I wonder whether, since the discussion on this section last week, the Minister has had an opportunity to consider the point I made in regard to the deletion of the words in subsection (3) "and subject to the Agreement" which were contained in amendment No. 12 in the name of Deputy O'Malley which, as the Minister will recall, he accepted. He will also recall that I raised the point at the time that it would appear from what the Minister had told us that these words may be necessary.
Bula Limited (Acquisition of Shares) Bill, 1977: Committee Stage (Resumed).
Question again proposed: "That section 4, as amended, stand part of the Bill."
I do not wish to add anything to what I said about this matter last week.
The Chair will recall that a number of questions were asked by me and Deputy Colley in relation to various aspects of this company in which the Minister is buying shares. The Minister did not have the information available to him, nor did the four advisers who were with him in the House. He said he understood the information was available in the Department and that it would be given on the following day, Wednesday of last week. Though the Bill was ordered for Wednesday, at the last minute it was taken out, and for that reason we did not have the opportunity to get the information. In the circumstances, would the Minister give the information now?
The situation was that we had passed on from that section to subsequent sections. I have information here but I think it would be appropriate to follow the normal order of dealing with such matters.
We must first of all dispose of the section we are discussing, section 4, as amended. We cannot do anything else until we have disposed of the section before us.
I wonder if we are at cross purposes. In his reply now, was the Minister referring to information sought on section 2?
Yes.
Deputy O'Malley is referring to matters arising out of section 4.
The Chair also was under the impression that reference was being made to section 2. Questions on section 4 would be in order.
This arises on both sections. It relates to the question of indemnifying directors of Bula under article 11. I raised the matter again, admittedly not as fully as I had done on section 2 before discussion on that section was postponed. Section 4 refers to shares being transferred by the Minister into the name of a nominee, and when we inquired the reason we were told it might be necessary for the directors appointed by the Minister under the secret agreement of 12th December, 1975, to hold a share. The discussion then went on to consider the position of those and other directors in the company in relation to article 11 of the articles of association which gives directors indemnity for any difficulty they might be in.
At the time, the Minister said they did not give the guarantee in their capacity as directors but as shareholders. I should have adverted on the last day, but unfortunately due to the complications of the matter I did not, to the fact that the four directors who gave the guarantee are not shareholders. They are directors only. The only two registered shareholders of Bula are those of Frolic Investments, now known as Bula Holdings, an unlimited private company who are registered in respect of 80 per cent, and Patrick Wright, since deceased, who was registered in respect of 20 per cent. Therefore, the Minister's contention on the last day that Roche senior and Roche junior and Messrs. Wymes and Wood gave the guarantee under the secret agreement in their capacity of shareholders is not right. It was in their capacity as directors, because they are not in fact shareholders. Bula Holdings, formerly Frolic Investments, are the only shareholders other than the late Mr. Wright.
I referred the House to the company's office file and what I have been saying is what is set out in that file at the latest state in which it is available for inspection by the public. I should like the Minister to deal with that point.
I am a little confused in regard to procedure. I thought that point came up and was discussed on section 2 and that it was dealt with under that section and, in my wish to avoid unnecessary repetition, I do not think we should have this matter discussed twice round. It would not be a reasonable way to proceed.
I would point out to the Minister, as has already been pointed out by Deputy O'Malley, that this matter was, in fact, discussed on section 4 and not unreasonably, having regard to the provisions of section 4 which envisage the transfer of shares by the Minister to a nominee. The only obvious reason why this procedure might be necessary at all would be if the holding of a share or shares were a necessary qualification to be a director and if the Minister wished to appoint certain people as his nominee directors and if in order to do so, to qualify them, they would have to hold a share or shares, then the provisions of section 4 would apply. This clearly raises the issue as to the position of directors in this company.
Deputy O'Malley has pointed out that under article 11 of the articles of association of the company a director of the company who gives a guarantee is indemnified by the company against liability on foot of that guarantee. As a result it would appear that if the Minister sought to enforce a guarantee which he has, apparently, under this secret agreement—in other words, if he were dissatisfied with the actions of the company or the inaction of the company in developing the mine—he would have power under this agreement, on foot of a guarantee apparently contained in it, to enforce that guarantee against the parties to the agreement personally. Deputy O'Malley was pointing out that under article 11 this would mean, in effect, that the Minister was trying to enforce a guarantee in respect of which he was 49 per cent responsible and this was on the face of it a ludicrous position. The Minister replied to that by saying that the people concerned had not given their guarantee as directors which would entitle them to this indemnity but rather as shareholders. Deputy O'Malley pointed out that this argument is not correct because these people are not shareholders but they are directors. It would appear, therefore, in the absence of any other explanation from the Minister that the position is as originally set out by Deputy O'Malley, that is, that such guarantee as the Minister has received in practice cannot be enforced or would be enforced by the Minister against himself, at least to the extent of 49 per cent of whatever liability arises on the guarantee. That is a ludicrous position. It is such that there is an onus on the Minister now to explain to the House why the position is not as we have outlined it, if in fact it is not, or alternatively if the position is as we have outlined it, to acknowledge that it is so and let us consider what can be done about it.
I am not trying to be procedurally obstructive but I must insist that this was in fact a section 2 discussion and I will be happy to come to it when we get to section 2, but I do not wish to have this discussion perpetuated needlessly by discussing things under a number of sections. It was raised on section 2 and presumably it was in order on section 2 and I submit that that is where it should be taken.
It arises equally relevantly on this section and on section 2 and there is no question of its prolonging the discussion because if the discussion is not held on this section then it will be held when we go back to section 2. But if the Minister wishes to withhold the information until such time as we get back to section 2 that is his affair and I will not make an issue of it. I would have thought that it would be better if we clarified the situation in regard to these matters at an early time because I am afraid that the Minister made a number of statements the last day which were wrong, on the face of it. These matters should be clarified. First of all he said he did not know anything about it but he went on afterwards to seek to make some statements which apparently do not stand up in the circumstances. However, I will not raise any objection.
Question put and agreed to.
SECTION 5.
Question proposed: "That section 5 stand part of the Bill."
Section 5 states:
All moneys required from time to time for the acquisition under this Act and pursuant to the Agreement of shares of the Company shall be advanced out of the Central Fund or the growing produce thereof.
Having regard to the amendment accepted earlier by the Minister which refers to not less than 49 per cent of the issued share capital, I think it is amendment No. 3, could the Minister say whether in his view section 5 authorises the acquisition by him or by the State of more than 49 per cent of the shares or whether it is his view that the wording of the section in conjunction with the wording of the agreement confines the State share to 49 per cent?
My understanding is that the two sections taken together confine the State's holding to 49 per cent.
I presume we may take it that the fact that the Minister accepted the earlier amendment means that it has been his intention and is his intention to restrict the State's share to 49 per cent and not to envisage the acquisition by the State of more than 49 per cent.
It is a hypothetical situation. I would not offer any binding commitment on myself in the future or on a successor in this Department but what we are now looking for under this Bill is as the Deputy indicates.
Does it follow from that that if at some stage the Minister or his successor wished to acquire a greater share than 49 per cent further legislation would be necessary?
I could not answer that question with certainly because I do not know whether, in fact, a new Bill would be necessary.
But the Minister does take the view that the Bill as it is now authorises only 49 per cent and no more? It does not authorise anything more than 49 per cent?
That is my understanding of the Bill and its intention.
How does the Minister reconcile that reading of the Bill with the provision in the secret agreement of the 12th December, 1975, whereby if control of the 41 per cent interest that will exist after the Minister's purchase and after the gift to him of that 41 per cent changes significantly out of its present hands, the Minister is then entitled to acquire a further 2 per cent in order that he will retain or obtain for the first time control of the company? If the Minister's understanding of the effect of this Bill is to allow him to acquire not more than 49 per cent, does that mean that, if this situation arises, he does under the secret agreement become entitled to buy another 2 per cent out of the 41 per cent and does that mean we would then need further legislation to enable him to do that or is it his intention not to take up that potential option of the further 2 per cent?
I have made my position about the agreement clear over and over and I have made the position about my understanding of this section clear just now and I do not propose to discuss the assumed or hypothetical contents of the agreement further.
I do not think it is correct for the Minister to say that the contents as outlined by me of some of the provisions, and we have only come to some of them so far, are assumed or hypothetical. We had a pretty long discussion earlier on the fact that the shares in the company are not pari passu in the sense that they do not have equal voting rights. The Minister's block of 24 plus 25 is actually in a weaker position than the Bula holdings block of 41 and the Bula holdings block of 41 can still out-vote the Minister plus the Wright share of 10 per cent in certain circumstances. I think we have established that, even if we have only established it by default, and nobody has so far said it is wrong. The Minister agreed at some stage in the debate that the shares did not carry equal voting rights. In those circumstances, is the Minister aware of the difficulty he is creating for himself or for any successor of his who might have an opportunity of buying a majority control of this company but who will be excluded or prevented from doing so by the interpretation the Minister has given the Bill, namely, that it prevents the acquisition of more than 49 per cent of the shares?
The Deputy is failing to take into account the provisions of section 2. Section 2 provides: "The Minister may acquire shares of the Company in accordance with the Agreement...." Whatever can be done in accordance with the agreement will be authorised by law and the only possible limitation that would be placed on what the Minister can do seems to me to be that the Bill sets out an aggregate figure and, if the aggregate is exceeded, then authority from the Dáil to spend more would be required, if that is what is required by the agreement, but I certainly think the terms of the agreement can be carried out by this Bill when it is enacted.
The Attorney General's intervention is interesting because he does not deny what I have said.
We cannot go on denying.
He refers to the agreement and says the Minister can do certain things in accordance with the agreement and he conveniently overlooks the fact that we are still, even at this stage of the debate, essentially debating the provisions of this agreement and we have never seen it, which causes the debate to be prolonged unnecessarily and, indeed, to be carried on in a quite extraordinary atmosphere in that the Attorney General can stand up here and say the Minister can do a, b and c provided the agreement authorises him to do a, b and c. A few minutes ago the Minister told us he could not acquire more than 49 per cent and, by implication at least, the Attorney General now seems to be saying the Minister could acquire more than 49 per cent.
We are being put in an impossible position. There appear to be two points of view. We are referred back by the Attorney General to the phrase in section 2 "in accordance with the Agreement" and that, of course, is our objection to this whole procedure. It is no good the Attorney General referring us to the agreement if he will not show it to us. How can we know what the Minister can or cannot do if we do not see the agreement? Never before, as we have shown repeatedly, has a Bill which refers six times to an agreement not had that agreement published in conjunction with it. It is not enough for the Attorney General to say the Minister can do whatever the agreement allows him to do if he will not publish the agreement. I pointed out one of the provisions in the agreement with which the Minister on his own say this afternoon could not comply. He says he cannot buy buy more than 49 per cent. There is provision that in certain circumstances he can acquire 51 per cent. I think the circumstances are unlikely but nonetheless they could arise. The Minister has told us what he cannot do and the Attorney General says the Minister can do whatever the agreement allows him to do. It is all very frustrating, to say the least of it, and without precedent to try to legislate in these circumstances. How can this House legislate properly when we are told by the Attorney General that the Minister can do whatever the agreement allows him to do and we do not know officially what is in the agreement? I have given one provision in the agreement which would contravene the Minister's statement to the extent that it would prevent him acquiring the 51 per cent he could in certain circumstances acquire under the agreement.
