoing with another company, I cannot speak about other matters.

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.

Consultant Functions
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
Designated Brokers
–Goodbody
–Davy
–BCP
–NCB
–W & R Morrogh
–Fexco
–Dolmen Butler Briscoe
–Campbell O'Connor & Co.
–Bloxham
–ABN Amro
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: Information on Jim Higgins  Zoom on Jim 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: Information on Mary O'Rourke  Zoom on Mary O'Rourke  I have been advised not to comment on the price of shares as talks are ongoing.

Mr. Higgins: Information on Jim Higgins  Zoom on Jim Higgins  (Mayo): I do not see how commenting on costs which are in the past can prejudice the talks with Vodafone. There is no relationship.

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary 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: Information on Jim Higgins  Zoom on Jim 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 [861] 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?

Mrs. O'Rourke: Information on Mary O'Rourke  Zoom on Mary O'Rourke  The payments were entirely inappropriate and I registered my aversion to that by way of vote.


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