I move amendment No. 1:
In page 2, line 15, after "Minister," to add "a copy of which agreement shall forthwith be laid on the table of each House of the Oireachtas".
Bula Limited (Acquisition of Shares) Bill, 1977: Committee Stage.
SECTION 1.
If the Deputy is agreeable, may we take amendments Nos. 1 and 5 together as they seem to be related?
They are related to the extent that they both make reference to the agreement referred to in section 1, but their functions are, I suggest, separate and the arguments are separate. If the Chair does not mind it might be better to discuss them separately.
That is in order. They will be taken separately.
This amendment asks the House to add, in line 15, after the word "Minister", the words "a copy of which agreement shall forthwith be laid on the table of each House of the Oireachtas". That amendment is not precisely what I want because its effect would be to have the agreement laid on the table of each House of the Oireachtas after the Bill became law, assuming it does, and its value to Members of the Oireachtas would be very limited because we would not see it until after the Bill had been enacted. At least, it would lead to publication of the agreement and the public would be aware of what was involved in that agreement, although it would then be at the stage that their representatives could not do anything about it even if there was widespread public disagreement with the terms of the agreement in question.
Had it been possible to draft an amendment on that basis, I would have preferred an amendment that would call on the Minister to publish the agreement during the course of this debate so that Members would know what they are talking about. This is a very short Bill—eight very short sections—and is only about a page and a half in length. It says nothing except that the representatives of the Irish people in the Dáil and Seanad ratify the terms of the agreement of the 12th December, 1975, and authorise the Minister to pay a sum of £9.540 million in purchasing shares from shareholders in a particular company. I have said this already and I have to repeat it, this is an idiotic exercise we are engaged in now.
While most of the amendments are important in one way or another, this one is the most important. Without a study of the agreement which this Bill purports to ratify, this debate is meaningless. Last week Deputy Colley and I asked the Minister if there were any precedents for a short Bill like this which refers six times in a page and a half to the agreement and the various terms of it but where the agreement is not made available to Deputies. On each occasion the Minister said he would need notice of the question and that he was not able to think of a precedent off-hand. I should be surprised if there were a precedent because this proposal to ask the Oireachtas to ratify an agreement that no Member of the Oireachtas has seen, other than the Minister and some of his Government colleagues, must be without precedent not alone in this country but in any other normal democracy.
During the war orders were made under the Emergency Powers Acts whereby certain things were enacted by way of statutory instruments. The content of some of that law was not made public. This was unusual in that it only happened on two occassions and it was specifically provided for in the Acts. In peacetime we have never known such a thing. It was not done by a legislative act of the Oireachtas but by ministerial order as much of our legislation had to be carried out in that way during the war. As far as I am aware, it was done twice in relation to matters of enormous importance to the security of the State. It has never been done in peacetime in this way. If it had been, the Minister would have given us examples.
The Minister is asking us to ratify something that none of us has ever seen. Does the Minister realise the consequences of asking this Parliament to do such a thing? I wonder is it realised by the Government that one of the basic necessities of law in western jurisprudence is promulgation.
Law is not law, even if it is passed by this or any other Parliament unless it is promulgated to the people. If this Bill is passed without publication of the agreement, what is the law? The law will then be the terms of an agreement of 12th December, 1975, made between Bula Holdings, Patrick Wright and other parties named in the agreement and the Minister. That would be the law of the land and one of the consequences of it will be to force every man, woman and child to pay more than £3 each towards the purchase of shares from four shareholders in Bula Limited. That will be the law but it will not have been promulgated.
I would address my remarks to the ultimate guardian of the Constitutional rights of the people, that is, the President of Ireland. I am aware that he is abroad at present but will return on Friday. The report on this debate will be available then and I presume he reads the reports in part at least. It may be that he will be referred to what I have to say. I want to point out to the President that he has duties imposed on him under the Constitution in regard to the signing of Bills. The section of the Article which imposes that duty also imposes the duty of promulgating every law made by the Oireachtas. How can the President promulgate what he has not seen, and what Dáil Éireann and Seanad Éireann have not seen? Section 3 of Article 13 of the Constitution reads:
1º. Every Bill passed or deemed to have been passed by both Houses of the Oireachtas shall require the signature of the President for its enactment into law.
2º. The President shall promulgate every law made by the Oireachtas.
If this section is not complied with, I suggest to the House and to the President that the Bill in respect of which it is not complied with does not become an Act and does not become law. I suggest to the President—and it is presumptuous of me to do so because he is more aware of his duty than I am—that it is his duty to see that the provisions of the Constitution are complied with in respect of this and every other law passed by the Oireachtas. It is difficult to envisage how the provisions of Article 13 can be complied with in respect of this Bill. The President should consider whether or not it would be appropriate for him in the circumstances to sign a short Bill which ratifies an agreement which is referred to six times in the Bill but which is never published. I say to him: how can you promulgate the terms of the agreement of 12th December, 1975, by which the State now purports to be bound unless those who made that into law and you who are signing it into law know the terms of that agreement? I suggest to the President that it cannot be done within the terms of the Constitution. He should, therefore, consider in his own discretion, and if he so wishes after consultation with the Council of State whose advice he is free to reject, whether this question of purporting to ratify by an Act of the Oireachtas an agreement that nobody has seen other than the Minister and the terms of which are unknown should be referred to the courts for a decision. I would remind the House that the Constitutional rights of citizens are not alone those which are specifically set out in Bunreacht na hÉireann. In the last six or seven years the courts have taken pains to hold that the list of rights specifically set out in the Constitution is not exhaustive and that there are many other fundamental rights which the courts will vindicate on behalf of the citizens as against the State or anybody else who seeks to infringe those rights, even though the right in question is not specifically spelt out in the Constitution. I suggest to the House and to the President that one of the rights of a citizen is not to be bound by a law which is not promulgated to him. How can any citizen in any Parliamentary democracy be bound by something of which he knows nothing? It is monstrous to seek to make him liable in financial or penal terms for something that he knows nothing about and that his elected representatives know nothing about when they purport to enact into law something under which he will be bound and under which he, in common with each citizen, will be called to pay £3.20 to fulfil the Minister's obligations.
Two hundred years ago in America there was a great cry that there could not be taxation without representation. That cry and that right prevailed. Are we now in Ireland in 1977 in the position that there will be taxation without knowledge? Surely knowledge is as fundamentally necessary as representation. Here we are, the representatives who impose taxation, but we are imposing it in respect of something of which we know nothing. If, therefore, this law which the Minister and the Government are asking us to make cannot be promulgated then I submit this law can never be binding and should be upset. The first guardian of the constitutional rights of our citizens is the President. His predecessor has given a good example in vindicating with dignity and nobility the rights of the people under the Constitution. I do not think the present President needs any example. He is a man of equal integrity and ability and a man who will fulfil his sworn duty in a way as commendable as that of all his predecessors.
I wish to draw the attention of the House and the attention of the President to this very fundamental problem we are now facing. This can be overcome by the Minister accepting the spirit as well as the letter of this amendment. He should make this agreement available now to Members of this House and then postpone the Committee Stage for perhaps a week so that we can study the agreement and decide whether it is appropriate that we should ratify it in what we consider to be the national interest.
Let us consider the position of the Deputies opposite if the Minister does not do this, if he does not accept both the letter and the spirit of this amendment. By virtue of the fact that they hold a small majority of the seats in this House, they will walk through the lobbies purporting to enact into law something that is in fundamental conflict with basic legislative jurisprudence in every parliamentary democracy. They will purport to create a situation in which every citizen will have to pay taxes in order that this payment can be made by the Minister. All this will be done on foot of an agreement that none of us has ever seen, except the Minister, Deputies opposite, if they are forced by their Whips to go through the lobbies, will have a very heavy responsibility.
This point was brought out very well by Mr. Bruce Arnold in his article in last Saturday's edition of the Irish Independent. He felt that the secretiveness associated with this Bill and with this whole deal should not cause Deputies to enact a law without the fullest disclosures and information. My point is more fundamental than that. Even if none of us disputed the terms of what the Minister is trying to do, every one of us, as an elected representative in a parliamentary democracy, should resist and refuse to enact a proposal that would make something unknown become the binding law of the country.
This will be basically a taxing measure in the sense that £9.54 million will be devoted to this purpose. That sum must be obtained in the normal way by taxation. It may be obtained by in the short term by borrowing, but in the long term it must be obtained by the taxation of the people. If we are prepared to tax the people by this kind of law, is it not possible that next week, next month or next year we will be prepared to penalise the people in the criminal sense, to impose penal sanctions for breaches of the law that the House has not seen and that the citizen has not seen? The citizen of any genuine democracy has the right to know what the law is. It has been a principle of our law for centuries that ignorance of the law does not excuse anybody. The reason for that is that the law is always discoverable. An individual might not know what the law is on a particular topic, but it is possible to find out. Therefore, ignorance of the law is no excuse. I suggest that in this case ignorance of the law must be an excuse. That principle cannot apply because this Bill flouts in a fundamental way the tenet that has run through the law for centuries—that knowledge of the law is available to those who seek it. It is not available here and that is why I think that, if this House is foolish enough to enact this Bill without this amendment being accepted both in letter and in spirit, then it is the duty in the first instance of the President and afterwards of our courts to protect and vindicate the rights of our citizens.
I want to refer to one aspect of the kind of difficulty that can and almost certainly will be created by the enactment of this Bill and the ratification of this agreement when we do not know its contents. The Minister will not publish the agreement in spite of many requests to do so. Could the Minister give the House an assurance that all the shares in Bula Limited rank pari passu, in other words that they all have equal rights? Can he give the House a categorical assurance that no group of shares in this company has any special voting rights as against others? Can he give the House a categorical assurance that the majority shareholding in this company will always prevail? Can he give the House a categorical assurance that the holders of a group of shares smaller than his 49 per cent will never be able to outvote his 49 per cent? Can he give the House a categorical assurance——
What about the 75 per cent rule?
——that, having regard to the 10 per cent of the shares in Bula Limited held by the representatives of Patrick Wright, deceased, if they were to vote with the Minister and make a total of 59 per cent, that 59 per cent could not be outvoted in certain circumstances by the holders of the remainder of the shares which would amount to 41 per cent?
