I move amendment No. 5:
In page 2, after line 28, to add a subsection as follows:
"(4) The sum referred to in subsection (1) of this section shall not be paid until a motion to that effect shall have been passed by Dáil Éireann, which said motion shall not be moved until after the Agreement shall have been laid on the table of each House of the Oireachtas."
The agreement, of course, is defined in section 1 as being the agreement of 12th December, 1975, which is the written version of an agreement which was apparently verbally come to earlier by the Minister with the shareholders in Bula Ltd. who are to be paid in respect of this deal.
The House last night declined to change the consideration figure of £9,540,000 which is to be paid to the vendors, not, I want to emphasise again, to be invested in the company but to be paid personally to the vendors without any reference to the company. The Bill contains six references, in a very short space, a little over a page, to this agreement. This section, in fact, contains two. In subsection (1) it says:
The Minister may acquire shares of the Company in accordance with the Agreement...
This is not simply the buying of shares and that is the end of it. The Minister may only buy the shares in accordance with the terms of the agreement. We in this House do not know—and I cannot repeat this often enough—what the terms of the agreement are. We do not know what way he is buying them in accordance with the agreement. We have established a couple of points. We have established, for example, the very important point—the Minister did not tell us; I told the House and the Minister afterwards confirmed it was right—that the shares do not rank pari passú. It is highly damaging to the position of the State and of the taxpayers that this is what is meant by the phrase “in accordance with the Agreement”. We are entitled to ask how many more such provisions are in the agreement that render unattractive from the point of view of the tax-payers, the purchase of shares from private shareholders. The Minister, by reason of his incredible and unsustainable secrecy, is responsible for the public speculating in this way. This secrecy is not for the purpose of any commercial consideration but in order to avoid the disclosure of matters that would be damaging from the Minister's point of view and to avoid the revelation that this deal which, on the face of it, is a bad one, is even worse than it appears.
This amendment seeks to have the money held up, or not paid, notwithstanding the passage of the Bill, until a motion to release it is passed by the House. What we are seeking is not an uncommon provision. It is merely requesting the passing of a motion by Dáil Éireann for the purpose of allowing moneys to be paid.
Apart from seeking to provide for a motion of this kind, another purpose of the amendment is to give the Minister an opportunity to mend his hand in this regard in that, if, as it appears, he is not prepared to produce the agreement now—I suggest that this is the right time to produce it—at least when the Bill is passed, if it ever becomes law, and there is some doubt in this regard, taking into account the provision of Article 13 of the Constitution, the agreement would be made available to the House. Consequently, at that stage and for the first time, the House will have an opportunity of assessing whether the payment should be made. The Minister suggested that in some way this company would be damaged commercially should the terms of the agreement be disclosed. In view of his stance on this issue, I should like to make a fair analogy and to ask the House to assume that Bula Ltd were a public body, rather than a private body, offering 192,000 shares to the public for subscription. In general terms, I wish to enumerate the sort of prospectus which, under the rules of the Stock Exchange, and the rules of our Stock Exchange are less strict in this regard than are those of many other Stock exchanges, the company would have to publish and make available to any member of the public who was interested or who, potentially, would take up shares in the company.
There are a number of headings which normally would appear in a prospectus of that kind. I shall not go through what would be the equivalent of a full prospectus but shall concentrate on a few basic provisions. Normally, the first heading in a prospectus offering shares would be one which would read: offer for sale of shares. In this regard we would have to reword that in respect of the case we are talking of to make it read something on the lines of "we demand that you buy 192,000 shares, being part of 1,000,000 shares issued to the vendors and issued for a consideration other than cash."
The second heading in a prospectus of this kind—I contend that the analogy is valid since the public are being asked to take up these shares—would be a statement by the directors of the company of their past trading profits and the dividends paid. Normally, this would cover the last five years of the company's trading history and would have to be certified not only by their own auditors but also by independent accountants appointed by the bankers who were underwriting or supervising the offer. Unless that could be done the rules of the Stock Exchange, in this or in any other civilised country, would not allow shares to be offered because the view would be taken that this was one of the issues on which prospective purchasers of shares would need to have information.
Obviously, in the case in point there is no history of profit and there are no underwriters except, in effect, the taxpayers because the deal amounts to an issue of shares to each of 3.1 million people. There are no independent accountants reporting to the public on the accounts and there is no dividend history. Therefore, because these provisions, among others, have not been complied with, there could be no question, under the terms of the Stock Exchange, of an issue of shares to the public.