I would like a little clarification. I do not know whether the Attorney General was here when I referred to the terms of this section— in fact, I read out the section—and I adverted to the amendments which had already been made and asked the Minister did he, as the Bill now stood, understand it to mean that the State was restricted to an amount not exceeding 49 per cent as its share and the Minister said that was his understanding of the position. There was a restriction to 49 per cent in the amount of shares which could be acquired by the State. That is quite clear. What is not clear, arising out of what the Attorney General said, is whether the Attorney General agrees with that interpretation or whether he is saying that, in certain circumstances, if the agreement so provides, more than 49 per cent can be acquired. Could we get some clarification of this? Which is the official view of the meaning of this section and of the rest of the Bill?
The question is based on a paraphrase of what the Minister said and I think the record will make clear what, in fact, the Minister said. I was dealing with the query raised by Deputy Colley initially as to whether it is necessary to come back to the Dáil at any time. I pointed out that, whatever the agreement permitted to be done, whatever contractual arrangement was entered into by the Minister was going to be sanctioned by this Bill under which he is given power to do certain things. One would want to be living in a very restricted world not to know that the Opposition have taken objection to the fact that the agreement had not been made public. I am well aware of this. The point I was making was that in relation to coming back to the Dáil whatever is in the agreement can be carried out by the Minister. The Opposition object to the fact that they do not know. All I am saying in relation to coming back to the Dáil is that if there are powers in the agreement which the Minister wants to carry out he can do so as a result of this legislation. The only circumstances at the moment in which I would see any necessity for further intervention by the Dáil would be if the aggregate sum referred to in section 2 is exceeded.
I am afraid the position has not been clarified by the Attorney General's remarks. I put a very specific question to the Minister. I referred to the terms of the Bill as amended and to the fact that this section contains a specific reference to the agreement. The section refers to "... the acquisition under this Act and pursuant to the agreement of shares...". In response to my question the Minister quite unequivocally said that the position as he understood it was that it would not be open to the State to acquire more than 49 per cent of the shares of this company under the Bill as drafted. Of course this includes the agreement.
The Attorney General appeared to be saying something different. He said if the agreement provides for the acquisition of more than 49 per cent then the Bill as drafted allows for that. I am inclined to agree with the Attorney General's view of the situation but I specifically put this question to the Minister. The Minister answered it quite specifically but it was a different answer from that given by the Attorney General. I suggest that if we cannot see the agreement at least we are entitled to get a specific reply to a specific question.
In the light of the discussion that has taken place, I should like once again to put that specific question. It is: Having regard to the terms of the Bill as amended so far, and those terms include the references to the agreement, and having regard to those provisions, is the State restricted to 49 per cent of the shares of this company in so far as it may acquire shares?
The amplification given by the Attorney General is entirely in accord with my understanding of the situation. I could add we are restricted simply because of the money provision. The sum provided for in the Bill is a restriction. The Attorney General and myself are not in disagreement about that.
I presume the Minister appreciates I raised this question specifically on this section which refers to the advancement of money out of the Central Fund for the acquisition of the shares. It is not accidental that I raised the question on this section. The Minister now appears to be saying that because of the restriction on the money being made available there is a restriction to 49 per cent of the shares. If I understand the Minister correctly that is the argument he is making.
I understand that argument in so far as it goes but I suggest it does not square with what the Attorney General has said. Under the terms of this Bill either the State's share is restricted to not more than 49 per cent of the shares or it is not. That is straightforward. The State is so restricted or it is not. Is the Minister saying the State is restricted to 49 per cent or that it is not restricted?
The Minister has said already that it was restricted.
Nevertheless I put the question again in the light of the subsequent discussion.
With regard to those alternatives, there can be a position to which neither will apply. The Opposition are asking me to make commitments about hypothetical situations and about the future which it is not possible to do.
My question relates to the Bill as it stands. It has nothing to do with hypothetical situations. The question is: on the Bill as it stands, is the State's share restricted to 49 per cent or is it not?
The restriction in the Bill is the restriction of a sum of money.
The Minister says the restriction in the Bill is a restriction related to a sum of money. He will recall that earlier he said quite specifically that the Bill as it stands restricts the State's share to 49 per cent.
I do not think the record will sustain that interpretation.
If it is not interfered with it will sustain it.
The Minister said that quite specifically. I am trying to find out now if the Minister is withdrawing that statement and saying the only restriction relates to the money being provided. It is a basic question arising on the Bill as it stands and we are entitled to an answer.
I have been as helpful as I can. The record of this discussion has been made and I can simply refer people to that record.
Obviously there is no point in pursuing this matter. The Minister was asked a specific question by Deputy Colley and he gave an answer. In fact, my recollection is that he repeated it.
He did.
Deputy Colley wanted it made very clear and he put it to the Minister again. The Minister actually repeated what he said. He said: "My understanding of the effect of this Bill is that it does not allow the State to acquire more than 49 per cent of the shares in this company". That is what the record will show.
The Attorney General then came along and Deputy Colley raised further matters arising out of that point. The Attorney General then intervened to reply to Deputy Colley and he gave what was essentially a different answer to what the Minister had given. Then the Minister and the Attorney General found themselves in the position that they had given different answers to the same question. Deputy Colley and I pressed them to reconcile their answers. The Minister's method of reconciling them was to say there was no conflict; he said he was now saying the same as the Attorney General. He may now be saying the same thing as the Attorney General but he did not start off by doing this.
This is a demonstration of how incredible this debate has become. On the last day when we discussed this Bill we had to do something I had never heard of in the House before and I have not met anybody else who had heard of it either. The key section, the kernel of this Bill, had to be put back to another day so that the Minister and his advisers might get some information about various fundamental matters that were raised.
Today we have a very unusual situation in this House where, in order to help him, the Minister has brought along the Attorney General to answer some of the questions. I have never seen or heard of an Attorney General coming to this House to answer questions for a Minister and it is unusual to say the least. I am not objecting to it. It is commendable that the Attorney General would participate in debates in this House even though it has not been his practice to do so during the past four years. It is commendable that he is doing so now but it is also significant that he had to do so on this debate.
The best thing to do with the point at issue is simply to pass from it. Perhaps we will put down an amendment on Report Stage that will enable this matter to be clarified once and for all. It will enable the Minister and the Attorney General to have a conference outside the House at which they could reconcile their views on when the House could be given some information that would enable it to judge whether or not this provision should be passed.
I should like to draw the attention of the House to the words "and pursuant to the Agreement". Having accepted the deletion of the words "and subject to the Agreement" in subsection 3, to be consistent the Minister should agree to delete the words "and pursuant to the Agreement?" in this section. The presence of these words raises the question of the absence of the agreement and the secret nature of it. The House might be willing in its wisdom or otherwise to vote moneys from time to time for the acquisition of shares but the House might be quite unwilling, if it saw the agreement, to allow moneys to be advanced out of the Central Fund for the purchase of shares. It seems logical that if the words "and subject to the Agreement" are deleted the words "and pursuant to the Agreement" might be deleted from this section. I have not put down an amendment to this effect because I was not sure that the Minister was going to accept my earlier amendment which he did. Having done so, it would seem logical to do it now by agreement, or I could put down a further amendment on Report Stage.
The two sections are different. Section 4 (3) deals with what the Minister for Finance can do as a result of this subsection. It was not considered necessary to leave in the words "and subject to the Agreement" because without those words the section would permit the Minister to do what is necessary. Section 5 deals with a separate matter. In order to give the required legal power to the Minister these words are necessary.
Presumably the Attorney General appreciates that the words "and pursuant to the Agreement" would not appear to be necessary unless the agreement provides for the acquisition in certain circumstances of more than 49 per cent of the shares to which we have been referring. If one assumes that the agreement does not provide for that, why should these words be necessary?
I was dealing with the arguments about the apparent illogicality that was suggested, and pointed out that they are two separate functions. This is why it is necessary to keep the words in section 5 and not in section 4.
Question put and agreed to.
SECTION 6.
I move amendment No. 13:
In page 3, lines 19 and 20, to delete "a Minister of State" and to insert "the Minister for Finance".
This amendment is down for the same reason as amendments Nos. 7, 8, 9 and 10.
The wording of this section arises from the situation where the shares may be held for a period by the Minister for Industry and Commerce before they are transferred to the Minister for Finance. I consider the present wording to be appropriate. On the other hand, the proposed amendment will not give rise to any difficulty and I accept it.
Amendment agreed to.
Question proposed: "That section 6, as amended, stand part of the Bill."
Unfortunately, the less important half of my amendments has been accepted, but it is promising enough in the circumstances. We might be equally wise on Report Stage and twice as wise when the Bill reaches the Seanad. Section 6 provides for the payment of dividends and other moneys received by the Minister for Finance in respect of ownership of shares. Would the Minister tell us what the words "other moneys" mean?
I am informed that this is a standard form of drafting which it is normal to include in circumstances of this kind.
Could it be a reference to the disposal of shares or does it envisage something wider than that?
It refers to the disposal of shares.
Does it refer to royalties?
No.
Am I not correct in my recollection that one of the terms of the agreement was a small royalty arrangement in relation to the company, such as 1 per cent?
That is not correct. I am reminded that there might be the question of bonus shares in this context.
It is a usual section.
I want to know what it means.
It raises the possibility that, as a shareholder, the Minister may receive other moneys. He could receive them in various ways other than by means of dividends.
Bonus shares are not moneys. We are told that there are no royalties in this operation.
I am informed that this is the normal wording and that there is no specific mechanism intended.
The Minister is now saying that the words do not mean anything. If that is so, can we agree to delete the words?
This is entering into an extraordinary area. I am informed that this is a normal traditional form of words. I do not know what the traditional reasons are, but I do not think on a Bill of this kind where this form of words has been traditionally and normally used we should enter into the business of deleting by agreement. I do not think it is a major issue. It is a tiny issue and I do not see why the Deputy cannot allow the section to go through as it is.