It has been suggested to me that some of these shares hold special voting rights and that that is one of the reasons that the Minister is so loath to publish this agreement which we seek in the amendment. If that were the situation it would be very wrong. The Minister would not just have bought a minority shareholding, as he now tells us he has done—buying 24 and getting a gift of 25, giving a total of 49—but would have locked himself permanently into a minority position if any other shares had any special voting rights.
It would be absolutely intolerable if the State, which already, unfortunately, has only a minority in this private company and has no control in it either at board level or at general meeting level, put itself in an even worse position under this agreement that the Minister will not publish, that even if it held 59 per cent of the shares or had the support of another 10 per cent of the shareholders, it could still be outvoted in regard to certain matters.
I would be interested to hear from the Minister in his contribution on this amendment whether there is any possibility of anything of that nature happening. If there was any suggestion whatever that such a provision existed, it would be a matter of very considerable seriousness and it would heighten still further the suspicions that are inevitably created in the public mind by the extraordinary refusal of the Minister to publish a document that is fundamental to this Bill.
I cannot accept the amendment. I made that clear, not on this amendment but when the demand was made for the publication of the agreement. Although I made my reasons clear then, it is fair that on this amendment I should reiterate them at some length.
This agreement is part of a whole category of agreements which exist between the State and companies, whether private or public. This relates to the minority shareholding in a private company. Over the life of this State and, indeed, of similar states over a comparable period of evolution, norms have been worked out which balance two things: the perfectly desirable right of the public to know as much as possible, on the one hand, with the need for commercial confidentiality, on the other.
I do not think anybody would urge me to behave in an arbitrary way in regard to particular agreements, in other words, to behave towards one in a way that was different from the way in which I and my predecessors have behaved towards others during the life of the State. I do not think that sort of arbitrariness by Ministers is desirable. There ought to be guidelines evolved which are clear, which can be operated by civil servants as well as by Ministers and which can be operated by one Minister after another; Ministers come and go.
I have to take note of the operation of the commercial agencies responsible to me and to listen to them very carefully. I particularly have to take note of the norms we have encountered in other countries in regard to the question of oil and gas which is upcoming at this moment. With the evolution of the concept of participation by the State, a concept which is not peculiar to this Government and which was in the 1969 IDA Act, which enabled the IDA to take minority shareholdings in companies—and that is not the only example but it is the most recent and most relevant one which is nearest to my mind—one has to take due note of the successful functioning of those agencies. I want to put the cost in context, because Deputy O'Malley has mentioned how many pounds this is for every man, woman and child in the country. Let me remind the Dáil that we give away—if I may put it that way, because we give this in grants and not in investment—about £60 million a year by the action of the IDA, and during the comparable period of the payment of the three slices on this agreement, that is, three years, since the IDA moneys are increasing, there will be a sum of about £200 million wanted. There are also payments under SFADCo, Gaeltarra Éireann and other such agencies. All of these distribute public money on the head of agreements which are confidential and which have never been asked for in this House, and that confidentiality is a necessary part of the success of those agencies.
There are people in the House, like Deputy Colley, who was Minister for Industry and Commerce at one stage and understands the working of the IDA. He knows that if in regard to all of the confidential agreements between the IDA and companies, Irish and foreign, public and private who are the recipients of grants—and the sort of money we are talking about here, taking it year by year, is perhaps 5, 6 or 7 per cent of the annual disbursements by the IDA—we were to insist that for all those disbursements they be treated the way I am asked to treat this private company, Bula, who have made an agreement with the State, then the functioning of the IDA as it is understood would become impossible. I know there are people who disapprove of the IDA and do not want it to work, but that is not an opinion I would attribute to the Opposition; I think they want it to work as much as I do.
There is a second category which preoccupies me intensely. We have looked very hard at the participation agreements between states in relation to oil and gas. The whole question of these agreements as they relate to the oil companies prospecting and exploring the hydrocarbons on the Continental Shelf is of great importance to us. The sums of money involved were greater by far than the sums we are talking of here. A country which we studied a great deal in this context is Norway. By tradition Norway is very open. As much as possible was revealed; but her agreements with the oil companies, agreements which involved vast sums of money and included State investment were sacrosanct. They were not made public. If we were to make available information regarding our agreements, we would damage seriously the companies involved. Therefore, those agreements shall remain secret for so long as I am here. When I say that in relation to the IDA's functioning and to the oil and gas agreements we must have commercial secrecy, I affirm a difficulty. However, I do not believe in solving that difficulty in the case of one company thereby creating a precedent which could be very messy and which would immediately expand the effort in a way that would be detrimental to our whole economic activity. The difficulty is that as the State moves into a position of participation—and when this is done on the Continental Shelf, the sums of money involved will be much larger than what we are talking of here—I am in a no-win situation because if I reveal one item out of a whole series, I do something arbitrary and I cast tremours into the minds of people investing in our Continental Shelf, people contemplating investing in Ireland, people setting up private companies and the whole question of grants for such people. Therefore, if I reveal, I do damage to all of that; but if I do not reveal, people will say, as Deputy O'Malley has said, that I have something to hide.
It is relevant to raise this whole matter on the subject of this Bill because it raises a concept in the context of law as it evolves in a country. My opinion is that at a later stage neither I nor future Ministers should not be put indefinitely into a position either of being forced to do commercial damage and breach all the traditions of the State in regard to confidentiality or, alternatively, be accused of bad faith. That is what I describe as a no-win situation.
Regardless of what people may think, the trend is in many countries towards increased State participation. With this in mind we must work out a mechanism which applies to categories and not to individual agreements. Deputies who know how the State works are aware that one cannot pluck out one agreement and exclude others. Why should we hamstring the State's commercial activities by doing something that is not enshrined in law in regard to companies? On the other hand we ought to have a mechanism, be it a committee of the Dáil or a committee of judicial people, whose job is to be above reproach and who would scrutinise these matters and say clearly "We will not publish these matters because to do so would damage the commercial activities of the State but we can testify that everything is above board".
Deputy O'Malley waxed eloquent in regard to the President. I know that the President will do his job. I am neither a lawyer nor an expert on the Constitution, but I am convinced that if the President sees anything wrong with this legislation he will do his duty. However, the people on the front bench opposite know how Bills are prepared. They know the process is one of Government approval, of drafting and then of the legislation being put into words which comply with the provisions of the Constitution. Deputies opposite know that Bills are subject to the scrutiny of the Attorney General and that subsequently they come forward in their prepared form for Government approval. Because of the role of the Supreme Court in recent years, a role which by and large has been progressive and with which I am pleased, any parliamentary draftsman will have regard to this aspect in drafting legislation. Apart from the question of my conviction that the President will do his duty punctiliously, I know, too, that those matters of the propriety of legal correctness, of respect for the common law and for the laws of the State, are the proper concern of the parliamentary draftsmen and of the Attorney General. But should there be any substance in what Deputy O'Malley says, there is a remedy. In such case we would suffer the consequences and the Bill would be struck down, but people do not go to the trouble of bringing forward Bills here without those matters being considered carefully.
I have referred to the amounts of money that we give away through the IDA by way of grants. The amount given in this way each year is about ten times the amount involved here, but that money is made available under legislation. Its distribution is on foot of secret agreements, but what interests me is that those agreements have never been sought in this Chamber. This precedent was set by the present Opposition. So much is commercial secrecy respected in regard to the IDA that when one asks a parliamentary question here about the grants made by the IDA, one is referred to the following year's annual report. That convention has been accepted. One is not even supplied with the answer to a parliamentary question.
People who scrutinise the IDA's annual report are familiar with the amount of information it contains. I must look askance on the effort to treat this company, when the amount of money is £9.5 million, as totally different from the IDA grants. People know that the IDA take shareholdings as well, sometimes very substantial ones. This is done not alone without the agreements being brought before the House but without anybody ever having asked that they would be brought before the House. We are asked to treat this private company in which the State is taking a minority shareholding differently from other companies in which the State is taking a minority shareholding. We are being asked to do something in regard to one company which has never been done in regard to others and which was never asked for before.
I cannot help noting the intensity of Deputy O'Malley's concern with the public right to know. I have to allow myself an internal smile when I hear the words which Deputy O'Malley uses. I remember years in which grants by Bord Fáilte made by the Opposition when in Government were secret both in regard to the names of the recipients and the amounts of the grants. A campaign was waged which was finally successful for that information to be made available. Phrases like "no taxation without representation" are fine but the IDA takes more money every year which goes out without ever coming to the House. I have made agreements in relation to oil and gas with the great international companies which are sacrosanct. Bord Fáilte gave out money during those years to all those recipients without naming names. That was a tax on people and it was secret. I am not going to make an individual exception in regard to a single company. I believe we need a mechanism of scrutiny by neutral people. As we move on with participation and agreements between the State greater than have existed in the past 20 years, and when we move to investing profitably rather than simply giving money as grants, we need a mechanism for scrutiny. I will not accept a mechanism of scrutiny which is arbitrary in its application, which applies to one company and not to another.
I cannot accept that we should do this in regard to one single agreement for one company that the Opposition apparently do not like. We have to treat companies identically. We have to treat categories of agreements and not single agreements. Deputy O'Malley is asking me to breach the traditions and practice of this State which have grown up over decades in regard to a single company. We ought to evolve, we ought to change and have a mechanism of scrutiny but I do not think it ought to be introduced in accidental and arbitrary ways or as a result of pressure to reveal an agreement of a single company which has been made the object of very sharp controversy. It ought to be done in a coherent and integrated way. In the meantime, I propose to stand on the position I have taken and I propose to reject this amendment.
Now that the Minister has concluded, will he answer the questions which I put to him in regard to the question of voting rights of shares in the company.
The situation is that I will not piecemeal reveal bits and pieces. I will not accept the amendment. I would be very happy to have a mechanism for scrutiny but I am not prepared to enter into a discussion on those matters.
Would the Minister recall, as I do, that the Minister revealed two parts of the agreement of the 12th December, 1975, last week, in reply to statements which I made in my Second Reading speech, and I said, by way of interjection at the time, that this was a very selective method of disclosing bits and pieces of what presumably is a long and complex document? I said in my Second Reading speech that the probability was that the State would have to take up a rights issue and would have to take up 49 per cent of the rights. The Minister replied that I was wrong because the agreement had a provision in it that a rights issue cannot be made by the company unless the Minister agreed. I said that I was delighted to hear that but that I thought it funny that we were only having selective disclosures of bits and pieces of the agreement that happened to suit the Minister at the time.