The third heading that one would see normally in the prospectus of a company issuing shares to the public would be one on such lines as application of the proceeds of the issue or of the sale of shares. Normally, this would indicate the use which a company whose shares were being offered, proposed for the moneys subscribed. In the case we are talking of the company receive no money because all the moneys are going to the shareholders. Consequently, even if they were in a position to do so, and I doubt that they are, they could not inform the public as to the use to which the money would be put. They would be private shareholders who would be getting the money but even if this were not so the paucity of information we have in regard to the company's capitalisation plans or their production plans, all caused by the doubtful situation in relation to planning permission, would render it impossible for the company to comply with that provision.
The fourth heading would be a director's statement as to the essential capital requirements of the company, both in the short term and in the long term. This is the statement generally which certifies that the company have adequate resources for their foreseeable needs. It is a requirement of the Stock Exchange that the directors would certify that statement. In this case the directors say they will need about £25 million, perhaps more, but they do not say how, or on what terms they will raise the money. Neither do they tell us what are to be the duration periods of the loans or on what security the capital is to be raised.
The ordinary company trying to raise money from the public would immediately be knocked if they could not fulfil that condition or if the directors were not in a position to fulfil the condition as they are not in this case.
The Minister has been asked time and time again for this information and has refused to give it. The Minister has refused because he cannot say and does not want to speculate in that regard.
The fifth heading would be the details of the directors and their beneficial shareholders in a normal prospectus. This would normally indicate the experience of the directors in the relevant business, in this case the mining business. It would indicate the duration of that experience and their shareholding in the company. In this case the position would be that the prospectus would have to say that the directors have no previous experience in the mining business. So far as I know, that is the case and it has not been suggested by the Minister that they have previous experience. I must emphasise that I am not trying to criticise Bula or its directors but in considering the company I must relate the facts. If these are painful or hurtful to the company, I am sorry. We have no information as to the beneficial interest in the company of the directors. On the face of it, this may appear to be surprising, but it is not, because apart from the Wright shareholding which we know of, all the other shares, apart from the Minister's proposed shares, are held by a private unlimited company called Bula Holdings. The shareholders of Bula Holdings are not disclosed in the company's office file in relation to Bula Holdings. I am not being critical of that fact. There is no obligation under the Companies Act, 1963 to disclose the membership of a private unlimited company. We are left in the position that 80 per cent of the holdings of Bula Ltd. as things stand now are in the name of a private unlimited company and we do not have the beneficial ownership of the shares in that. Because of that, if this were a normal public issue subject to the normal rules, it would fall down.
The next heading that one would expect to see in a prospectus for a normal public company would be on the lines of a profit and dividend forecast of the directors. Normally, this is regarded as a test of the ability and credibility of the directors and the management of the company. We have asked time and again for this in respect of this company and in respect of what the Minister proposes to do. We have got no profit forecast, and no dividend forecast, either the amount or the likely time when it might be paid. On the evidence it would appear that at least eight years will have to elapse from the date of the start-up of the company before any dividend on earnings that would be attributable to, or available for distribution to the ordinary shareholders would arise. Even on the most optimistic basis, start-up production could not be earlier than about two years from now. One must bear in mind that the planning application is in every sense back at square one. It will take a very long time from after it has been relodged to process this difficult planning application. Up to about two weeks ago the planning application had not been relodged. Inevitably there will be an appeal and almost certainly there will be an oral hearing on this appeal. If the ordinary public company offering shares to the public were not able to give a profit and dividend forecast that would be the end of it. Again, the Minister's proposed purchase falls down on that aspect.
The seventh heading one would normally see in a prospectus of a company asking the public to subscribe would be roughly on the lines of details of assets and liabilities of the company. These are normally based on accounts prepared by the company's auditors and examined and confirmed by independent accountants appointed for that purpose by the bankers who are handling the issue and who normally underwrite it as well. It is normally presented in the form of a certified balance sheet which is usually endorsed by the directors and endorsed independently. The balance sheet would list the issued capital, the reserves, the fixed assets and the liabilities. Where these assets are in property, details are normally given of the tenure of the property and of the extent of the holdings, with a directors' certification for which the directors are personally liable. As well as that, an auditor's certification would be given and an independent valuation of the property made by some well-known firm of valuers. The bank balances, the value of work in progress, and the value of stocks would be given. In this case we know some of these details but I suggest to the House that what little we know about them are known as a result of myself and my colleagues giving the details to the House so far as we could ascertain them. It was not from anything the Minister told us. For example, we gave details of the charges on the company's assets, we introduced the fact that the company had received no money in cash or cash subscriptions for the million shares they had issued. We have been told that there were valuations for the company's assets ranging from just marginally under £1 million to £106 million. The actual price being demanded for the shares that the Minister is buying was fixed by a panel of arbitrators acting in a manner described by the Minister as horse trading.