I will give the Minister one reason why it should be questioned, that is, that we are here dealing with an agreement the contents of which we do not know. This is just another example of what Deputy O'Malley said a few moments ago. If the agreement were before us, whether we approved of it or not, almost certainly this debate would be quicker than it is at the moment. This provision says: "all dividends and other moneys received by the Minister for Finance". An obvious question that arises is whether "other moneys", that is, money other than dividends, are envisaged under the agreement? That is not an unreasonable question, but the Minister, if he reverts to the kind of thing he has said on some occasions, it likely to say: "I am not going to disclose what is in the agreement". Of course, as I have said many times, he should have disclosed what is in the agreement, but I do not intend to go back over that. What I am saying is that in the circumstances where this phrase is used "and other moneys", we are at least entitled to ask the Minister whether that is to have whatever its normal meaning is or whether it is to have a meaning which has to be interpreted in the light of the terms of the agreement we have not seen. Is there anything in the agreement which could be covered by this phrase "other moneys"?
I have indicated earlier that it has its normal meaning, that this is a normal, traditional form of drafting and that it has no other content or intent than that.
We may take it then from what the Minister is saying that the agreement referred to in the earlier section does not provide for the paymnt to the Minister of moneys other than dividends. Is that correct?
I look on that as a comment.
It is a little more than a comment. Either that is correct or it is not. If it is correct, then the Minister is entitled to say this phrase "other moneys" simply has the normal, traditional meaning. However, if the agreement provides for the payment of any sums other than dividends, then clearly this phrase "other moneys" can and almost certainly does refer to whatever provision is in the agreement for payments other than dividends. Consequently, we are entitled to ask the Minister to make it quite clear whether this phrase "other moneys" does or can refer to any payments envisaged under the agreement other than dividends.
The section mentions the disposal of shares.
Amongst other things it mentions that.
I have, in fact, answered the Deputy's question. The intention is the normal traditional intention and no other.
And no other? The Minister did not say that before. If the Minister says "and no other" he is, in effect, saying that there is no provision in the agreement for any payment except a dividend on foot of these shares. This is what I asked him the first time, but it took quite some time to get him to say that. However, since there have been a few statements by the Minister which he has subsequently retracted or controverted, I do not want any misunderstanding on this or the Minister to say that it is simply a comment by me. I want to spell it out as clearly as I can so that if there is any misunderstanding about it the Minister will have the opportunity now to correct that misunderstanding.
The position appears to be as follows: The Minister says that the phrase "other moneys" has it normal, traditional meaning and no other. If that is so, it follows that the agreement envisages the payment of dividends only and not payment in any other way. If that position is being correctly represented by me, then the phrase "other moneys" does not present any difficulties. If it is not being correctly represented in what I have said, I suggest that now is the time for the Minister to correct the position, because if there is any other provision in the agreement, then the Minister would be misleading the House if he allowed the impression to go forth that there was no other provision in the agreement when in fact there was and that the words "other moneys" did not refer to anything in the agreement if, in fact, they could so refer.
I am afraid we are gone back to the old habits again, no answer. It is often the loudest answer.
Section 6 refers to shares held "by a nominee under section 4 of this Act". The Minister has said we are dealing only with dividends here and that this phrase "other moneys" is just a pattern followed by the parliamentary draftsman. If there are one or two nominees of the Minister under section 6 and the directors get an annual fee because of the ownership of shares of the company by the Minister, does this mean they must hand over this money for the benefit of the Exchequer? That is the way it reads to me. I shall be delighted if that is the case but I want the Minister to confirm it.
They are dividends and other moneys received in respect of ownership of shares.
Yes, but the Minister's nominees are there because the Minister has shares in the company. The Minister has referred to dividends, but also built into this section is a reference to "dividends and other moneys received", and I was assuming that the other moneys referred to would be moneys that would be received by the nominees of the Minister in respect of the ownership of shares.
The section says these moneys "shall be paid into or disposed of for the benefit of the Exchequer", and the Minister's answer has not clarified that point for me.
I can only repeat that the dividends or other moneys are in respect of ownership of shares.
Under the terms of this section, would the Minister's nominee directors have to pay their fees as directors into the Exchequer?
Not necessarily. I do not think this section has any bearing on that.
Question put and agreed to.
SECTION 7.
Question proposed: "That section 7 stand part of the Bill."
This section refers to the expenses incurred by the Minister in the administration of this Act. I take those expenses to be in addition to the £9,540,000 of taxpayers' money re-referred to in section 2 and which is to be paid tax free and direct to the four fortunate beneficiaries of the Minister's generosity. Can we have some idea of what sort of expenses are envisaged in section 7? Already we have extracted one figure from the Minister, that was, the sum of £58,500 to two firms—Lazard Brothers and Company Limited and Mergers Limited—for advice on the question of the valuation of 24 per cent of this company. We know that that money has been expended.
The Minister received advice also from the Geological Survey Office. I do not know whether that advice had to be paid for. Presumably it had to be paid for. These then are three headings under which expenses have been incurred but can the Minister tell us the various other headings which are intended to be covered by this section and also what are the approximate amounts of money involved?
The sort of expenses that arise from the administration of the Bill, once enacted, are things like employment of consultants, if that is necessary, the matter of travel and there could be circumstances in which there was a matter of staff but all of that would have to be brought forward and dealt with by the normal mechanism by which moneys are voted by the Oireachtas. This section is simply enabling those expenses to be paid from moneys provided by the Oireachtas but the section is not providing the money.
Therefore is the Minister saying that the £58,500 he paid to Lazards and Mergers is not covered by this section?
I understand the moneys voted to my Department are the source of those payments and that this section is an enabling one in relation to circumstances in which the Act is law.
It was easy for the Minister to read that but would he explain in less official language what it means? Is this money that is being paid to Lazards and Mergers, to the Geological Survey Office, to solicitors and counsel who have been retained, apart from the advice that he is getting from the Chief State Solicitor's office and the normal legal channels, to be paid under section 7 or is it being paid under some subhead in the departmental Estimates. I note there is no subhead for this purpose in this year's Estimate although there was provision in this respect under subhead T of last year's Estimate.
Queries being raised by the Deputy do not, in my opinion, apply to this section because they relate to items carried out and paid for last year.
That was the question the Minister was asked the first time. He has now given an answer in terms that are understandable.
Can the Minister say under which subhead such items were paid for last year?
I cannot give the Deputy an answer to that question.
We are used to that. Can the Minister tell us, then, what are the total expenses that are likely to be incurred by him in relation to this legislation, either last year, this year, or next year so that we can add those to the £9.54 million in order to arrive at the exact figure that 24 per cent of these shares is costing?
Perhaps if the Deputy reflects on the formulation of his question in regard to last year, this year and next year he will realise that it is not possible for me to give the sort of information he requires.
We know, for example, that it was possible for the Minister at Question Time to give me the figure in relation to two of his advisers. Would he add the figures for the rest of his advisers, be they financial or legal?
In the light of what has been said I should like guidance as to whether these matters arise under section 7 of the Bill.
They arise all right but the Minister is not too keen, apparently, to answer them.
Is section 7 agreed?
Wait a minute, a Leas-Cheann Comhairle.
It would not be pleasant to have to suggest that it is as difficult to get an answer from the Chair as it is to elicit information from the Minister. Did not the Minister ask whether the questions posed by Deputy O'Malley were proper to this section? I would be interested in hearing the reply. In my opinion the questions are relevant to the section.
Perhaps it would help the Deputies opposite if I indicate that there has been no expenditure whatever under this Bill.
We have a situation whereby under section 7 the Minister is making provision for the payment of expenses incurred in the administration of this legislation and where he is saying that the money will be paid out of the moneys provided by the Oireachtas. We know that there have been sizeable expenses already in relation to this whole matter. Since the Minister has said that all of the expenditure involved up to now has been found without reference to the Bill, is there a need at all for this section? Deputy O'Malley was endeavouring to ascertain the sort of payments the Minister envisages in respect of the administration of the Act.
I indicated the sorts of categories of payments that could be envisaged as being required but the point I made was that no expenditures have been incurred or could have been incurred under this section since the Bill is not yet an Act and that, therefore, discussion of other expenditures in respect of the past and to which Deputies have made reference do not seem to arise under section 7. It was on that matter that I asked the guidance of of the Chair.
I am asking what sort of expenses are envisaged.
The record will show that I have given this information already when I referred to such categories as consultants, travel and staff of certain categories.
What puzzles me is the situation whereby the Minister envisages engaging more consultants having regard to the fact that he did not take the advice of those he had in the past. I am assuming that the Minister intends appointing two directors to Bula. I am assuming that section 7 will enable the Minister to make provision for the payment of these two directors, or are we to assume that Bula themselves will pay the two directors? We are entitled to an answer to that.
In practice if people are directors of companies they are paid from the funds of the company. There is no mechanism suggested here for the payment of directors.
Section 7 is.
The Minister mentioned three headings as possible headings of expenditure under this section. Could the Minister indicate the kind of circumstances in which he envisages the use of consultants for whom payment may have to be made under this section.
That is putting me into a very hypothetical situation. One can only talk about general circumstances in which consultants are retained by Departments and then ask if such a hypothetical situation might arise. Consultants are employed where the expertise does not exist within the Department or within another available Department or State agency and it can be envisaged that such circumstances might arise. But I would be entering into an extremely speculative area to be more precise than that. The Deputy's experience in public life might provide speculative answers to the question, but I do not wish to be speculative.
Perhaps the significance of what the Minister has said does not strike him as it strikes me. When the Minister talks about the use of consultants it is in the context of expenses incurred by the Minister in the administration of this Act. One could envisage the use of consultants by the company in respect of further developments and so on, but that on the face of it would be something that would be paid for by the company and not by the Minister as an expense in the administration of the Act. In what circumstances would the Minister envisage the use of consultants for which the Minister would have to pay as an expense incurred in the administration of this Act?
I have no specific set of circumstances in mind. This is a technical provision in the usual form.
I appreciate that and I also appreciate the fact that the Minister may not have some specific thing in mind. Quite clearly some of the Minister's advisers have something specific in mind when they advise the Minister that the cost of a consultant or consultants could be a possible expense under this section. Would the Minister inquire from his advisers what they had in mind when they advised him to refer to the possible expense of a consultant as an expense under this section?
I am informed that this is an enabling provision in the usual drafting layout and that there is no specific intention at this moment to retain consultants.
The Minister is being evasive. We are aware that the section is in the usual form. We can assume that there is no specific intention at this time to engage consultants. That is not an unreasonable assumption. Equally, it is not an unreasonable assumption that if the cost of a consultant is envisaged as a possible expense under this section somebody had something in mind when they said that. Could the Minister elaborate a little on the other heading mentioned, staff and travel? How could they arise as expense in the administration of this Act?
The Deputy says that it is not an unreasonable assumption that somebody had something in mind. I wonder if we are being entirely serious. I have assured the House that this is a technical provision in the usual form. This detailed speculation about what might be envisaged by members of my staff is a very extraordinary sort of speculation which is not germane to the purpose of this Bill.