The second disclosure was around the same time in the debate where the Minister said that I was not quite right when I said that there was likely to be a liability on the State as a 49 per cent shareholder in this company to guarantee at least to that extent and possibly more, loans from banks which are a feature of the financing of mining operations. The Minister said that I was wrong because there was actually a provision in the agreement of the 12th December, 1975, that if we did not want to, we need not guarantee loans from banks; however that was not to say, that we would not give a guarantee and that if one was sought from us we would have to consider it at the time it was sought. I again observed that this was another selective disclosure, because it happened at the time to suit the Minister's argument. It showed that I was 98 per cent right instead of 100 per cent right in what I had said.
I have asked five or six specific questions now in relation to the ranking of these shares and the Minister has declined to answer them. I can only draw the inference and I invite the House to draw the inference that what I have said is right. If as it now appears what I have said is right, it discloses a position which I described earlier when making the inquiry as intolerable. We have a position in which one group of shareholders, Messrs. Roche, Wymes and Woods, hold 41 per cent of the shares in a block. The Minister holds, or will hold if the House fails to reject this, 49 per cent and the representatives of Patrick Wright deceased will hold 10 per cent. The Wright block of 10 per cent is regarded as not being part of what one might call the Bula or the Roche/ Wymes/Woods block of 41 per cent. It has been suggested to me that these differentiations are drawn in the agreement and that, if you had a situation in which the Wright block of 10 per cent voted with the Minister to give a total of 59 per cent, they would not over rule the 41 per cent because in certain circumstances the 41 per cent have special voting rights and the shares are not therefore pari passu. I invited the Minister to deny what I put to him. He has declined to do it and the House can draw its own inference. The House now knows the position in regard to the voting rights of shares in the company.
In view of the fact that apparently the Minister does not wish to reply to Deputy O'Malley and has declined to disclose to the House whether there are special voting rights built into the agreement it makes it all the more important that we look very closely at what the Minister is trying to get the House to do. Listening to the Minister it struck me that here we had a classic example of a man turning facts on their head. Remember he told us he did not want to pick out one company. He thought they should all be treated at least in categories, that we should not single out one. He did not want to create a precedent in the way this company was treated, as we were urging, and this would apply in the future to other companies.
What are the facts? The facts are that the Minister has brought before this House a Bill for which there is no precedent, and he has admitted that. No Minister in any Government in the history of the State has ever asked Dáil Éireann to pass a Bill which refers in the way this Bill does to an agreement without disclosing the terms of the agreement. Deputy O'Malley raised this fundamental point on the introduction of Second Stage and got no satisfaction. I raised it at the conclusion of Second Stage, and I should like to quote from the debate in the Official Report dated 2nd February, 1977. At columns 747 and 748 it is stated:
Mr. Colley: Could the Minister direct the attention of the House to any precedent of any Act passed by the House referring to an agreement, in the way this Bill does, where the agreement was not produced?
Mr. Keating: I cannot do that at this moment. It may be an appropriate point to raise when we come to the next Stage of the Bill. I will endeavour to furnish an answer then. I cannot do it at this moment.
Mr. Colley: Does the Minister appreciate that in view of the very heated argument which there was on this point that it would be appropriate that he would at this stage be in a position to refer to such a precedent if it existed? If it does not exist does it not invalidate the whole argument he was making? What is he covering up?
Mr. Keating: The position is as I have stated. This is a point which can be dealt with later on in the proceedings of the House.
Mr. O'Malley: There is no precedent.
We come now to the next Stage. The first amendment before the House deals with this point and in all the Minister had to say he could not refer to one precedent for this Bill. Contrary to what he has said, the facts are that the Minister is creating a precedent and never before in the history of the State has any Minister sought to do what this Minister is doing here. There must be a good reason for that but we have not heard it.
We heard from the Minister a great deal about the money paid out by the IDA. The IDA pay out money in the form of an investment in a business which is already in existence or which is about to start, one that they have assessed and are satisfied will be viable. They do not pay money just for the purpose of compensating shareholders for giving up some of their shares. They pay money for a share in a business which is in existence, as was done in the case of Cement Roadstone, or in the case of a new business starting up in respect of which they are satisfied. However, that is not the case here. In this situation the Minister is paying money to shareholders in respect of a business which may never start, a business that has no start-up date and where the cost of start-up is not known. If planning permission is not given it cannot start-up; if planning permission is given subject to certain conditions, the cost of start-up will be enormously greater than if they were subject to certain other conditions which the Minister hopes to see achieved.
It is a totally different situation. But above all—and this goes to the fundamental issue involved here—the Minister has endeavoured to suggest that there is a tradition of confidentiality in dealing with public and private companies which ensures that disclosure of this kind is not made. I say to the Minister he is wrong. The tradition is that there is no disclosure of information which would affect the commercial interests of the company concerned and in the normal way that would apply to the day-to-day operations of the company.
The Minister implied in what he said that investments made by the IDA are secret and are kept as such. I was responsible for the investment in Snia. There were no conditions that the terms of the investment by the IDA in Snia were to be kept secret. No such conditions were imposed. The IDA give full disclosure in their annual report of their investments or grants. Public companies, such as Cement Roadstone, which have a State investment disclose publicly the terms of that investment. The only case for non-disclosure would be if the Minister could show that the commercial interests of this company would be affected by disclosing the terms on which the investment is being made.
I cannot visualise circumstances in which disclosure of the terms of investment could be damaging to the commercial interests of this company, but let us assume for a moment that such conditions exist. If that were so and if the Minister is faced with a situation where he has to bring in a Bill to this House authorising that investment, it is certainly not beyond the bounds of possibility that the Minister could devise a method whereby the necessary disclosures could be made without its being a public disclosure. The Minister has spoken about the desirability of a mechanism for dealing with this kind of situation but we have never had this kind of situation in which investment as such—not day-to-day working—and the disclosure of its terms would be damaging. Until it has been proved otherwise, there is no reason to accept that there would be any damage whatever done by disclosing the terms on which the State is investing this money; and if any such danger exists there is an onus, an obligation, on the Minister at least to disclose what the danger is. If he thinks there is any concrete danger he should at least tell us the nature of that danger.
We are talking about the terms on which the State are investing because of a change in the ownership of the shares of the company, and it has nothing to do with the manner in which the company conduct their business, and there would be nothing in the disclosure of the information to the advantage of rival companies. There is no precedent in this Parliament in relation to the circumstances in which the Bill is being introduced and there is an obligation on the Minister to disclose clearly the risks he is trying to avert, if such risks exist.
Have this company been asked to agree to the disclosure of these terms? Other companies in which the IDA invested were not given the option— the disclosure was made anyway. Have this company been asked and have they refused, and if they have refused, why? If they have refused why is the Minister refusing to disclose and if they have not been asked, why have they not been asked? It is no answer to say this company should not be picked out and treated differently from all others. That is what the Minister is doing in this case. No other company, public or private, have been put in the same position as Bula are being put by this Bill.
The Minister has been asked to indicate at least one precedent for this and he has failed to give it. His failure to do so leaves very serious and I suggest reasonable suspicions in the minds of all of us, inside and outside the House, who had any interest whatever in this matter. The Minister may talk at considerable length about the situation in regard to IDA grants but there is no similarity at all in the situation or in the way such companies are treated. He referred to Bord Fáilte grants. I agree it is true that for a number of years there was not disclosure of the grants or the recipients. That was a situation with which I personally disagreed, as did a number of my colleagues, and in due course it was remedied and for many years there has been full disclosure.
I hope the Minister will appreciate that even in those circumstances the situation is quite different from the one he is presenting to the House through this Bill in which he is asking the approval of the House to an agreement which he refuses to produce, and for the non-production of which he has given no good reason. Because he has failed to give a good reason in relation to the circumstances of this case for which there is no precedent, at least he has the obligation to indicate to the House in which way the disclosure of the terms of the agreement could damage the interests of this company. In the absence of information of that kind from the Minister it is necessary to consider why the Minister is refusing this disclosure—it is necessary to consider why we have the almost unbelievable situation of a Bill being brought before us which would have us approve of an agreement whose terms the Minister refuses to disclose.
As I have said, no Minister in any Government in the history of the State has ever sought to do this. The Minister spoke about it being necessary to have guidelines. He has them. If he follows the traditions that exist he will disclose the terms of the agreement. He is the one who is creating a unique and unprecedented situation. In view of his continued refusal to disclose the terms of the agreement and of the lack of substance in the reasons he has advanced for his failure to disclose those terms, as I have said it becomes necessary to consider why the Minister has put himself in such an untenable situation. He is an intelligent man and there is no way in which he would put himself in this position without very good reason.
Since he has not disclosed that good reason, all we can do is to speculate on what the reason might be. The most obvious reason is that this is an effort by him to cover up incompetence, at best, in the negotiation of this agreement. Then one wonders about the whole approach of the Minister and his colleagues in regard to this whole area. Anybody taking an objective view of this Bill and the Minister's attitude must consider that all he wants is that the Dáil and Seanad would rubber stamp this agreement.
That rubber stamping approach is one that is becoming more and more common under this Government. I ask people to cast their minds back to the time when this Government came into office and to try to visualise if they were told at that time of some of the things that would happen under this Government from the point of view of total contempt for Parliament whether they would have believed it. Even we here would not have believed it. It may be recalled that this is a Government which not so long ago introduced a guillotine motion in respect of Bills which had not even been introduced or circulated. No other Government in the history of the State did that. If one were told in March, 1973, that this Government would do a thing like that one would have taken a bit of convincing.
We have seen attempted censorship of the Press and of the letters pages in the newspapers being used as the basis for threatened prosecution by the Government. We have seen the reaction of a member of the Government to the exercising of his constitutional powers by the President; we have seen this Minister threaten the Official Secrets Act in respect of this particular transaction.
