The judge investigating the Siteserv matter found that the company’s CEO had a “hidden financial interest” in Denis O’Brien’s successful bid for the business.
Siteserv co-founder Brian Harvey backed Denis O’Brien’s bid after negotiating a significant stake in the billionaire’s new company if he won his bid, Judge Brian Cregan said.
The judge distributed a confidential draft of his final report to witnesses on Thursday, giving them two months to respond to the findings on the 2012 Siteserv sale that involved a large loan repayment from Irish Bank Resolution Corporation, the former Anglo Irish Bank of state property. The commission of inquiry has spent seven years investigating the deal, and key witnesses are sure to object to its findings in forceful terms.
“The commission found that at key stages in the sale process, Mr. Harvey improperly favored Mr. O’Brien’s offer and put his own personal financial interests before the interests of the company and its principal creditor, the bank,” the draft reads. Of the report. .
Harvey declined to comment. Key witnesses in the long-running investigation are known to be highly critical of the judge’s process, the advice he took, his preliminary conclusions, and the amount of time spent on the investigation.
Some witnesses have argued that the sale of Siteserv, as it unfolded, was in line with the way business is conducted and that public procurement rules were not applied. They also argued that Mr. O’Brien’s offer had the best chance of execution because his preparations were further advanced.
Rival bidder Anchorage had indicated it would pay more for Siteserv, a construction services company then in serious financial difficulty, but proponents of the sale to O’Brien found their deal was better for the company and its staff.
In a several-hundred-page draft of conclusions, Judge Cregan said that the engagements between Harvey and his adviser Niall McFadden, another Siteserv co-founder, with a representative of O’Brien were not disclosed to Siteserv or his advisers.
“In the commission’s view, one of the extraordinary features of the Siteserv transaction is that the company’s two co-founders, Mr. Harvey and Mr. McFadden, emerged from the transaction with a combined 15 percent interest in the Mr. O. ‘Brien’s new company without the knowledge of the Siteserv board of directors. . . the sales subcommittee. . . company advisors. . . or the bank at any stage before the Siteserv stock purchase agreement was signed on March 15, 2012,” the draft read.