Clearly it has not occurred to the Minister that that is a very peculiar form of reply, to refer to consultants, staff and travel. On the face of it that answer is so peculiar that it immediately raises the question as to what the Minister had in mind, or if he had nothing in mind, what his advisers have in mind. As the consultants seem to be a problem we will leave that aside for the moment. Does the Minister think it peculiar of us to ask in what circumstances does he envisage possible expenditure under this section under the heading of staff or travel?
It is peculiar. It is simply taking up time and spinning a thing out. This is an enabling section so that if circumstances arose in which it would be desirable to have people travel, or desirable to have someone employed who was not a normal member of the establishment of the Department paid for in the normal way, then it would be possible to do so. That is the extent of the intention. It is not worth the rigmarole which it is now receiving.
The Minister is missing the whole point. The Minister has a Bill coming up shortly which deals with the setting up of an overall authority in regard to science and technology. I have not looked at that Bill, but there is almost certainly such a section in it. In that case the Minister is setting up a form of State authority for which clearly expenses will be incurred in relation to its administration. This is a Bill for the acquisition of shares in a private company. How can one incur expense in the administration of this Act when the purpose of the Act is to acquire shares in a private company? I do not say there is no reasonable answer to that, but at the moment I cannot imagine what it is. I am asking the Minister to give us a reasonable answer. In answer to this the Minister gave us an example of three headings, consultants, staff and travel. We asked the Minister to indicate how under any one of those headings expenses might be incurred in the administration of this Act, which is quite different from the normal one which the Minister has referred to. It is not an answer for the Minister to refer to the normal provision, because this is a normal provision in a different kind of Act. I hope the Minister has got the point I am trying to make. It seems to me that, once one thinks about it, it is self-evident. Maybe the Minister had not thought about it up to now. I hope it is clear why there is a considerable difference in this case and why the questions are not strange or peculiar in the circumstances of this Bill and what it is seeking to do.
The section refers to the expenses incurred by the Minister in the administration of this Act. I have always understood, and I believe I have always functioned on the basis, that when I am required to administer any Act that I should be entitled, if I deem it necessary in circumstances that I cannot now envisage in regard to this or any other Act, to these sort of powers. That seems not alone normal but necessary if a Minister is to discharge his functions properly.
If one accepts that proposition it is one thing, but when the Minister was asked what kind of expenses would be involved he did not give the answer he has just given. The answer he gave was consultant staff and travel. Is he now wanting to withdraw that answer or did it mean anything when he said it? If it did not, why did he say it? If it did will he tell us what he meant?
I gave those things as examples of the sort of expenditure. They are not exhaustive.
Taking any one of them would the Minister explain how it could arise as an expense of the Minister in relation to this Act? I will explain what I mean. On the face of it when this Bill is enacted the Minister will acquire the shares referred to. He will appoint, let us say, two directors. The two directors will, as the Minister indicated earlier, if they are paid directors' fees, be paid by the company. The cost will not be an expense under this section. If they incur travel expenses as directors these presumably will be paid by the company also and will therefore not be an expense under this section. The question therefore arises: in what way will the Minister be incurring expense in the administration of this Act? I am inclined to accept the proposition put forward by the Minister with a general insurance clause which the Minister should have. He cannot spell out too precisely all the expense that might arise and there should be exceptions which would absolve him if this should arise. This is not an unreasonable proposition. Surely the Minister can appreciate that that is not the case he made. He mentioned three specific headings.
As examples not exhaustive.
Take these as examples and see how it could arise. How could travel expenses arise in the circumstances we have envisaged? How could staff arise in the circumstances we have envisaged? Would these not be expenses of the company and not the Minister, or am I completely misunderstanding the position arising under this Bill?
Through the Chair, there is no commitment to incur expense.
I appreciate that.
And there is no certainty that it would ever be necessary to incur expense. There is simply a usual form, which is enabling should the circumstance arise.
I should like to raise a point before we pass the section. The Minister has told us the names of his financial and geological advisers in this matter. Another very important set of advisers in the circumstances would be his legal advisers. Would the Minister now tell us the names of the counsel and solicitors outside the public service who may have advised him in relation to this matter, the amount paid to them and whether the advice they gave extended to the constitutionality of the 1940 Act and, if so, what the advice in relation to that matter was?
We are on section 7, which says:
The expenses incurred by the Minister in the administration of this Act....
This means when enacted. It is not now an Act. I suggest that all of the questions asked by the Deputy are out of order on section 7.
The Minister has told us what his financial and geological advisers told him and how much he paid them, that is £58,500. He did not include the Geological Survey and we do not know what they got. I presume they were paid. I am repeating the same query under what seems to be the most appropriate section, because this section would retrospectively enable the payments to be made. I am inquiring what the position is about the legal consultants. I understand the Minister did not confine his legal advice simply to the full-time officials of the public service. Since we have been given information in regard to financial and geological consultants we should have this in relation to the legal equivalents as well.
The Chair would point out at this stage that the expenses are in relation to this Bill when it becomes an Act.
We have discussed at great length the question of the Minister paying £9.54 million plus X hundred thousand pounds for expenses under section 7. The £9.54 million cannot be paid officially, or lawfully at any rate, until the Act is passed. With the greatest respect to the Chair, the Chair's reasoning in relation to the question of expenses under section 7 would have also included any discussion of the £9.54 million. We spent a long time on that.
The Chair is dealing only with expenses on the administration of this Bill in section 7.
The Chair at the Minister's invitation has ruled as he wished, but it is a pity that these questions are not answered because every question of this nature left unanswered in this debate simply raises more and more queries and deepens the already pretty deep public suspicion about the whole affair and creates a larger question mark over it all. Never has a Minister declined to answer so many question as this Minister on this Bill.
The Chair is dealing with section 7 which deals with expenses in the administration of the Act.
May I ask the Minister if we can have a categorical assurance that no money will be paid on foot of this section in respect of any expense incurred prior to the enactment of this Bill?
I understand that it is simply not possible that there can be any payments under this until it is an Act, which it is not now.
I am sorry. That is not quite the question I put to the Minister. The question I put was: can we have a categorical assurance that no payment will be made under this section in respect of any expense incurred prior to the enactment of the Bill? That is a slightly different question.
To reiterate, payments are made out of voted moneys against subheads. This is an enabling provision in the Bill. It is not enacted.
Perhaps the Minister feels the question I am putting to him is more complicated than it really is. Let me give him a very simple example. Deputy O'Malley referred to one expense we know of, the fee paid to Lazards. May we take it no payment will be made under section 7 in respect of that expense?
Yes, the Deputy may so take it.
May we take it no payment whatever will be made under section 7 in respect of any expense whatever the liability for which was incurred before the enactment of the Bill? In other words, all expenses incurred prior to the enactment of the Bill will be paid for in a way other than under section 7.
The Deputy cannot necessarily draw that conclusion.
I cannot?
No. The possibility of a continuous fee occurring partly before and partly after the enactment of the Bill is a real one.
A continuous fee?
A fee, part of which occurs prior to the enactment and part of which occurs afterwards for a continuing service.
Surely if that is so the Minister, quite inadvertently I am sure, was misleading the Leas-Cheann Comhairle in the submission he made in regard to this section. The whole point of his submission was that no expense could be incurred and paid for under this section until after the enactment of the Bill. Therefore, he contended Deputy O'Malley was out of order in referring to any expense incurred prior to the enactment of the Bill. That was my understanding of what was said. On that basis I was merely trying to clarify the position.
The Minister appears now to be saying expenses could be incurred prior to the enactment of the Bill which would be paid under this section. If that is so, I suggest all expenses which have been incurred in connection with this matter prior to the enactment of the Bill are open to discussion on this section because they may become payable under this section.
This is a general enabling section. The funds have to be voted. In the interests of trying to be precise. I was indicating that there could be circumstances in which a service would commence at a certain stage, and continue through the moment in which the Bill became law, and the question of payment for those sort of services under the enabling umbrella of this section, using voted moneys, could not be ruled out. I cannot understand the Deputy's difficulty. He knows such overlap services will arise.
If we take expenses incurred quite clearly prior to the enactment of the Bill which have already been paid for—assuming some have already been paid; I do not know —they will have been paid for on foot of the authority in some subhead of the Estimate for the Minister's Department. I see no reason why expenses incurred of the kind the Minister is talking about would continue from before the enactment of the Bill until afterwards which could not also be disposed of in the same way.
In other words, this section does not appear to me to be necessary to discharge such expenses. Indeed, on the face of it I agree with the contention the Minister was making that it relates only to expenses incurred in the administration of this Act and therefore, on the face of it, can only relate to expenses incurred after the Bill is enacted. I was trying to clarify that and get it on the record, and the Minister took me aback by what he said which indicated that he envisaged the possibility of making a payment under this section in respect of expenses incurred prior to the enactment of the Bill. If it is possible to make a payment of that kind under this section, it seems to me all expenses incurred in connection with this matter might well come for payment under this section and should be open to discussion.
I did not think they were and I was merely trying to clarify them. I intended to follow up with another small point. The Minister has opened up the whole position now in a way I did not envisage and which I do not think the Leas-Cheann Comhairle envisaged when the Minister made his submission to him. Would it be possible for the Minister to clarify the position? I have no desire to open this matter up but, on the other hand, I have no desire to let the section go without a discussion on the expenses involved if, in fact, this section will be deemed to authorise payments in respect of expenses incurred prior to the enactment of the Bill.
The Deputy says "deemed to authorise payments". This is an enabling section, I repeat, of a standard form. It provides that they may be paid out of moneys provided by the Oireachtas. It is the voting of the moneys by the Oireachtas that is the authorisation. Surely the authorisation for all moneys paid in such circumstances is the vote of the Oireachtas.
Is the Minister suggesting the Oireachtas cannot vote money without this section?
As I said, this is a normal enabling form.
The Minister has incurred some expenses and I presume he has paid some expenses already. Is that correct? Have some expenses which have been incurred prior to this already been paid?
We are going into a definition. A Cheann Comhairle, by means of——
Yes or no? Will the Minister answer the question and not go running to the Ceann Comhairle for help?
It was intended to be a simple question but it does not appear to be as simple as that.
Yes or no? Either they were paid or they were not. Which is it?
We are having a discussion on an area which I submitted under section 7 was not admissible for discussion. We are gradually being carefully worked onto that area.
Sorry?
The effort is being made to work us onto an area which does not arise under section 7.
I am trying to clarify this position and I am finding it extremely difficult. In fact, the simpler I make my questions the more difficulty the Minister appears to find in answering them. I will try to break it down so that we can eliminate the areas where we are agreed and see if, in fact, there in any conflict between us. Could I ask the Minister again: have any of the expenses which have been incurred in connection with this transaction been paid? Any of them?
The Deputy knows the answer to the question.