All this gives very considerable food for thought, and I suggest that in the light of these facts, limited though they are—they are by no means an exhaustive illustration of the actions of this Government—it becomes clear that Deputy O'Malley's amendment is of much more fundamental importance even than the details of this very substantial payment or the agreement would imply. Deputy O'Malley's amendment goes to the root of parliamentary democracy. There is no precedent for what the Minister is trying to do. He has not given any good reason for what he is trying to do. He has a clear obligation to spell out at the very least the dangers that he can visualise to this company by disclosure of the terms of the agreement, not disclosure of the day-to-day workings of the company but just the terms of the agreement. I hope the Minister appreciates the difference. In the absence of that disclosure by the Minister he cannot blame anybody who has his suspicions and he cannot blame anybody who regards this Bill and the failure to accept the amendment to it as another example of the Fascist mentality this Government have been showing.
It is a change from being a Red anyway.
Maybe Deputy Halligan does not know—maybe nobody told him and I want to tell him something he apparently does not know— that when going around the spectrum one gets the extreme left and the extreme right together and they all come out with the same kind of mentality. Hitler and Stalin had exactly the same approach. Maybe Deputy Halligan does not know that. We are seeing now a pale imitation of that here.
And de Gaulle.
Deputy Colley, on the amendment.
The situation is that the persistent refusal of the Minister even to attempt in any rational logical way to justify his refusal of this amendment justifies everybody in being extremely suspicious of what he is covering up and equally justifies everybody who looks at this particular provision and the record of this Government in regarding this part of this section, if it remains unamended, as a further example of the kind of Fascist mentality this Government are increasingly showing. It is possible the Minister can relieve all our minds by explaining to us what he has not done up to now, namely, explaining the dangers involved for this Government and for the State's investment in disclosing the terms of the agreement.
I want to make it as clear as I possibly can that, unless the Minister is able and willing to do that, we can only regard his refusal to accept this amendment in the way I have already outlined.
I am surprised at the Minister's attitude. The Minister has made no effort whatever to justify his outright and downright refusal to publish this agreement or, as Deputy O'Malley suggested, lay a copy of the agreement on the Table of the House. The Minister said the agreement is part of a whole series of agreements and he placed a great deal of emphasis on the necessity for maintaining secrecy about agreements come to by the IDA with various companies. I am somewhat surprised in view of that that it was not the IDA on behalf of the State who negotiated this particular agreement.
There has been criticism from time to time by various people, including Members of this House, about the IDA not coming to the aid of the Irish investor and doing too much to encourage the outsider as against the local entrepreneur. There were Members of this House, who are now Members of the Government side, who had a great deal to say by way of criticism of certain IDA activity down through the years. When there was a 95 per cent success record they would complain that it should have been 100 per cent.
For the last four years I have listened to my colleague, our spokesman on Industry and Commerce, exhorting the Minister to encourage the IDA, to be a little more elastic and take more chances in attracting industry in order to create much needed employment. In this instance the Minister is literally creating his own smokescreen by continuing to compare this agreement with traditional IDA agreements. From my experience of the operations of the IDA I am satisfied the figure the IDA would be paying to the company on behalf of the State would be more in line with Deputy O'Malley's later amendment than it is with what is contained in section 2. That is why I am so worried about this agreement. Why should it have been the Minister who negotiated the agreement? He draws comparisons between this agreement and agreements come to year after year, month after month and week after week between the IDA and industrialists within this country. But this got special treatment.
One of the pronounced reasons why it got that is that, whatever is conveyed in this agreement, without this special treatment, no sane group of people— which I believe the board of the IDA are—could responsibly face back to the Minister for Industry and Commerce and say "We have paid; we propose to pay £9½ million for a quarter share in Bula, and would you ever go and try to sell that to your Government colleagues?" That is what the Minister will have to do in that context. This is the type of operation that the Minister in his defence endeavours to offer as the reason why he cannot disclose or talk about the terms of this agreement. He quotes many similar agreements drawn up with the IDA under himself and under previous Ministers. I am aware of numbers of agreements whereby the IDA on behalf of the State took shares, but in all cases the company in which the State or the IDA was taking equity were spending far more money themselves on the development of that industry than the State was.
We are in a unique position. We are paying over £9½ million for a quarter share in a company which was set up for £½ million. That is the difference, and the IDA would be leaving themselves open to a lot of criticism. I am wondering if it was the case that the Minister asked the IDA to negotiate this. The fact was that they could not stand over it and went back and told the Minister "You handle this yourself". For the first time we have the Minister creating a precedent in a Bill being introduced here. His excuse for creating this precedent is that he does not want to create a precedent. That was his reply to the amendment moved by Deputy O'Malley, that there may in the future be big business such as the business he was talking about last weekend. We have drilled very deeply off the west coast for oil but we will have to go lower before we can do business. Seemingly that has been the policy of the Minister for Industry and Commerce over the past four years. This country is laid low at the moment but we will be worse before we can be better; we will have to go lower before we can strike back.
I am desperately suspicious of this agreement. I was the Minister's immediate predecessor and I am fully conscious of the pressures that must be on this Minister in relation to this business and I am afraid he has succumbed to those pressures. This precedent-creating operation of introducing a Bill here last week and having to give approval to something we have not seen is a very bad move for any Government. Any honourable Government would be ashamed to bring in such a Bill.
The Taoiseach in his opening speech in the lifetime of this Dáil talked about open Government. Open Government is really making history now in coming in and asking this Parliament to rubber-stamp a secret agreement. This is what the Taoiseach described as open Government. The Minister in reply to the moving of this amendment by Deputy O'Malley, endeavoured to justify his action on the basis that this is only £9 million, and over the next two or three years with the big business that is on the upsurge at present that will be only chickenfeed in relation to the money that the Minister for Industry and Commerce will seek to have rubber-stamped in this House. But he does not want to disclose this agreement because that would create a new development and we would lose the confidence of the prospective industrialists coming into this country.
We must get across the message to the Minister and I am glad that earlier, for the first time for a long while in this Parliament, we had five or six representatives from the Government present to hear Deputy O'Malley's contribution because of their qualms and worries about this thing. Normally at 3.40 p.m. on any Tuesday or Wednesday in this House you would find a Minister deserted and operating on his own but for some reason today there were at least ten Deputies including two Ministers who stayed, one Minister with a pronounced interest.
It is rather an extraordinary thing that the Minister for Industry and Commerce should say today that the Opposition were quite clearly opposed to this company, Bula, and that this is their objection to this Bill. I am afraid that the Minister is forgetting that it was his colleague, the Minister for Local Government, who described the principals in Bula as claim jumpers. That description did not come from this side of the House. It came from the Minister for Local Government who was not in the House at any stage of the discussion on this.
This legislation as a precedent in itself is an extremely dangerous precedent. If I am to accept that the Minister is genuine, the message I got from him a short while ago when he was making his reply was, "If I go any of the way here, if I were to disclose this agreement it could create complications. We have studied the situation in Norway and other parts of the world and they do not disclose the content of agreements for the very serious business reasons of protecting the interests of both the Government and the involved client." What he is forecasting is that this is the first of many such Bills that will be introduced in this House, and this is why I am so worried. It is remarkable that Parliament should not be given the opportunity of seeing an agreement where the State is involved in the purchase of a 25 per cent share, which will amount to a 49 per cent share, in a property which originally cost the shareholders of this country £½ million.
The Minister, in the persuasive manner in which he gets his message across to the people, talked about the necessity to evolve. He said that we ought to evolve, that we ought to change. I do not think we should; I do not feel that I ought to change. I do not think there is any great need for change. A remarkable amount of change has taken place in the Minister himself and within his party over the last four years. The Minister for Posts and Telegraphs never stops talking about £70,000 or £100,000 but his colleague the Minister for Industry and Commerce talks about £9.5 million as if it were chickenfeed. Perhaps it is that the Minister for Finance gets it so easily——
He was merely contrasting it with the sum voted annually to the IDA.
He was contrasting it with the amount of money——
He did not describe it as chickenfeed. He was putting it into perspective vis-à-vis the money the State puts into other concerns, vis-à-vis the annual budget of the IDA.
Order. Interruptions must cease. The Deputy will have his opportunity.
I listened to the Minister and I know what has been going on. He talked about it in relation to the £60 million the IDA will spend this year. It is chickenfeed by comparison. That is my way of putting it.
The Deputy's way. That is the Deputy's word.
I am using the word "chickenfeed". It sprang to my mind as I listened to the manner in which the Minister talked about £9.5 million. He said it is only £9.5 million and the IDA disperse £60 million of the tax-payers' money annually to bring in much needed industry. Despite that, the unemployment figure is increasing. The Minister for Foreign Affairs told us last week that the figures were going down. If some money were spent on keeping the Minister for Foreign Affairs up to date when he comes home, it would be a good thing.
The Minister's contribution was interesting. It was to placate the knockers, to placate his critics and to placate Members on this side of the House. He has not made up his mind positively not to disclose the contents of this agreement at any stage. He said he is studying a mechanism through which this information might be made available on a confidential basis. If there were even two people on the Opposition side of the House who could be trusted he might invite them in and show them the agreement but, of course, it goes without saying that there are not.
As Deputy O'Malley said, the Minister has disclosed a certain amount. When we are finished making our case he will say: "I cannot contradict the case made by Deputy O'Malley." Deputy O'Malley asked the Minister if his interest, the State interest, and the interests of the representatives of the State at shareholding level got support from the people representing the 10 per cent that would make a total of 59 per cent and would they be able to outvote the shareholders representing the Roche, Wymes and Woods interest. In his normal fashion the Minister will tell us: "I do not want to disclose this. I cannot have Deputy O'Malley forcing me into giving a reply" and we will be left speculating like a number of the people involved. That is not good enough.
There is no logical way in which the Minister can talk himself out of this. The only way this Bill can go through is by a straightforward whipping arrangement which we describe as the rubber stamp method. If there are genuine Deputies on the Labour benches, and I believe there are, it will be heart-breaking for them to have to vote for this Bill. As they are walking through the lobby they should keep in mind the statement of their patron the Minister for Industry and Commerce and keep saying to themselves: "We must change. We must evolve." The Minister told us last June about the enormous difficulty he had in reading through those hefty files. I know one man who will have no problem in walking through the Division Lobby.
The Minister for Labour will have no difficulty in walking through the Division Lobby because his files will show that at a dinner in the winter of 1972 which Deputy O'Leary attended as spokesman on Industry and Commerce he assured not the Bula people but the Tara people that the Labour Party had to make noises about nationalisation and all that jazz with a follow up about the £850 million the Fianna Fáil Government had allowed. He said that was all bunkum and the Labour Party could be counted upon for any support they wanted if they got into office.