Unfortunately I do not know the answer and that is why I ask it. Have they or have they not been paid, any of them?
The Deputy may not be aware of the reply to a parliamentary question but reference was made to it by his colleague, Deputy O'Malley, in this debate.
If the Minister is referring to the fee due to Lazards I am aware that he gave a reply in which it was stated what the amount was, but I am not aware that he said it was actually paid.
If the Deputy is not clear about that I can tell him it has been paid.
Right.
A Cheann Comhairle, we are now opening up the discussion——
(Interruptions.)
On a point of order——
That is all right. Leave him alone.
I do not see any reason to intervene.
Good man. Now we are seeing a bit of independence.
Order.
It is wrong for Deputy O'Malley to be rude to the Chair.
I was not being rude. I was complimenting the Chair.
There is no reason at all to bring the Chair into this debate.
The position was made distinctly unclear by something the Minister said some time ago. We have now established that some expenses which were incurred in connection with this transaction have already been paid. Clearly they have not been paid on foot of this section but on foot of a subhead in the Minister's Estimate which was approved by this House. There is no reason why other expenses incurred in the future, or incurred already and not yet paid, cannot be dealt with similarly. Therefore the question arises as to how can any liability for expenses already incurred or incurred prior to the enactment of this Bill fall to be paid or authorised for payment under this section? Why is this section not relating solely to expenses incurred after the enactment of the Bill and expenses which relate to the cost of administration?
This is my understanding but I stated that there would be certain services that would have started prior to the enactment and would continue after it and that there would be a question of apportionment of payments.
It is the first time the Minister mentioned the word "apportionment".
It is not the first time I mentioned the idea.
No, I fear the Minister does not pay as much attention to what he says himself as we do. What he said was that there could be a situation in which fees incurred were on a continuing basis dating from before the enactment of the Bill to after the enactment of it. If he did not say, he certainly implied that such fees, covering the whole period, would fall to be paid under section 7. Did he not mean that because that is the impression I got from what he said and that is the reason for the whole difficulty? If the Minister did not mean that, would he say so? Did he mean to convey that such fees would be apportioned, that there would be a separate payment for those incurred prior to the enactment of the Bill and another one under section 7 subsequent to the enactment of the Bill? If that is what he meant, it is not what he said.
I would refer the Deputy to the record in due course. I was trying to be specific in saying that there were services which had been initiated prior to the enactment of the Bill but which would continue after the enactment of it and the payment of those in the latter context would be, as I understand section 7, subject to, or not subject to—because this is simply an enabling Bill—the vote of the Oireachtas but would arise after the Bill has become law and therefore in the context of section 7.
Does the Minister mean that there would be, in respect of that continuing fee, in effect two separate payments, one in respect of that incurred prior to the enactment of the Bill and a second in respect of the one incurred afterwards, the second one being a payment made on foot of section 7? Is that what the Minister means?
Fees are paid from subheads. I think I was not referring to a payment; I was referring to a service. In fact, I was trying to clarify matters for the Deputy when I made it clear that there would be some services that would be continuing beyond the moment when the Bill became law. It was my whole intention to be clear about that fact.
I appreciate that the Minister was trying to make that point clear. What he did not make clear, and I fear has not yet made clear, is whether in such a case the services incurred prior to the enactment of the Bill will be dealt with separately from those incurred after the enactment of the Bill.
The fees are paid from subheads voted by the Dáil.
I appreciate that. Those already incurred by the Minister before the enactment of the Bill—some of them have been paid, as we have established and some have yet to be paid—will be paid under subheads. You do not need section 7 for that purpose. The difficulty has arisen because the Minister drew into the argument, quite unnecessarily in my view, expenses incurred prior to the enactment of the Bill under section 7. It was the Minister who brought in that. He has still not made it quite clear that in fact there is a separation between the two, even if it is the one firm rendering the one service and that in fact there has to be an apportionment. He hinted at that but he did not say it.
I am not making a mountain of a molehill in case the Minister is tempted to think that I am because if the Minister proposes to make any payment under section 7 in respect of an expense incurred prior to the enactment of the Bill there is a new situation in regard to our discussion of section 7. All of this has arisen because of what the Minister said. Would he now indicate specifically in the case of a service of the kind he has envisaged, which commences prior to the enactment of the Bill and continues after the date of its enactment, when payment falls to be made for that service, is it envisaged that that payment would be apportioned, that one portion would relate to services up to the date of enactment and another portion to be paid on foot of a subhead authorised under section 7 would relate to the services after the enactment date? Is that what is envisaged?
The fees, as I said, are in fact paid under the subhead. I believe that the mechanism that I described and that the Deputy has now described again is the mechanism that would have to be used.
An apportionment—a separate approach to the one fee?
Yes, I believe that to be the case.
If that is so, then no expense incurred prior to the enactment of the Bill comes under section 7. That is what, apparently, the Minister was trying to establish: in fact what he conveyed was something quite different. He has now switched it around and he is talking about apportionment and I think he is getting me to make the case for him rather than making it himself, the case he should have made the first time.
I would refer the Deputy to the record.
The record will be very clear unless, as Deputy O'Malley said in another context, it is interfered with, as to what the Minister did say. I think we have now established some degree of clarity, not a great deal. I now ask the Minister what kind of service would involve payment for service rendered prior to and continuing on past the enactment of the Bill?
This is really hypothetical stuff. We have spent more than ten minutes discussing something that I thought, in an effort to clarify, I had introduced at the beginning. I believe the record will show that I introduced it in a clear way. I am not prepared to pursue this particular end.
Are we to take it that the Minister is saying that when he referred to a service continuing on——
A hypothetical one.
That is the question I am putting to the Minister. Would he at least allow me to put the question to him? Was he bringing in something hypothetical? Is that what he is now saying, that it was hypothetical? He did not say that at the time.
Hypothetical, that there was a possibility of it existing, yes.
Is the Minister now saying that such a service does not exist and that it was purely a hypothetical exercise on his part?
I am not saying one or the other.
I am not surprised that the Minister is not saying one or the other because he is saying one and the other on almost every question that comes up. It is totally unsatisfactory that a Minister should come into the House, and not know his job, not be properly briefed, not be able to explain things, putting forward a case and then withdrawing it, and changing his feet. This is a totally unsatisfactory performance. He is wasting the time of the House and of the Opposition.
In view of the fact that the Minister cannot envisage in what way expenses can arise under section 7, and that he has already found in existing legislation ways and means of spending quite a sizeable amount of money on research, the business of staff, travelling expenses and the various other things he mentioned tonight, surely he could accept this Bill without providing for the possibility of incurring further expense administering it? In view of the abstractness, as the Minister put it, of being able to visualise further expenses in this regard, could he withdraw section 7, because it does not seem to be necessary?
I am putting the question: "That section 7 stand part of the Bill."
We cannot agree. The Minister has failed to answer various questions and has changed his answers several times. This is not the normal provision where a State company or its equivalent—the example given by Deputy Colley was the National Board for Science and Technology—is concerned. This is a private company in which the Minister is buying with the taxpayers' money a minority interest. These expenses are matters for the company. Any expenses incurred from now on should be paid by the company and not out of moneys provided by the Oireachtas. We have had no reassurance on this matter from the Minister and in those circumstances we cannot agree to the section because it is not usual in that context.
Question put.
The Committee divided: Tá, 65; Níl, 58.
Tá
- Barry, Peter.
- Barry, Richard.
- Begley, Michael.
- Belton, Luke.
- Belton, Paddy.
- Bermingham, Joseph.
- Bruton, John.
- Burke, Joan T.
- Burke, Liam.
- Byrne, Hugh.
- Clinton, Mark A.
- Collins, Edward.
- Conlan, John F.
- Coogan, Fintan.
- Cooney, Patrick M.
- Corish, Brendan.
- Cosgrave, Liam.
- Costello, Declan.
- Coughlan, Stephen.
- Creed, Donal.
- Cruise-O'Brien, Conor.
- Desmond, Barry.
- Desmond, Eileen.
- Dockrell, Henry P.
- Dockrell, Maurice.
- Donegan, Patrick S.
- Dunne, Thomas.
- O'Leary, Michael.
- Pattison, Seamus.
- Reynolds, Patrick J.
- Ryan, John J.
- Ryan, Richie.
- Staunton, Myles.
- 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.
- Jones, Denis F.
- Kavanagh, Liam.
- Keating, Justin.
- Kelly, John.
- Kenny, Enda.
- Kyne, Thomas A.
- L'Estrange, Gerald.
- McDonald, Charles B.
- McLaughlin, Joseph.
- McMahon, Larry.
- Malone, Patrick.
- Murphy, Michael P.
- O'Brien, Fergus.
- O'Connell, John.
- O'Donnell, Tom.
- Taylor, Frank.
- Timmins, Godfrey.
- Toal, Brendan.
- Tully, James.
- White, James.
Níl
- Andrews, David.
- Barrett, Sylvester.
- Brady, Philip A.
- Brennan, Joseph.
- Breslin, Cormac.
- Briscoe, Ben.
- Brosnan, Seán.
- Browne, Seán.
- Brugha, Ruairí
- Burke, Raphael P.
- Callanan, John.
- Calleary, Seán.
- Carter, Frank.
- Colley, George.
- Connolly, Gerard.
- Crinion, Brendan.
- Cronin, Jerry.
- 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.
- Haughey, Charles.
- Healy, Augustine A.
- Herbert, Michael.
- Hussey, Thomas.
- Kenneally, William.
- Kitt, Michael P.
- Lalor, Patrick J.
- Leonard, James.
- Lynch, Celia.
- Lynch, Jack.
- McEllistrim, Thomas.
- MacSharry, Ray.
- Molloy, Robert.
- Moore, Seán.
- Murphy, Ciarán.
- Nolan, Thomas.
- Noonan, Michael.
- O'Connor, Timothy.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond.
- Power, Patrick.
- Smith, Patrick.
- Timmons, Eugene.
- Tunney, Jim.
- Walsh, Seán.
- Wilson, John P.
- Wyse, Pearse.
Tellers:—Tá, Deputies Kelly and B. Desmond; Níl, Deputies Lalor and Browne.
Question declared carried.
Section 8 agreed to.
We now revert to section 2, as amended.
SECTION 2.
Question again proposed: "That section 2, as amended, stand part of the Bill."
I want to deal with two matters that came up the last day because during the earlier debate on this section Deputy O'Malley remarked that at the time he obtained copies of the documents of the company's file in the Company's Registration Office the latest annual returns of Bula Limited did not appear to be available. I promised to look into that.
I am informed that the 1974 and 1975 returns were submitted some weeks ago and they are now on the file, but it is possible that one or both of them were being subjected to the registration process at the time of the Deputy's inquiry. As I said, they have since been filed and I understand that the 1976 return is on file also. I think the item from these returns which Deputy O'Malley particularly wished to be informed about was the figure of the indebtedness of the company, which appears at part 4 of the annual return. The figure entered in the 1976 return for this indebtedness was £3,091,409.