I welcome this opportunity of making a few remarks on the Bula Limited (Acquisition of Shares) Bill——
I should say we are on Committee Stage, on an amendment in the name of Deputy O'Malley—section 1, amendment No. 1.
The amendment proposes that a copy of the agreement shall be laid on the Table of each House. I support the Minister's view that it is entirely undesirable that a copy of the agreement in question should be laid on the Table of each House. He has drawn an analogy with other areas of State activity——
Theirs not to reason why.
——and the confidentiality in the commercial sector both in the offshore oil mining agreement and in the agreements made between the State and so many representatives of industry. It seems singular that the sole demand from the Opposition in recent years that copies of documents should be laid on the Tables of the Houses should relate entirely to this issue concerning Bula mines.
The Bula mine issue must be put into perspective against the policy of the Government in the mining sphere and also against the background in Navan where another major mining company has been involved and, in particular, the change of policy by this Government in the mining area from the attitude of the previous Government under which no taxation was extracted from those engaged in mining activities. One of the first steps of the National Coalition Government on taking office was to introduce legislation under which tax would be forthcoming from such interests. When that legislation was introduced it was very hotly contested by the Opposition and spurious arguments were made by the Opposition drawing analogies with industrial development policy. There was a suggestion that there would be a lessening of industrial development activity as a result of this change of policy. We can say, in the light of experience of industrial development in the last three or four years, that there has been no question whatever of the new legislation introduced by the Government affecting in any way the scope of industrial development in the country. Naturally, against this background, the Opposition will come in here in this Bula case.
In regard to the attitude of the Opposition it seems to me that some extremely spurious arguments have been drawn up, particularly by the chief spokesman for Fianna Fáil, who has this amendment before the House, especially in his speech on the Second Stage of the Bill last week. He attempted to represent the sum of £9.54 million as being the equivalent of giving the Bula company a sum of £298 million. This is the most spurious sum brought before the House in my short term here. It took the valuation put on the mine, in which the Government are paying, for roughly a quarter share a sum of £9.54 million and suggested that automatically that is the value for the 50 per cent approximately which Bula are retaining and that this total of approximately £30 million can be quantified upwards to arrive at the figure of £298 million. There is no justification whatever for the extension of this.
I am sorry to interrupt the Deputy but I am anxious that he should come to the amendment, the essence of which is the agreement being laid before the Houses of the Oireachtas. I want to dissuade the House from entering into a Second Reading debate all over again.
I appreciate your concern but I am merely following on the type of argument we have had for the last two hours which seems to me to have been of a more general nature than merely being concerned with this amendment. There has been a great deal of evidence in the last few days which refutes much of the arguments of the Opposition and the contentions made, particularly in a couple of journalistic sources, which have been refuted completely by the people who have been quoted. This is a matter which we can deal with at a later stage.
I said quite clearly that I do not propose to reveal this agreement. I have declined to answer questions of detail for the obvious reason that one question would lead to another and by the process of revealing one bit of information and then another bit my basic position of not revealing the agreement would be overcome at this instance and people could say "There you are, you revealed it". It is natural that questions with maximum possible inuendo would be chosen. Deputy O'Malley is well able to do that. It is also natural that he can draw innuendo from my refusal in view of the point of view he is putting.
I must reiterate that I decline to answer questions of detail on the agreement. I do not do that because of this agreement. I do not stand my argument on this agreement. I base my argument on a category of agreements. I will come to what Deputy Colley said about that because it is not about this particular one but about the category. Nobody has tried to refute my argument about commercial damage. In response to earlier calls for the publication of the relevant agreement I have explained— nobody has been able or even tried to demonstrate otherwise—that the publication would be a major departure from established practice in this regard.
That is not so.
Nobody has been able to explain to me why I should make an exception in this case.
We have demonstrated——
I want to refer to the position not alone of the IDA but of Fóir Teoranta, the Industrial Credit Company and a whole series of other State agencies which are authorised not only to take shares in private enterprises but to give them grants and loans without any question of the relevant agreements being published.
The IDA were reconstituted under the Industrial Development Act, 1969 which specifically provides that it has certain responsibilities under the Minister for Industry and Commerce. It is now contended that it is permissible for the Oireachtas to pass an Act of Parliament providing that the IDA may give grants and take up shares without publishing the relevant agreements but that somehow it is improper for the Oireachtas to pass an Act empowering me as Minister for Industry and Commerce, to whom that subsidiary agency is responsible, from doing the same. Let me point out that in so far as grants and share acquisitions are concerned only the minimum information is given by the IDA annual reports. This is also the case for the various other State agencies.
Deputy Lalor spoke about agreements and he spoke about the traditional IDA agreement. He is aware of agreements. In all his experience, Deputy Colley's experience and my experience when has there ever been publication of any of those agreements? Deputy Colley spoke about Snia Viscosa. Does he think that that proceeding in Sligo would have gone on without detailed, specific agreements worked over by the lawyers on both sides? He knows perfectly well that there was a very detailed agreement with Snia.
I also know there was never a refusal to publish it.
There was never a request. The Deputy knows that the tradition that evolved here was precisely because companies would be scared off and the industrial promotional activity of the IDA would be damaged. Why did it grow up in the way it did?
The Minister is wrong when he says that.
I have before me the annual report for April to December, 1974, of the Industrial Development Authority and in a -table in section 6, on page 8, it gives the total approved for Snia Viscosa Ltd., Sligo as being £6,624,500. It gives the total payment as £6,053,971. There has been no request to publish any of those agreements.
The important thing is that there was no refusal. Would the Minister refuse it now if he were asked to produce it for Snia?
I would refuse it for Snia because I know the IDA at the moment are engaged in dozens of cases of negotiations and the people would be scared off if they were asked to publish those agreements. The Deputy knows that as well as I do.
(Interruptions.)
Let us hear the Minister out without interruption.
There has never been any question of these agencies being required to give detailed information about the transactions or agreements relating to them. In this case I have given a great deal of information to the Oireachtas about the transaction but I am told that is not good enough, that I should publish the agreement even though that files in the face of everything that has been said and done in the House over many decades.
Deputy Colley asked if I could give an example of a similar case in the past where publication did not take place. It is a lawyer's question because it is asking me to prove a negative. It is harder to prove a negative. One would have to start at the beginning of the life of the State and examine each statute and even if one came across a provision for the acquisition of shares—I doubt not that there are such—if it was found that the relative agreement was not scheduled to the enactment, one would still have difficulty because the agreements might somehow have been published by another means.
In my view it would be fairer for me to ask him if he can give me an example analagous to this case where an agreement to acquire a minority interest in a private company was published. That would be the interesting one. If some mechanism has been discovered in the past for dealing with this dilemma of preserving the confidentiality to which the House has always attached so much importance and, at the same time, meeting the wishes of the people who want to see the relevant documents, I will be glad to consider it. All I can do is point to the various Acts which have been passed in relation to the IDA and other State agencies involved in commercial matters. At an earlier stage I referred to the Minerals Development Company Act, 1941, which enabled and enables a Minister for Industry and Commerce to acquire mining businesses without any obligation to publish the relevant agreement. We must assume in the drafting of a Bill that if one wants to do something under it one puts it into the Bill—I am not a lawyer like the Deputies opposite but that is a good principle. There is no such statement in the Minerals Development Company Act, 1941; there is no requirement and in the IDA Act of 1969——
Under which it has never been refused.
It is not required and has never been done.
And never refused.
I decline to make a total volte face in current practice in one instance for the reason that I would damage the work of the IDA. I have had the circumstance where I thought it would be nice to know more details about certain things but the Deputy knows, as well as I, that if there is such a question by the tradition accepted by both sides of the House it is referred to the annual report. I have quoted the annual report in relation to one instance. The annual report contains very little. Why has that happened down the years if there were not good and adequate reasons for it which everyone understood?
Tell us one good reason in relation to an investment and not the ongoing work of the company but in relation to an investment by the State? Can the Minister tell us what damage could be done in this case to the company by this disclosure?
I have made it clear that I am not basing this on this agreement or on individual arguments in relation to the company.
And there is no precedent for what the Minister is doing.
I said that from the beginning and the Deputy's problem is to give me one example where there is an enactment requiring publication from 1941 through 1969 of agreements between the State and private companies in which it has a minority interest.
That is the only example in the history of the State.
There is no previous example although there are plenty of cases of its taking shareholdings in public companies. There are many cases of grants having been given, large quantities of money. That is a routine procedure. It has never happened.
The Minister has tried to draw a comparison between what is happening under this Bill and the IDA. I fail to see how he can justify his efforts to make that comparison. As far as the IDA are concerned, whether they make funds available to firms, native, foreign-based or otherwise, by grant, aid or otherwise, they are obliged to carry out a full and proper investigation and examination of that project and to be satisfied that that project is viable.
Is the Deputy suggesting that there was not a full and proper investigation into this project?
They are obliged to be satisfied that the project is about to go into production or is already in production before they make a payment. When the IDA make money available to such firms they also ensure that the money goes into the company for the full utilisation of it, to ensure job creation, more production and market viability. This is a different matter. The Bill seeks to permit the Minister to make more than £9 million available to a few individuals, tax free, without any reference as to whether all that money, or any of it, will go for the utilisation of the company, Bula. There is no reference to that. There is a vast difference between what the IDA do and what they are permitted to do and what the Minister is doing here.
The Minister, because of the veil of secrecy which he has made use of from the start has failed to clarify any of the points raised here, in the newspapers, on the radio or television. Surely, he must feel obliged to clarify these matters, if not for the benefit of Fianna Fáil then for the benefit of the people. Will the Minister clarify, for instance, the position with regard to the contradictions between him and Lazard, his own financial advisers?
This matter will come up later under the Bill and I will certainly deal with it.