The other matter, which to a great extent has been dealt with but which I will just return to, is the matter of Haras el Chorro, SA. That matter again was raised by Deputy O'Malley. The reason he did so was that contracts entered into by Bula Limited with Haras el Chorro, SA were listed in a charge registered in the Companies Office as part of the security for the credit facilities by banking institutions. This matter, I think, has been incorrectly taken up by the press as being a situation where Haras el Chorro, SA hold a mortgage on Bula lands or minerals. This is not so. Haras el Chorro, SA are and have been since 1970 the registered owners of lands known as the Kruger lands. These lands were essential and support lands for the Bula mining projects and contracts for the acquisition of these lands were entered into by Bula Limited. It is the surplus use of the land which is important to Bula for the purpose of constructing tailing dams and other facilities ancillary to the mine development. Those are the specific matters Deputy O'Malley raised—the matter of the returns and also the matter of Haras El Chorro, SA. The latter was misunderstood and I believe it is now recognised that it was a misunderstanding. That has been substantially cleared up but I wanted to add the official record to the explanations already given.
Before I comment on those two—and I will have quite a lot to say on what the Minister has said, or not said, as the case may be— I should like to mention a third matter. The Minister made a statement on the last occasion that the four guarantors, whom he named as Messrs. Roche, senior and junior, Mr. Wymes and Mr. Wood, were not guaranteeing in their capacity as directors although they are directors but that they were guaranteeing in their capacity as shareholders although they are not in fact shareholders, as I demonstrated since. Would the Minister deal with that situation, because the question as I originally posed it remains perfectly valid, that as directors they are entitled, under article 11, to an indemnity. That means that the Minister is suing himself so far as 49 per cent of his action might be concerned.
I can amplify a little what is in the record. I said that the guarantee was given by the four individuals as the beneficial owners of the shares; the individuals control Bula Holdings. The guarantee was drafted to take account of the way in which the shares in Bula Limited are held.
The only connection of these four individuals with Bula Limited is that they are four directors. They are not shareholders in Bula Limited. The shareholding of Bula Limited, as I demonstrated from the Companies Office file on the last occasion, is 80 per cent Frolic Investments, now with its name changed to Bula Holdings, and 20 per cent Patrick Wright, since deceased. None of the four men concerned is the owner of a single share in Bula Limited. Who owns what shares in Bula Holdings I do not know and nobody knows because it is a private unlimited company. These companies are common enough nowadays for taxation purposes. They have no great advantages or value other than for taxation purposes.
One of the provisions of the Companies Act, 1963, is that it is not necessary to disclose the names of the shareholders. Therefore, while we might well guess, and make a very informed guess, perhaps, that these four men are the principal shareholders at least of Bula Holdings, we do not know because there is no information in the file in the Companies Office to that effect. My original proposition stands, that these four guarantors are guaranteeing in their capacity as directors and it can be the only capacity in which they are guaranteeing because they are not shareholders and they cannot therefore guarantee as shareholders. If they guarantee as directors, as indubitably they do, then they have an indemnity under article 11. I regard as seriously wrong that they should have an indemnity under article 11. I regard as seriously wrong that they should have an indemnity under article 11 because the value of their guarantee is diluted straight away by 49 per cent.
In practice that guarantee may be diluted to a greater extent. The Minister might well be advised that it would be futile or unwise for him to seek to enforce a guarantee when he will have to indemnify as to 49 per cent of what he succeeds in enforcing. In practice the dilution of the value of those guarantees given in the secret agreement of 12th December, 1975, may be virtually nothing. The dilution is so great that the value is virtually nothing. I do not wish to say that the Minister misled the House the last day, because I have no doubt he did not consciously try to do that, but the effect of what he said in practice was to mislead the House. Now that we have established the precise facts they bear out precisely what I said on Tuesday, 22nd February, as reported in Volume 297 (1) of the Official Report.
The Minister said now that the 1974 and 1975 annual returns were sent in "some weeks ago and are now on file". On 22nd February the Minister said these returns were made and filed in the Companies Office on 24th January, 1977. I had a search carried out on that file by long established, most competent and experienced law searchers in Dublin. They carried out a search for me on Tuesday, 15th February, 1977, and sent me an invoice with the search dated that date. On that date the file was available to them but the annual returns for 1974, 1975 and 1976 were not on the file. I communicated with the firm concerned by telephone last Tuesday and told them I understood that in the last few days, as a result of what the Minister said here, a number of annual returns which had not previously been on the file were now on it. I asked them to get me copies of those. They said they would. When I had not heard from them I telephoned them at lunchtime today and they told me that the file was not available in the Companies Office. They said they had been there a couple of times but the file was not available. I asked them the reason it was not available and they said they understood that a number of forms had recently been sent in and the file had been withdrawn, presumably, to have the forms put on it. I asked them when they thought the file might be available. They hoped it would be available by Friday and if so they would then copy the additional documents for me.
The position is that, notwithstanding the statement of the Minister on the last day that these annual returns were placed on the file on 24th January, 1977, they clearly were not on it when that file was copied for me on Tuesday, 15th February. The file was not available since Thursday last or today. To say the least of it this is an unsatisfactory position. It is not a position that pertains to the average company. There is secrecy, mystery and doubt about the fulfilment by this company of its legal obligations under the Companies Act, 1963. If the Minister's statement of the last day that these documents were filed on 24th January, 1977, was correct—that statement was not correct—that would disclose on the face of it a breach of the Companies Act, 1963. It was a serious matter for the Minister to make that statement. The position now is that a servant of his, the Registrar of Companies, having had drawn to his attention in Dáil Éireann by the statement of his own Minister the failure of a particular company to file its annual returns in time, presumably will now have to take the appropriate steps open to him under section 125 (4) of the Companies Act, 1963.
On the question of the annual returns, I raised on the last occasion, but the Minister conveniently overlooked it, the position that the 1972 and 1973 annual returns had not been filed until 12th November, 1974. On the face of it that disclosed what seems to me to be a further offence under section 125 of the Companies Act by the company in which the Minister is seeking to buy a small minority share with more than £9½ million of the taxpayers' money.
On that occasion I also drew attention to and asked the Minister to deal with, which he failed to do, the situation that on 16th July, 1974, a resolution was passed at an extraordinary general meeting of the company increasing the authorised capital from £100 to £1 million. That resolution was not filed until more than 18 months after the date of its passing, although there is an obligation in section 143 of the Companies Act to file it within 15 days. Subsection (5) of that Act states that a criminal offence is committed by failure to file within 15 days. It states:
If the company fails to comply with subsection (1) the company and every officer of the company who is in default shall be liable to a fine not exceeding £50.
This matter has not been dealt with by the Minister, though he has given us to believe over a long period that the company in which he will get a 24 per cent interest with more than £9½ million of the taxpayers' money are a company admirable in every way. In view of the statements he has made today about the filing of these documents, which presumably was done after information from some source or other, I ask the Minister how he reconciles this with the non-availability of the documents and the non-availability of the file in the last two or three weeks.
I have often made searches of Companies Offices in regard to ordinary companies, and have never found this sort of cloak and dagger mystery. You go in, you get the file, you put it back and that is it. But it is almost as hard to get the file on Bula Limited as to get the secret agreement of 12th November, 1975. When it was got less than a fortnight ago by a reputable firm of law researchers in this city the documents to which the Minister referred and which he said on the last occasion were filed on 24th January, and which he said today were filed some weeks ago and are now on file, were not on file. That was the position again this morning.
We are now told that in the 1976 return, which we were not told about at all last week and which must have been got together in a great hurry because of what I disclosed to the House last week, discloses indebtedness on foot of mortgages and charges of £3.91 million. That is a very substantial amount of money. If that company file with that information had been available to the various advisers and to the arbitrators we might have ended up with a very different result. It is a serious matter that if the Minister's statement that these documents have been filed in the last few weeks is correct it would prima facie appear to be a breach of the law.
I am aware from practice that small companies in a small way of business, without the assistance of the considerable high grade professional advice available to this company, often default, that they forget to put in an annual return sometimes and that they have to be reminded by the registrar, but it does not happen to companies of which the secretary is a solicitor, in which the capital is £1 million and in which the liabilities, as declared in the annual return exceed £3 million and where, presumably, the assets are fairly considerable. It does not happen normally with such companies, and one is entitled to ask why it has happened in this company and why it is so difficult for a citizen to exercise his right in the Companies Office, given to him under the Companies Act, to inspect the file.
The other matter I raised and that the Minister knew nothing about last week—he did not appear to have heard of the company at all—was the involvement of Haras el Chorro, SA, which in French would mean Societié Anonymie, but I think this is Spanish. I could not follow what the Minister told us about that company—as far as I can remember he did not tell us anything. I think he told us they had sold the surface land to Bula Limited, but apparently not the minerals. I am no linguist but I assume the name of that company to be Spanish. The reason for that assumption is that I understand the company are registered in Panama, which is an unusual place for a company to be registered who own land, or owned land, whichever the position is, in Ireland. Financially speaking, Panama is one of those mysterious little countries used for the most part not by the citizens of Panama but by the rich citizens of many other nations for the purpose of carrying on what are known as offshore operations. The whole point of using a Panamanian registered company is bound up with what we should delicately call taxation affairs.
I have not come across a Panamanian country owning land or minerals in Ireland but possibly there is some other Panamanian country which does. The interests of Haras el Chorro, SA, are widespread; they are not confined to land in Meath in Ireland. My attention was drawn to the edition of Tattersall's catalogue of 29th September, 1976. A yearling was offered as lot 460, a chesnut filly by Ridan out of Narrow Escape described in the catalogue as being the property of our old friends Haras el Chorro, SA. It is a company with widespread interests throughout the world. I want the Minister to tell me its exact connection with Bula.
According to the returns in the Companies Office there is an agreement of 17th February, 1975 between Bula and Haras el Chorro, SA. I want to know—and I feel I am entitled to know—the nature and effect of that agreement. I understood the Minister to say that the surface land appeared to have been sold to Bula and that there was some other arrangement about the minerals but in order to try to clarify that I looked up in the Land Registry folio 26646 County Meath, which is the folio mentioned in relation to Haras el Chorro, SA, to find out had they sold the land to Bula and the position relating to the minerals. It appears that Haras el Chorro, SA are registered on that folio still and there is a reference there to the mineral rights. The registration extends to the mines and minerals other than minerals of gold, silver and petroleum within the meaning of Part II of the Petroleum and Other Minerals Development Act. The entry in relation to minerals was registered on the folio on 1st April, 1976. It would seem, if my reading of this is correct, that the folio is owned by this Panamanian company and that all the minerals other than gold, silver and petroleum are owned by it also.