We are entitled to seek clarification while we are still discussing the veil of secrecy the Minister is hiding behind. Now is the time to tell the people about this because it has been given plenty of publicity and questions are being asked about it throughout the country. I should like to ask the Minister why we had to have arbitration at all. What were the terms of the secret agreement that obliged him to go to arbitration in this case? How can we judge the security of this investment of more than £9 million? We cannot do that because of the veil of secrecy. How are we, or the people, to judge the quality of the Minister's case put before arbitration? How can we judge the effect of the lack of a full and proper study and examination of the arbitration award? How can anybody judge the capital requirement needed by this company? Can the Minister enlighten us on this matter? How are we to judge the ability of the company and those involved in it to finance the capital requirements of the company? The Minister would be asked such questions at any board room meeting. What do we know about the viability of this project because of the uncertainty created as a result of planning permission not being granted yet? We do not know anything about the conditions that may be imposed by the planning authority and such an authority is not obliged to be concerned about the costings of any company.
These are matters which arise on other amendments. I am anxious that the Deputy confine his remarks to the specific amendment before us.
While we are still discussing this veil of secrecy and because of the way this business has been highlighted outside the House by the media here, and in London, I want the Minister to clarify the points raised by speakers on this side of the House. Will the Minister say "yes" or "no" to the question put by Deputy O'Malley regarding the voting rights of the 41 per cent shareholders as against the 59 constituted by his 49 per cent plus the Wright 10 per cent? This is an all-important question. People should know whether he has locked himself into this position or not.
Both Deputy Barrett and Deputy Lalor ended their speeches by asking the Minister to answer the questions I asked.
And I have declined.
They may have slightly misread the situation. The Minister's silence is the most eloquent answer ever made to any question here. The answer is obvious and perfectly clear. It is not surprising that the Minister should wish to avoid formally going on record and confirming what his silence very eloquently states. There is only one member of the Government parties, apart from the Minister, who bothers to be present now and I suppose, through the Chair, I can ask him what does he think or what does anybody else over there think who may be asked to vote on this matter to preserve the veil of secrecy. What do they think about a situation in which first, the State has a minority holding and because it is a private company has no say in anything because it is out-voted both on the board and at a general meeting? When there is a chance that the smaller of the two distinct blocks in the 51 per cent might, as it were, come in the fullness of time, in the on-going situation that we hope will develop in regard to this mine, to the stage that there might be a falling-out between the Wright interests and the other interests and the Wright interests might think it proper to vote with the Minister they would then constitute 59 per cent of the company and yet the 41 per cent would make the decision. The Minister has reluctantly put himself into that situation.
If one wanted to speculate one could quite properly do so on this amendment which seeks to have this agreement published, about other things one is led to believe are in the agreement besides this abnormal voting rights situation. One could speculate on those at considerable length because what one hears is equally as disturbing as what one has correctly heard in relation to the voting rights of the shares and the inequality of the shares one with another. It might be better to reserve our speculation about the other undisclosed contents of the agreement to later amendments or sections or Stages of the Bill so that we can take them separately and go into them very thoroughly.
We are being asked by the Minister to accept that there is an absolute analogy between the IDA putting money into a company, whether by way of equity participation or by way of grant or loan and what is happening here and that if the IDA disclose only a limited amount about what they do in this respect, therefore nothing should be disclosed in regard to this particular company. I want to make it very clear to the House that the analogy on which the Minister relies is false and for this reason as well as the various reasons quite validly given by my three colleagues. It is false for this reason above all others, that the IDA when they take equity invest public money into a company. They actually contribute to the capital of the company, the equity capital, and the company use it in the course of business. They build or extend a factory or use it for whatever business they are in. They may buy machinery or vehicles or raw materials or whatever they need. That is not the position here. The Minister is not putting a farthing into Bula Limited; he is giving £9.54 million tax free to four individuals.
Let me repeat that I do not grudge these individuals their windfall, their manna from Heaven, but I would not be human—and neither would any of us—if we did not envy them. I do not begrudge them this and I am not criticising them, despite their impression that they are being criticised. More power to them if they can pick up £9.54 million. I am criticising the man who is giving it to them and I am showing that his analogy is false and that the investment by the IDA in a company is a valid one. It is something that we introduced and we support and we like to see it operating, the giving of grants by the IDA, large amounts of money to companies that are operating in order to help them to increase their work force or their output. These transactions are very helpful to the economy and the nation but they are investments by the IDA into the company whether through equity or grants. The public money that comes via the IDA from this House actually goes into the company to improve the company's performance, to enable it to do things that it could not otherwise do.
Apart from the hundreds of millions of pounds they have given in grants over the years there have been investments, as far as I know, in quite a number of companies, public and private. I think one of the most recent cases in regard to a large company where they took up equity was in a very well-known company, Cement Roadstone Holdings Limited. I think the amount they took up was £2 million, although I am not exactly clear on that. Cement Roadstone Holdings is a company which is publicly quoted on the Dublin Stock Exchange and possibly on the London Exchange also. As soon as they made this arrangement with the Minister they published, as they are obliged to do under the stock exchange rules relating to publicly-quoted companies, the full details to the extent relevant to investment of the arrangement which, in practice in a matter such as this, would almost certainly mean the entire details.
Similarly with any other publicly quoted company: they have no option; if they wish to retain their quotation on a recognised stock exchange they must publish these details. Even if they did not, the IDA report gives information in regard to them, as in the case of all these other semi-State bodies or those in similar situations such as Bord Fáilte—I do not think that applies now because Bord Fáilte are not giving and have not been giving any money to anyone for the past couple of years. But in the days when Bord Fáilte did give money for tourist development they published the details. Some of it went to resort development—for example, building a promenade in some seaside town. More of it went into hotels which were privately owned. The figures were all given. They built new wings, extra bedrooms or a bigger dining-room and the details were there for all to see. That was actual investment in the companies or resorts concerned. What is happening here is that there is not investment of one penny under this agreement we are not allowed to see.
That is nonsense.
There is not investment of one penny in the company. The shareholders are being paid for their shares and that is all.
Deputy Esmonde apparently does not understand what he is being asked to vote for. Does he not know that not one penny of this money is going into that company?
It is a purchase of assets.
There is no money going into that company. Is that not true? It is going to the shareholders individually, in their private capacity, and not one penny is going into the company and the development of the business.
It is a purchase of substantial assets——
What Deputy O'Malley said is true.
——and no amount of waffling from that side of the House will change that.
We should break this kind of thing gently to people like Deputy Esmonde. I would not rush it all together——
The Opposition take a very long time to say anything.
It takes a long time to sink in.
It has not sunk in yet.
We started at 3.35 p.m. and it is now 5.52 p.m. Deputy Esmonde now realises for the first time that not one penny of this £9.54 million is going into Bula Limited.
No, it is just that I am getting a little tired listening to——
As the Chair said we are reporting some progress on the matter, slow as it may be. I noticed that the questions I raised in regard to the constitutionality of this whole operation and to the fact that it flouts the basic tenets of our law were neatly side-stepped by the Minister. He referred to them but said "This is all lawyers' talk. The draftsman drafted this and he is the expert. The question of the constitutionality or propriety or otherwise of it from a legal point of view is a matter for the draftsman and no one else."
He might be paying the Deputy a compliment without the Deputy realising it.
The question of the constitutionality or otherwise of this or any other Bill is primarily a matter for this House and for this House only. This House has an obligation in the first instance, the other House in the next instance, then the President and then the Supreme Court as the case may be, to examine all Bills from that point of view. To my way of thinking, it seems incredible that we should be told that, because the parliamentary draftsman drafted it, it is grand and we should not be worrying about it.
There are a great many unanswered questions in relation to that aspect of the matter which all arise directly from the refusal of the Minister to publish an agreement. The Bill is meaningless, totally meaningless without the agreement. I have gone through this Bill. The agreement is referred to in six places and there are phrases like "subject to the agreement, the Minister may do this". How do we know whether the Minister can or cannot do it if we do not know what the phrase "subject to the agreement" means? We do not know that because we do not have the agreement. The phrase "in accordance with the terms of the agreement, the Minister may decide to do" is also used. How do we know the circumstances in which he can decide to do or not to do such a thing when we do not know the terms of the agreement?
Last week where it suited the Minister's book, he made selective disclosures of bits and pieces of the agreement. This week when it did not suit his book he said: "I am not answering any more questions about the agreement because you will get it all out of me if I keep telling bits now and again". Deputy Barrett and Deputy Lalor need not worry about what they thought was the Minister's refusal to answer my questions. They were very eloquently answered by a very eloquent silence.
It is regrettable that we will soon see the spectacle of 60, 65 or 70 Deputies marching through the lobby to say that this House must enact a law ratifying an agreement that 142 of the 143 Deputies have not seen. The consequences for the House and the country of doing this are very serious. If the principle of legislating into law documents, agreements and principles which have not been seen by the House is going to be accepted, we are entitled to ask where will it end.
This may only relate to taxation, but that is a very serious matter in itself. If that principle is accepted by Deputies without knowing what they are doing, going through the lobby to make it a principle, what is to stop them in principle doing it again next week in a criminal statute? What is to stop them creating a crime of which citizens cannot become aware but in respect of which a citizen will be penalised if he breaches a law that not alone he does not know but he cannot know.
The Deputy has the most wonderful imagination.
These are the kind of principles involved here.
Hans Anderson again.
These are the kind of things the Coalition members will have to live with afterwards when they see the consequences of their actions. It is their consciences, not mine. Debates in this House become increasingly unreal——
They certainly are.
Agreed.
——and the significance of this House as the principal institution in this State becomes considerably lessened by the fact that there is no attempt, and certainly no successful attempt, to reply to any of the argument from this side in relation to this matter. Nonetheless, because 60 or 65 people are forced to march through a lobby on a point they apparently do not wish to know anything about, we are asked to believe that that is good law and that is the right way to run this country.
It is deplorable that we are in this situation which was created by one man, the Minister for Industry and Commerce, who, for some reason he has not explained and none of us can fathom, asks us to pass a short Bill which has no meaning whatever without the agreement which was referred to six times. A refusal to accept this amendment will be crucial and we are now being asked to enact into law an agreement that 142 of us have not seen.
Amendment put.
The Committee divided: Tá, 52; Níl, 60.
Tá
- Andrews, David.
- Barrett, Sylvester.
- Brady, Philip A.
- Brennan, Joseph.
- Breslin, Cormac.
- Briscoe, Ben.
- Browne, Seán.
- Brugha, Ruairí.
- Burke, Raphael P.
- Callanan, John.
- Calleary, Seán.
- Carter, Frank.
- Colley, George.
- Connolly, Gerard.
- Crinion, Brendan.
- Cronin, Jerry.
- Crowley, Flor.
- Daly, Brendan.
- Davern, Noel.
- de Valera, Vivion.
- Dowling, Joe.
- Fahey, Jackie.
- Farrell, Joseph.
- Faulkner, Pádraig.
- Fitzgerald, Gene.
- Fitzpatrick, Tom (Dublin Central).
- Gallagher, Denis.
- Geoghegan-Quinn, Máire.
- Gibbons, James.
- Gogan, Richard P.
- Healy, Augustine A.
- Hussey, Thomas.
- Kitt, Michael P.
- Lalor, Patrick J.
- Leonard, James.
- Lynch, Celia.
- McEllistrim, Thomas.
- MacSharry, Ray.
- Molloy, Robert.
- Moore, Seán.
- Murphy, Ciarán.
- Noonan, Michael.
- O'Connor, Timothy.
- O'Kennedy, Michael.
- O'Malley, Desmond.
- Power, Patrick.
- Smith, Patrick.
- Timmons, Eugene.
- Tunney, Jim.
- Walsh, Seán.
- Wilson, John P.
- Wyse, Pearse.
Níl
- Barry, Peter.
- Barry, Richard.
- Begley, Michael.
- Belton, Luke.
- Belton, Paddy.
- Bermingham, Joseph.
- Bruton, John.
- Burke, Joan T.
- Burke, Liam.
- Byrne, Hugh.
- Clinton, Mark A.
- Cluskey, Frank.
- Collins, Edward.
- Conlan, John F.
- Coogan, Fintan.
- Cooney, Patrick M.
- Corish, Brendan.
- Cosgrave, Liam.
- Coughlan, Stephen.
- Creed, Donal.
- Crotty, Kieran.
- Cruise-O'Brien, Conor.
- Desmond, Barry.
- Dockrell, Henry P.
- Dockrell, Maurice.
- Donnellan, John.
- Dunne, Thomas.
- Enright, Thomas.
- Esmonde, John G.
- Finn, Martin.
- Fitzpatrick, Tom (Cavan).
- Flanagan, Oliver J.
- Gilhawley, Eugene.
- Governey, Desmond.
- Griffin, Brendan.
- Halligan, Brendan.
- Harte, Patrick D.
- Hegarty, Patrick.
- Hogan O'Higgins, Brigid.
- Keating, Justin.
- Kenny, Enda.
- Lynch, Gerard.
- McLaughlin, Joseph.
- McMahon, Larry.
- Malone, Patrick.
- Murphy, Michael P.
- O'Brien, Fergus.
- O'Connell, John.
- O'Donnell, Tom.
- O'Leary, Michael.
- Pattison, Seamus.
- Reynolds, Patrick J.
- Ryan, John J.
- Spring, Dan.
- Staunton, Myles.
- Taylor, Frank.
- Timmins, Godfrey.
- Toal, Brendan.
- Tully, James.
- White, James.
Tellers: Tá, Deputies Lalor and Browne; Níl, Deputies Begley and B. Desmond.
Amendment declared lost.
Question proposed: "That section 1 stand part of the Bill."
The section contains the definition of the agreement as the agreement of the 12th December, 1975. Unfortunately, as a result of the defeat of my amendment, we will have to debate the rest of the Bill in a total vacuum. We will not be in a position to refer to the document which is itself referred to six times in this Bill.
The other definition in this section is the definition of the company, which is defined as being Bula Limited. It is right to draw a distinction between two of the Bula companies which are directly involved in this transaction. The other one is a company called Bula Holdings, which is registered as an unlimited company. It was originally registered on 29th May, 1974, under the slightly surprising name of Frolic Investments. The following year the name was changed from Frolic Investments to Bula Holdings. Its file in the Companies Office, which of course is public, is not as informative as the files of most companies because this is a private unlimited company and it is not necessary for its shareholders to be set out as would be the case in a limited company. One of the documents on its file is the copy of the special resolution which was passed pursuant to section 141 of the Companies Act, 1963, on 9th December, 1975, which authorises the company to enter into this agreement which subsequently became known as the agreement of 12th December, 1975. This is the agreement we are not allowed to see because it contains some fact or facts which the Minister does not want the public to see. The directors of the company are set out, as are their directorships of other companies, and some of these may have some significance. I do not propose to go into that significance now or at any time unless I am forced to discuss the significance of these matters.
The file of the other company defined here as Bula Limited is also in the Companies Office but it is not as readily available as the other one. When my agents called on a number of occasions during the past couple of weeks the file was not there and the officials concerned were not sure where it was. I was able to get at least some of it copied by my searchers and there are a number of interesting matters which arise. In talking about what is in the file of the Companies Office I am not, of course, disclosing anything which is not available to any member of the public on payment of a modest fee. There are pages and pages of charges given by this company, Bula Limited, which, of course, have to be registered in the Companies Office in order to be valid. By referring to this, I am in danger of being accused by the Minister of being in some way "anti-Bula", which of course I am not. But one is entitled to draw the conclusion from the pages of charges created by this company on its assets and various undertakings that it is singularly in need of cash, and singularly in need of equity investment from whatever source it might draw it.
It is therefore tragic, if the Minister makes the decision—and let us forget whether we agree with the decision— to spend 9.54 million on equity ordinary shares in Bula Limited, that some at least of that vast amount of public money does not go into the company where it could do some good. It would be unfortunate that a lot of public money should be spent in relation to a company without actually being invested in it. In the debate on the amendment just concluded I drew the distinction between the IDA putting money into a company and helping the company, allowing it to expand, create more jobs, safeguard existing jobs, and what the Minister is doing here now, in that not one penny of what he is paying is going into the company.
The company is singularly starved for cash and it appears to have very heavy overdrafts with two banks which are secured by various charges and various holdings of land and mineral rights. The company, I notice, in March, 1976, bought a very small piece of land. It is described in the register as part of the lands of Windtown containing 1 rood and 2 perches approximately—that of course would be statute measure—being all the lands comprised of Folio 25756 of the register, County Meath. Such a small quantity of land could not have been wildly expensive; nevertheless it must have been expensive. It seems that a charge was created by the company in favour of the vendor who is named in the register of charges, to buy 1 rood and 2 perches of land, which is very fractionally over a quarter of a statute acre and perhaps slightly bigger than the site of the modern semi-detached house. Still there is a charge created for that, which seems to indicate that cash was not paid for that very small amount of land but that payment was made by way of a transfer of the land without payment, the money that was due being secured in favour of the vendor by a mortgage. The mortgage is dated 16th March, 1976, and it was registered on the 6th April, 1976, and the amount of the charge is £15,000.
There are, in addition to that, very extensive charges over all the undertakings of the company registered in one case in favour of the Governor and Company of the Bank of Ireland, and in the other case in favour of the Northern Bank Finance Corporation Limited. One of those is a floating charge. Another is a legal mortgage. There is a further legal mortgage; then there is a debenture, and then there is another mortgage. It all seems to indicate that there is an unusual under-capitalisation of the company.
On further scrutiny of their public file in the Companies Office one finds that 999,998 shares were issued. They were all issued together on a particular date and that date happens to be the 12th, December, 1975, which some of us might think was a coincidence; perhaps it was not. However, what struck me as more important than the date of issue of those shares is that they are described in the file concerned, Form 45, Return of Allotments made, 12th December, 1975, as having been allotted for a consideration other than cash—the whole 999.998 of them. The nominal amount of the shares so allotted is on Form No. 45, which was filed shortly afterwards and is described as £999,998, and no cash at all was paid for any of them. The other two, of course, which make up the million are what are called subscriber shares, and they were taken up by two solicitors when the company was originally formed. That is the normal process and no consideration would have been given for those two shares because they were taken up in a trustee or fiduciary capacity and transferred by their holders subsequently on the direction of the beneficial owners of the company. The form goes on to say that the consideration for which such shares have been allotted is as follows:
Conveyance of lands at Nevinstown, County Meath, to Bula Limited.
Conveyance appears to have been from various individuals and presumably from Bula holdings, but no cash was involved. That, I suppose, explains why there are so many charges, because it appears that basically there is no subscribed equity capital in this company and that, I want to repeat, is particularly tragic, that none of the large amount of money which the Minister is now giving to the four beneficiaries of his largesse tax free is going into the company, because there must be few companies that would need that kind of money or even some of it. Even a small proportion of it would be a godsend at the present time. If they were capitalised in terms of equity capital they would then be in a position to raise money from banks and elsewhere to finance their proposed operations, and until they raise equity capital—and the procedure we are asked to ratify in this Bill will not raise equity capital for them—they are going to be hamstrung in so far as the development of their operations is concerned.
There is nothing I have said on these matters that is not available to any member of the public who cares to take himself along to Dublin Castle and look up these matters in full detail. What is available there appears to raise certain question marks, indeed further question marks on this whole affair which is so riddled with question marks. These matters should be dealt with now by the Minister, particularly of the method that is proposed by the company of which he is about to become a 49 per cent shareholder to capitalise itself and to have paid up these floating charges, debentures, mortgages and so on, so that the company may, if they intend going into production, approach banks for the purpose of raising long-term finance to enable them to put the mine into production.
I note what the Deputy says but in relation to the points he makes on section 1, information, if not widely available, is at least available. I am not clear as to what comment Deputy O'Malley wishes me to make. If he would amplify a little what he has in mind I should do my best to answer him.
I am sure the Minister would wish to be helpful but I have spent about 15 minutes on this. I referred to the very large number of mortgages, debentures, floating charges and other encumbrances, to use a general word, which appear to affect the company and, so far as I can see, all their assets as well. I am referring to all the assets that the public would know about but perhaps there are other assets that are not affected. However, a floating charge normally would affect all the assets of the company. The overdraft and other mortgages I have talked of would seem to be a very heavy set of encumbrances on the company. I referred also to the issue of the shares for a consideration other than cash. These are the 9,998 shares. I drew the conclusion from that that no actual cash has been put into this company and I regretted that in these circumstances and having regard to the fact that £9.54 million was being made available to the shareholders, there was no provision in the agreement—at least so far as we know—whereby this money instead of going to the shareholders would go direct to the company as an equity investment in the way the IDA invest directly, whether by way of grant or by way of equity capital.