There is a curious entry in No. 2 relating to the charge of the Northern Bank by a mortgage dated 30th September, 1976. It refers to the lands comprised in the folio but excludes the mines and minerals on or under the said lands. It also refers to the estate, right, title and interest referred to in the agreement dated 17th February, 1975, between Haras el Chorro, SA, and the company therein described as the estate, right and title of the vendors to any minerals. It seems to me that Haras el Chorro, SA on the basis of this have mortgaged their interest in the minerals to the Northern Bank Finance Corporation. I cannot understand otherwise how the reference to the right, title and interest of the vendors in and to any minerals under the lands can be explained.
These are matters about which the Minister has had a full week to find the answers. One would have expected a great deal more information than the very skimpy information which we were, in fact, given. We are not at all clear as to the position in relation to this company which is registered, so far as I know, in Panama. One assumes that it is not owned by Irish citizens; perhaps Irish citizens have some interest in it. Perhaps it is an offshore asset stripping operation. I do not know. One cannot form any definite conclusions about it on the basis of the very inadequate information given by the Minister but I think one should continue to ask that sufficient information be given so that we can ascertain the exact position in relation to the company. The Minister has an obligation to give further and better information than he has done and to explain fully what the dealings were with this company, why they were carried out and why this company is still referred to in this charge on the land of the Northern Bank Finance Corporation. Also, we are entitled to ask in the circumstances for a copy of the agreement of 17th February, 1975, between Bula and Haras el Chorro, SA.
I want to intervene briefly on one point raised by Deputy O'Malley. He made reference to the guarantee. The Deputy has not got the agreement for reasons which have been made clear and which he does not accept; both sides understand exactly the position of the other without accepting it. The Deputy's suggestion that the guarantee is of very little value is based on the assumption that the contract which he has not seen would have been drafted in a very slipshod way. All I can say to the Deputy and to the House is that it would be a very serious error if an agreement was drafted which contained a guarantee which turned out to be of very little value to the Minister and I think it would be wrong for the House to assume that such a basic error was made.
I do not wish to intervene in matters which the Minister has dealt with but I want to raise a general matter which has reference to a point Deputy O'Malley made, that is, the position when the State is buying into a private company, as will be done if and when this Bill becomes law. When the State buys into a private company, that company will have entered into all manner of transactions and I think it would be extremely wrong that the company in which the State is taking a stake should be required to publicise its commercial transactions. I think it would mean that it would be extremely difficult for the State to carry out an operation such as has been carried out under the present legislation. Members may differ as to whether or not this is desirable. Members may differ as to whether or not it is a good idea for the State to buy into private companies in the mineral area or otherwise, but assuming it is a good idea and assuming it is a good idea for the State to take a shareholding, particularly in mineral development, immense difficulties would be raised in future in the operation of such a policy if at any time suggestions were made that such a company was subject to, shall I say, the threat that its private dealings would be made public.
It seems to me, therefore, to be unreasonable that the Opposition should require the Minister to ask the company whose shares he is purchasing to produce its private agreements. What the Minister has done is to indicate to the House the nature of the particular transaction. The nature of that particular transaction is, of course, now known and it is wrong to suggest that the actual agreement itself should be produced. Generally speaking, Members should know—certainly Deputy O'Malley should know—that when a sale is being closed all the transactions in relation to the particular company are examined. Whilst it is true that a private company has a statutory obligation to file its accounts, the purchaser of shares, while concerned about the viability of the company, is not primarily concerned with whether or not the company carries out its statutory obligation. What he is concerned about is whether he is getting a good bargain. These are matters taken into account when the sale is being closed and certainly anything in reference to the accounts of the company are matters which are examined very carefully when the sale is being closed. Deputy O'Malley may, if he wants to, comment on a company which has delayed filing its accounts. I suppose he is entitled to make his comments, but I do not think that affects the decision of the House in relation to this particular section.
There are two matters to which I wish to refer. The first is the filing of the accounts. I note what my colleague, the Attorney General, has just said, but I must say I certainly do not condone the failure of any company to submit its returns on time. That being so, I believe the position is, as the Deputy well knows, that a high proportion of private companies are not as prompt in submitting their accounts as they should be. This failure is due to a number of causes. Deputy Colley made reference to these last week—illness, pressure of work and so on. I am quite sure none of the Members opposite would suggest there is anything exceptional or remotely sinister about delay in having returns submitted. I do not condone delays and the Registrar of Companies quite rightly takes a serious view of such delays.
Deputy O'Malley dealt with some dates and some words of mine. May I now be quite clear about this? What I said was that the returns were lodged on January 24th. I understand that normally returns are processed and filed within ten days but, due to shortage of staff and for a number of apparently valid reasons, there is now a longer delay between the lodge ment and the filing. If Deputies consult the Official Report they will see that the word I used was "lodged".
What is the reference?
The reference is column 88 of Volume 297 of 22nd February: "I should like to say something about the return to Bula Limited". That "to" should be "of". "I understand the returns for 1974 and 1975 were lodged on 24th January of this year". That is information I believe to be correct and I repeat it now. I have pointed out that as between lodgment and filing there is an interval.
Before the Minister leaves that, he will appreciate we are now at 1st March and the filing has not apparently taken place yet.
I regret that. I am not in a position to comment on whether what the Deputy says is right or whether it is not, but the situation is as I have said: normally between the lodging and the filing there is ten days for stamping. I said that due to reasons of illness and other difficulties in the Office of the Registrar——
Is the Minister aware these documents are stamped in advance before they are lodged, or filed, as the correct word is?
I am making a distinction between lodging and filing and I say the delay is now longer than the ten days. That is the reason for the difficulty in obtaining these documents. I understand they are now filed.
I want to deal now with Haras el Chorro, SA, if the Deputy wants more of it. He knows that since 1970 Haras el Chorro are the registered owners of the lands known as the Kruger lands and that there has been a stud farm and other sorts of farming carried on there. The point is these lands were essential as support lands. First, we have to have an idea of where tailings can be and secondly, there was the question of the diversion of the river. Both were relevant and it was essential that these support lands for the Bula mining project should be acquired. These lands were there beside the Wright farm and they were necessary for the development of the mine. These lands were secured by Bula under a contract arrangement. That is the essence of it.
I hope that is clarification because this was a contract for the acquisition of the lands which were essential for the mine. It does not relate to the working of the mine in its underground sense; it simply relates to a servicing area for it. I know that Bula could not have had a choice with regard to the adjoining people. They could not have had a choice with regard to the registered owners of the land, the so-called Kruger lands. That was as it happened. They were correct and they were prudent in seeing that the land was secure. That is the story and there is no mystery or drama there. Had the registered owner of what are known as the Kruger lands been an Irish farmer—this might just as well have occurred; it was a matter of chance that it was Haras el Chorro, SA and not a local farmer with a more normal name that would give rise to less surprise—there would not have been any comment at all.
Is it the position that Bula have purchased the surface land of what are called the Kruger lands?
A contract for the acquisition of the surface land was entered into by Bula.
Not for the minerals?
My understanding about the minerals is that it is not a geological interesting area. The people disposing of the land argued as follows: if by any chance there turned out to be a mineral interest—this is not anticipated—there was some other arrangement which could be made with regard to reimbursement about minerals. The particular interest is not a mineral interest; it is an interest in relation to the surface availability of the surface land.
Are these not State minerals?
It is Mr. Kruger's interest that is involved. I am not clear as to the status of the minerals. I know that the need, the interest and the reason for the exclusion here is that the requirement is a requirement of service land and, therefore, of the surface of it. This would be seen as a perfectly normal transaction if it were a local farmer who was involved; the comments of the newspapers originated because of the name of the company. That was something that existed long before decisions were taken by this Government or by the Opposition when they were in office with regard to the matter.
The folio concerned would appear to indicate from what I understand that this company became registered not in 1970 but on 1st June, 1972, that is approximately 18 months after the discovery of the existence of the orebody beside it or beneath it. The Minister has said that a contract exists for the purchase of the surface of these lands but not of the minerals under them. From the folio concerned it does not appear that the purchase has been completed because so far as one can see this Panamanian company is already the owner of the land. Under the Registration of Title Act, 1964, any form of trust of this nature is not enforceable as against the registered owner. The Registrar of Titles is entitled to deal with the registered owner who appears to be this Panamanian company.
If I were purchasing into this company it seems to me I would have to insist that they would become registered as owners and they are in a very weak position at the moment without that. I am not clear about the area of land involved. I understand it is sizeable and I presume the price is sizeable also. It is a pity that the whole thing is so vague and so highly unusual.
The Minister is not right in saying that if this were an ordinary Irish farmer with an ordinary Irish name it would not appear unusual. What attracted my attention to the very extraordinary nature of the transaction —and the more I hear of it the more extraordinary it seems to become— is the provision that the lands in this folio are charged to the Northern Bank Finance Corporation but the mines and minerals on and under the lands are excluded and exempted.
It is extraordinary for a mining company, or what hopes to be a mining company, buying land immediately beside what it hoped will be its mine not to buy the minerals if they are there. The Minister is not aware whether they are State minerals. Has he made any attempt to make an acquistion order in relation to these minerals? Without going into the history of the mineral title, on the face of it I would say that the likely ownership of these minerals is different from the ownership of what was originally the Wright minerals. It appears from these documents that Mr. Wright's land was not registered land. It was not registered in the Land Registry and, therefore, it did not go through the Land Commission. Therefore, the opportunity of the Land Act, 1903, and subsequent Acts vesting the minerals in the State did not arise.
In the Haras el Chorro land, the property is registered in the Land Registry. One assumes that some time before 1972 when this Panamanian company came to Ireland the property had been vested in the Land Commission and was revested by them in whoever was the tenant under the Land Acts. If that were done the normal provision would be to retain the minerals for the State. There has been a great deal of discussion here about the fact that Mr. Wright's minerals were privately owned. The Minister failed to make a second acquisition order to acquire them and he did not make an acquisition order for anyone else's minerals in that area. Apparently he did not make one for Haras el Chorro's minerals. For some extraordinary reason they have been allowed to retain their minerals even though they are next door to a mine in which the Irish taxpayer is buying a 24 per cent interest and receiving a further 25 per cent. That seems to be another extraordinary fact of this saga. We have in Panamanian ownership the minerals of an extensive farm that are under the lands owned under contract by the company in which the Irish taxpayer is to get 49 per cent at a high cost. Why did the Minister not make a mineral acquisition order in relation to these minerals? If they are in Panamanian ownership, why should they be left in it? One assumes from what the Minister has said that they must be privately owned. He explained that there was a division between the sale of the surface land and the minerals. The Panamanian owners want to maintain an interest in the minerals in case they become valuable. They have a much better chance of becoming valuable next door to the Navan orebody than if they were elsewhere.