In the circumstances I asked whether there is anything in the agreement that would enable the Minister to put a few million pounds into the company in order that they might be capitalised properly from an equity point of view, because until such time as they are capitalised properly they will not be in a position to go on the market for long-term money to enable them to develop their mineral assets. The kind of money required will not be obtained in an overdraft situation of the kind that the company have been using up to now. On the contrary it is necessary to have, for example, long-term sales contracts, generally for about eight years, and to arrange a repayment of fixed-term loans by reference to these contracts. I do not think the company can even begin looking for those while they remain as heavily encumbered as the file in the Companies Office would appear to indicate.
I am informed that the encumbrances to which the Deputy referred were analysed very carefully in setting up the valuations. Apart from that the Deputy has asked me to comment on questions of management of the company, but it is not within my province to do that. It is perfectly within the compass of the company to raise the sort of money required in the light of the valuations available. As I told the House during the Second Stage reading, I understand that the various plans and methods of proceeding to obtain the moneys required for investment have been drawn up carefully and scrutinised. There is no other comment I wish to make except reiterate that the matters to which the Deputy referred were analysed very carefully and taken into consideration by my specialists.
Having regard to the fact that the Minister proposes spending more than £9 million of public money I do not think it unreasonable to ask him to give us some idea of how the company proposes to operate. Leaving aside the argument that arises in regard to how much money will be needed to put the mine into production, can the Minister indicate, even in general terms, where it is proposed to raise that money, having regard especially to the evidence produced by Deputy O'Malley which suggests that there is little, if any, cash in the company at present and that the more than £9 million which the Minister proposes to invest will not increase by one penny the amount of cash available to the company?
The sort of estimates I gave last week of the money required would not make a significant difference to the company in developing the mine even it they represented the normal amount of cash in the form of issued share capital. The procedure which is normal in these instances is to borrow and the Deputy is aware of the range of lenders available in such circumstances. With an asset of the kind we are talking of, the loan market is the place on which to obtain development capital and the Deputy is at least as familiar as I am with the range of lenders available.
Would the Minister accept that in the normal case in which one is trying to raise a substantial amount of cash for a purpose of this nature the prospective lender likes to know that the borrower is investing some of his own cash? In the event of such a situation arising, are there any plans for the company, or in particular for the shareholders in the company, including the Minister, to put up the cash for that purpose? Or does the Minister envisage the total amount required for putting the mine into production being borrowed with no injection of cash by the shareholders?
The figure I gave for the total amount of money required was £25 million. There would be no question of anything of that scale being inserted other than by way of borrowing. The Deputy knows that the types of borrowing sources one would think of would be, for example, the ECGD arrangements of the UK for comparable circumstances for other countries and also banking consortia and, possibly, the AIB. If money were required to be inserted into the company the quantity would be very much less than the £25 million. It is the norm to have much smaller amounts in issued share capital.
I cannot make any comment in regard to the sources or in regard to any plans for putting share capital into the company.
I do not understand the Minister. Would he agree that, in order to raise a sum of the order of, say, £25 million to put the mine into production, it is likely that a proportion of that amount would have to be produced by the company rather than it being obtained by way of a 100 per cent borrowing?
A small portion.
So far as some portion of that will have to be produced by the company, is it proposed that that will come from the shareholders including the Minister?
That is a reasonable supposition but I have no plans worked out in regard to that at the moment.
Would it be in the region of 5 or 10 per cent, more or less?
I cannot give the Deputy an exact answer. I have no briefing on this but I understand the issued share capital of Tara is about £? million, so if one were thinking along comparable lines it might be in the region of £? million from all sources.
Whatever the sum required from the company itself, that is the shareholders, would the money involved be contributed by the shareholders in proportion to their shareholding so that the State would pay 49 per cent of the sum required?
That is not settled.
The information we have got over the last five minutes on this section from the Minister is shattering. It bears out the case being made by Deputies O'Malley and Colley in relation to the Second Stage and in relation to our amendment. It appears that we can now take it that there is nothing in this agreement which involves anything except the Minister acquiring a 49 per cent shareholding in Bula and that no further plans have been made. As Deputy O'Malley has pointed out, when over £½ million has been paid out to Bula Holdings, there is nothing whatsoever to prevent them from putting this money into their pockets and sitting back and doing nothing. The Minister has explained today and previously that he reckons that it would take about £25 million to get this mine developed but as of now no arrangements have been made in relation to its development or in relation to working capital.
When, arising from this agreement, the Minister hands over the £9.5 million that has to be paid, he will hopefully join with the other partners in going ahead cap in hand to the banking consortia and to various other interests with a view to seeing how the £25 million can be raised on which we will find ourselves paying 49 per cent of the interest. The last reply I expected to hear from the Minister was that he did not know how much of the £25 million will have to be injected by the State. I am shattered to hear the Minister saying that after the passing of this Bill, plus the agreement, that we know nothing about, the job ends, and that we then have to sit down and hopefully his representatives will use their persuasive power on their partners in the new company to get them to join with them in seeking money. They will have the great advantage that they have the security that this State will be responsible with the backing of the Minister for Finance to go surety for any loan.
In the light of what the Minister has said about future capitalisation, it appears to be appropriate to discuss the point that was raised briefly last week at the rights issue. It would seem from reading the company file in the Companies Office and from what one reads about this company that the minimum equity capitalisation of Bula Limited should be a figure of about £4 million in terms of cash. There is no cash. There are heavy encumbrances. The Minister said that his advisers had gone into these encumbrances very carefully and that they knew the position in regard to them and so on. It amazes me if this is so, that still nothing was worked out regarding the likelihood of a rights issue and what the Minister's attitude would be in regard to it. The Minister told us last week, that there was a provision in the agreement of the 12th December, 1975, which enabled him to veto a rights issue. The Minister could if he choose, even though in the minority, say that there would be no rights issue. The Minister has the power to do that but whether it would be wise in the company's interest and his own interest as the largest single shareholder in it to exercise that right of veto is problematic. The Minister's financial advisers might well advise his not to exercise the right of veto.
If the figure of about £4 million capitalisation was agreed on and if there were going to be a rights issue in respect of that, the Minister would have to take up 49 per cent of it out of public money and that would be fractionally under £2 million. The company would have to capitalise itself properly anyway for the purpose of raising long term finance for the development of the mine. I am advised that the usual proportion of equity capital towards long term finance is about one in five or one in six. If we are to take the Minister's figure for development costs of about £25 million and divide it by six, that would give just over £4 million, which tallies with my estimate from the other point of view. It would suggest that whatever way the ball hops, the Minister will have to take up the rights of about £2 million. The House should know that so that the expenditure will not be £9.54 million but will be about £11½ million. I would more readily agree to the £2 million extra than the £9.54 million sought under this Bill because it would be an actual investment in the company. It would be productive and helpful to the company and, therefore, to the economy. It would be the right type of investment to make if the Minister wants to get involved in equity in mining companies that are totally embryonic.
We know that the taxpayers commitment will be about £11½ million but we must go a little further. We must examine the Minister's position and, therefore, the taxpayers' position in regard to guarantees of the borrowing. Charges on land or minerals will not suffice for the banks that will lend long-term finance. That is only a very small aspect of their security. It could be an unrealisable part of their security. They will want two other things. They will want long-term sales contracts for concentrates and they will want the repayments tied in or locked into them. In addition, they will want guarantees from the shareholders and the directors. Of course the most attractive potential guarantor of all is the Minister for Industry and Commerce because he is a corporation sole with perpetual succession——
Next to the Minister for Finance.
Yes. Next to the Minister for Finance he is the best of all. The Central Fund is there to underwrite the Minister's guarantees and, therefore, one would anticipate that the banks concerned, who will be lending £25 million, £35 million or £45 million, will actively seek his guarantee. If anything goes wrong one guarantor stands to lose and one would like to know the Minister's, and the taxpayers', potential liability in this respect.
The Minister was at pains to tell us on the previous occasion, in the media and at certain parts of today's debate, that every aspect of this matter has been gone into if not by him personally certainly by his advisers. These are questions that would immediately spring to the mind of any potential purchaser of shares. They are the first questions any potential purchaser would ask. How is he going to stand vis-á-vis a rights issue and how will he stand vis-à-vis guarantees, especially if he is a particularly attractive purchaser in the form of a Minister who it would have been thought up to a few years ago could never go bankrupt or into liquidation? One is less certain now about these possibilities, but nevertheless as a corporation sole his chances of going into liquidation are less than they would be in respect of even the wealthiest person in the land.
Therefore, a prudent and knowledgeable purchaser would certainly have acquainted himself with all these problems, would have asked the questions and would have satisfied himself with regard to the answers. They are not technical matters. They are fundamental matters to anyone who engages in the jungle of commerce or as the Minister described it last week, perhaps more aptly than he thought in relation to a company such as Bula, in "horse trading". The answers to these questions should be readily available to the Minister and I consider it in the public interest that he should give those answers now.
The Deputy has indicated his understanding of the situation in his last sentence. We are dealing with section 1 of a Bill on Committee Stage, a section that consists of definitions. On the debate on this section the Deputy has widened the question enormously to ask me about specific matters in very considerable detail. I know that the sort of questions he has raised were the questions raised by my staff in the detailed investigations. They are the kind of questions that would have to be considered by experts. What we are doing here is bringing into Committee Stage the discussion of small detail, of a kind that has not been raised in other contexts of State grants and investments.
There is no Bill.
When there is no Bill it is done invisibly and nobody knows about it.
The Minister brought in the Bill.
Yes, I did. When we spend the £60 million per annum I spoke about earlier this kind of thing goes on. One has serious professionals who look at a project, who do their work on it and who come to a conclusion. However, it has not been our practice to try to run industrial companies through the Oireachtas. There is a distinction between the Legislature and the Executive and the checking is not done by individual Ministers who do not possess the expertise. The checking is done by professional people who are neutral, who are fair and skilful. The functioning of any State relies on the judgment of such individuals. The pursuit of fine detail in the Oireachtas is in total breach of what we normally do.
Why did the Minister bring in the Bill if he did not intend to give the House that kind of information?
That is not fair. A perusal of the Official Report will indicate that that kind of request for fine detail and for the commercial plans——
Not commercial plans—capitalisation.
All right. The Deputy uses a slightly different word.
Progress reported; Committee to sit again.