In these circumstances, would the Minister not make an acquisition order under the 1940 Act in relation to this holding and other holdings on that side of the river? The Bula part of the orebody extends beyond what was originally the Wright farm to other lands which they have bought. Because these are registered land folios one assumes that some of them must be State minerals and that the others might be easier to acquire than the Wright minerals. What is the State's position in relation to those non-Wright minerals, including the Panamanian minerals, if the mining operation continues? The State owns some of those other minerals. Why are we not getting royalties? Why are we not getting paid for them? I should like the Minister to answer those questions?
The existence of workable minerals in relation to Haras el Chorro has not been established. There is an assumption about minerals which one would need to know more about before considering any procedure. If they are State minerals, they are State minerals, and that is the end of it.
Why are these companies making charges, mortgages and agreements? It does not indicate that the State has acquired them?
It indicates the opposite.
I doubt that an astute body like the Northern Bank Finance Corporation would take mortgages and charges on minerals from someone if they did not have title to give. Banks employ lawyers who spend their time investigating titles to property which is offered as security for loans and on which the banks want to register charges. They do not lend money or register charges unless they are satisfied that the mortgagor has the title to do it. If the mortgagor did not have the title, the bank would not acquire any valid security. In this Bill the company are referred to as mortgagors. No mortgage seems to be registered on the folio and there is no change of ownership in respect of the surplus lands.
The Deputy said there was a note on the folio in relation to a charge.
There are subdivisions and subletting charges and there is one about gold, silver and petroleum.
The Deputy said there was a charge on the folio in favour of some bank.
Not on the Haras el Chorro folio. I am talking about a charge in the Companies Office on the company, a legal mortgage and debenture. It recites the agreement of 17th February. I must confess that the information given to us by the Minister in regard to it is not helpful. Would the Minister not agree with me that, if there are minerals which could be acquired by the State in the immediate vicinity of this land, the State should exercise its rights and should not allow a private company to use them? If the State owns them—and the State must own some of them—why do we leave them in Panamanian ownership?
How is it relevant to this section whether or not the Minister exercises rights in regard to other land?
Valuation.
How is it relevant to the purchase of shares in a company whether the Minister has State minerals next door or whether he is right or wrong in acquiring them? I do not see how these provisions are relevant to section 2. The point I am making is that I would express the hope, which would be shared by many Deputies, that the activities which are being undertaken by the Minister in this area will be continued in the future; that in the future the State will take a more active role in the development of our minerals and will give effect to that role by different means, one of which would be the purchase of shares in private companies. If that role is to be played, it is important that the State does not see to it by what it does in this instance or in other instances that private companies will fail to deal with the State.
What we are dealing with here is a situation where a private company has entered into a contract with a neighbour for the purchase of land. That is what this is about. The Minister has explained to the Dáil what is the nature of the contract arising from the information sought by the Deputy last week. That having been given, it is then a matter for the Minister's advisers to see that the shares being bought have not in any way been affected by any transaction undertaken either before or since the contract was entered into. The debate in this House has arisen to a great extent because Deputies are objecting to the fact that they cannot see the agreement. However, that matter having been debated at great length and the Minister having explained the position, the situation now is that we are dealing with a section which is making provision for the purchase of shares in a company which, of course, has entered into many transactions. It would be extremely unreasonable for this Dáil to be asked to ask the company whose shares the Minister is buying to produce details of all these transactions.
The Minister has gone, I think, as far as is reasonably necessary to indicate what the nature of this transaction is. Whether the Minister takes further action in relation to his rights under the 1940 Act in this neighbouring farm or another farm is surely a matter that has nothing to do with this Bill.
The matter is not quite as simple as the Attorney General seems to think or, which may be more accurate, as he would like to present it. We are told that there was a simple contract between Bula Limited and Haras el Chorro, SA for the sale of the adjoining surface land needed for the development of the mine, but there is no explanation why that agreement is still an agreement rather than a completed transaction which is registered and gives that ownership to Bula Limited. It is easy to lose sight in all of this of the fact that the purpose of this Bill is to pay nearly £10 million of the taxpayer's money to four individuals for a share in Bula Limited.
It would appear from some entries in the file in the Companies Office that this is not a simple contract for the sale of the surface land; in fact, it is a reference to what appears to be Bula Limited as a mortgagor. If there is some transaction between Bula Limited and Haras el Chorro, SA which involves not just a contract for the purchase by Bula Limited of the surface land owned by Haras el Chorro, SA but a more complicated agreement which involves some form of borrowing by Bula Limited from Haras el Chorro, SA —and that would appear to be the explanation of the reference to a mortgagor in this agreement—then of course this can have a bearing on the value of the shares being purchased.
I think we are entitled to ask, is the transaction such that it should, on the one hand, increase the value of what is being acquired by the Minister or, on the other hand, decrease that value? It is not at all clear what the position is, and I think it is not unreasonable that we should ask for some details as to what is involved here.
The Minister was making the point that it has not been established at all that there are any worthwhile minerals involved under the Kruger lands. That may be so, but I would suggest that there is at least as good a chance of the discovery of worthwhile minerals under the lands as there is of the discovery of oil wells in the waters off the western coast of this country, a factor which recently the Minister was indicating presented a very good opportunity for this country. It may be, and we all hope it is; nevertheless, I would suggest that on the basis of existing information, if you are trying to sell your chances on an oil well in the waters off the western coast, on the one hand, or, on the other hand, the chances of minerals being found in this land adjoining the Navan orebody, I think you would find an easier market for the minerals hopefully adjoining the known Navan orebody.
Therefore the question of what is involved in this transaction in so far as it relates to Bula and in so far as it affects either the potential assets of Bula Limited or the liabilities of Bula Limited, these are matters that ought to be disclosed to the House. Of course, an inquiry of this nature does involve the disclosure of the business of private companies—two private companies in this case. A lot of the information which was being sought was information which statutorily should have been disclosed anyway under the Companies Act, but was not, but in so far as the inquiries seeking information go beyond what is required to be statutorily disclosed, I am afraid that is one of the hazards that face a private individual or a private company that deals with the State, and in particular a private company that deals with the State and proposes to sell a minority of its shareholding for very substantial money to the State. It may be unfortunate but I suggest it is quite unrealistic to put a proposition to the House that any Government can come in here and propose to spend money, as is proposed to be spent here, close to £10 million, on a minority investment in a private company, and expect at the same time that there will be no inquiry on the part of the Members of this House or of the other House into the affairs of that private company. Of course there must be.
If the Minister were investing his own personal money in this, then the proposition being put forward would be a reasonable one, a matter entirely for him, but it is not his personal money; it is the taxpayer's money. It may be unfortunate and it may lead to difficulties; in some cases it may lead to a certain amount of inefficiency. However, when you are dealing with the taxpayer's money, then you must face the fact that there is a degree of accountability required which is not required if you are dealing with your own money. You may not like it but it is a fact, and anybody involved in such a transaction knows that is so. It is not something directed against the private individual or the private companies concerned. It is a natural corollary that follows from dealing with the State, particularly in regard to large amounts of money.
Consequently, the inquiries being made as to the precise nature of the relationship between Bula Limited and Haras el Chorro, SA, are in accordance with the principle I have been trying to enunciate. I do not think we should either seek or be given any information in regard to Haras el Chorro which is not relevant to their relationship with Bula, but we ought to be given all the information that is relevant to their relationship with Bula, information, as I said earlier, in relation to the potential increase in the value of the assets of Bula or, alternatively, to the actual or potential increase in the liabilities of Bula.
Broadly speaking what the Minister has said is that there is a contract for the sale of the surface land owned by Haras el Chorro. On the face of it the information on the file of Bula and referred to by Deputy O'Malley does not bear out what the Minister has said. Therefore I would ask him to clarify the nature of the agreement between the two companies: how does a reference to Bula Limited as a mortgagor arise in the file in the Companies Office in relation to their transactions with Haras el Chorro? What is the nature of that mortgage or debenture, if it is a debenture, which leads to this situation?
The reference in the Companies Office file is to particulars of a charge created by Bula and which is described here as legal mortgage. It is dated 30th September, 1976, and is between Bula Limited as the one part and the Northern Finance Corporation as the other part. It is securing all sums due or to become due by Bula Limited, both principal and interest, to the Northern Finance Corporation on any account whatsoever. But then the property is described as all that comprised in the agreement dated 17th February, 1975, made between Haras el Chorro, SA, and the mortgagor of the other part. That mortgage covers the lands comprised in Folio 26646 County Meath: but excluding and excepting thereout the mines and minerals on and under the said lands. It goes on to describe particulars of the property charged as all the estate, right, title and interest referred to in paragraph 1 of the agreement dated 17th February, 1975, and made between Haras el Chorro and the mortgagor.
One can interpret this in a number of ways. I do not wish to waste the time of the House speculating on it if the Minister will tell us what is involved in the relationship between Bula and Haras el Chorro. The Minister will appreciate this is just an indirect version because it refers apparently to a mortgage or charge by Bula in favour of the Northern Finance Corporation Limited of lands they have acquired or are in the process of acquiring from Haras el Chorro. If the Minister would clarify the nature of the agreement between the two companies it would help to clear up some of the questions that arise and not all of which we have put yet. The Minister's explanation of the situation has been that what is involved is a simple agreement for the acquisition by Bula Limited of surface land. That would not appear to be a sufficient explanation to give any rational meaning to the increase under the heading quoted in the file of Bula Limited in the Companies Office.
I rise briefly to make this point. I sought to suggest to the Deputy that the points he was making were not relevant to the Bill but he says they are relevant. The Deputy seems to be asking the House to do the impossible—to decide on the value of the shares of which the House is authorising purchase. The shares have been valued by an independent arbitrator and the basis on which the Minister has come to the House is that he is purchasing something which has been the subject of independent arbitration. When fixing shares the arbitrator takes into account the underlying assets of the company. One of these is the contract to which reference has been made. To suggest that it is the nature of the contract that is relevant is not to answer the point I made, which was that it seems to me that the Minister had indicated the nature of the contract. This is a contract which was taken into account when the valuation of the shares was being fixed. The Dáil is being asked in this section to authorise payment for these shares. It would appear that the other matters to which the Deputy refers are not relevant. Mainly what he is asking the House to do is to value the shares.
Happily the situation is not as simple as the Attorney General would wish it to be. Perhaps the Minister could reconcile his description of this arrangement with the Panamanian company as being a simple straightforward acquisition deal which would create no notice if the company happened to be Irish—with the statement of the managing director of Bula which was issued either during or immediately after the debate here on Tuesday last and in which he said that the agreement represents the deferred payment mortgage arrangement and that payment was to continue for a period for whatever they were buying. Mr. Wymes did not go on to specify how much the payment should be or to say what exactly was the nature of the transaction.
Progress reported; Committe to sit again.