Dáil Éireann debate -
Tuesday, 8 Mar 1977

Vol. 297 No. 7

Bula Limited (Acquisition of Shares) Bill, 1977: Committee Stage (Resumed).

Question again proposed: "That section 2, as amended, stand part of the Bill."

Mr. O'Malley

Since the debate this day week the position in regard to the Companies Office file on this company has clarified itself a little further and there have been further developments. Some further expensive charges have appeared on this file in favour of a new bank which has come on the scene for the first time—the Ulster Investment Bank Limited—and a further charge to one of the existing banks.

In addition, I received in the post this morning from my searchers a letter enclosing copies of the three annual reports for 1974, 1975 and 1976 for this company. They told me these reports became available on the file for the first time last Thursday, 4th March. They were not filed on the 24th January as the Minister stated in this House. Apparently the three reports were filed for the first time on the 25th February, 1977, and were made available to the public for the first time last Thursday.

In the short time at my disposal I have examined these documents, which are of considerable interest. I shall have to refer to them, perhaps, in some detail, at this stage and at later stages. The first thing that appears is that there was a major change in shareholding in this company about which we were never informed by the Minister. So far as one can judge from the returns filed, that change in shareholding took place on 12th December, 1975, the date of the signing of the secret agreement between Bula Holdings, Patrick Wright, certain other parties and the Minister. On that date Bula Holdings, the unlimited private company whose shareholders we do not know, transferred 800,000 shares to a company called Norofin Nominees Limited, having its address at Norofin House, 7-8 Wilton Place, Dublin, 2. This company, I understand, is a subsidiary of the Northern Bank Finance Corporation Limited which, in turn, is a subsidiary of the Northern Bank Limited, which is a subsidiary of the Midland Bank Limited. We have the situation, therefore, that the registered ownership of 800,000 shares is under the effective control of the Midland Bank Limited, one of the major London clearing banks, and the other 200,000 are under the control of the executors of the late Patrick Wright. There are a number of matters about which we were never informed. We have a new director who has been there for some time, but we were not informed of that fact.

Mr. Crowley

Is his name Keating?

Mr. O'Malley

No, it is Mr. Cathal Young. He may be representing the Midland Bank, I do not know. He appears to have come on the scene about the same time as the Midland Bank became registered as owners of 80 per cent of the shares in Bula Limited. It is strange that we did not hear about this fact before.

The matter I want to deal with in particular, as a result of this major change of shareholding in the company into Norofin Nominees Limited is to ask the Minister what is the position now about the enforcibility of the secret agreement of the 12th December, 1975? The agreement was made between Bula Holdings, Patrick Wright, now deceased, certain other parties, whom the Minister named as two Messrs. Roche, Mr. Weymes and Mr. Wood, and the Minister. That agreement contained a guarantee by what is called in section 1 the "certain other parties" who, at that time, were all the directors of Bula Limited, but now there is another one. When I pointed out that this indemnity existed under article 11, the Minister made the point that these four men did not guarantee in their capacity as directors —they guaranted in their capacity as shareholders. I pointed out, with the knowledge that was available to me at that time, which was the 1973 company's return, that the major shareholder then was Bula Holdings, an unlimited private company whose shareholders we did not know and, of course, Patrick Wright. We now find that for the past 15 months at least even Bula Holdings are not shareholders, that it is now Norofin Nominees Limited, in respect of 800,000 shares, 80 per cent of the authorised share capital.

I believe the public are entitled to a reply to this question. Since Bula Holdings are no longer the shareholders in this company and since the information given in section 1 is misleading, considering on that very day they gave up their shareholding, how can the Minister enforce any guarantee of performance of the contract, the opening of the mine and the working of the mine against what in effect is the Midland Bank? What good are those limited guarantees given by the directors, whom I showed were not shareholders when Bula Holdings were still shareholders. They are still less shareholders now when Norofin Nominees Limited are shareholders. What good is that guarantee of performance in the agreement now? Why were we not told about a matter that is of fundamental importance to this whole affair, that 800,000 of the shares were transferred to a subsidiary of a major British bank?

It seems to me that the reason they were transferred is probably because the bank wanted further security for their lendings. The result is that this company can now, to a great extent, in aid of their lendings to the company, more or less do what they like. If the board of the Midland Bank in England decided that they do not want to operate this whole scheme, what can the Minister effectively do about it? I suggest that he is in a position where he can do nothing about it. I tried to remember, after reading this this morning about Norofin Nominees Limited now being registered as owners of 80 per cent of the shares, who comprise the board of the Midland Bank. I recalled that a great many major figures in the Tory Party in Britain comprise the greater part of the board of the Midland Bank. If my recollection is right, I think the current chairman is Lord Armstrong, a former Permanent Secretary to the Treasury in Britain and a real pillar of society there.

It was bad enough when the Minister was locked to a minority situation vis-à-vis four Irish businessmen with no mining experience but I am sure even he will agree that it is a great deal worse when he is now locked into a minority situation with a fine respectable British Bank, the Midland Bank. The Minister will probably tell me that Norofin Nominees Limited, which he never told us about, during all this debate are only holding the shares as nominees for Bula Limited or somebody like that. They are registered and they can effect or refuse to effect a transfer as they wish. If they run into any difficulties with the directors, all they have to do is call a general meeting and they get their way because they are the registered owners of 80 per cent of the shares of the company. They can pass a special resolution or do anything else they like.

How can the Minister say that he has a valid, practical or worth-while guarantee of performance in respect of this? The transfer of the shares to Norofin Nominees Limited took place on 12th December, 1975. It was only on last Thursday, 3rd March, 1977, that the public, who are entitled to knowledge of this kind, could become aware for the first time that this very significant transaction had taken place. It seems extraordinary that this debate, which began in the House on 1st February, more than five weeks ago, should have been allowed by the Minister to drag on without our being informed that the Midland Bank, in effect, through their nominees and their subsidiaries, were the registered owners of 80 per cent of the shares in the company, into which he is buying with more than £9½ million of the taxpayers' money.

Within the past few weeks two further major charges appeared on the company's file. The first one is a deed of charge dated 4th February, 1975, registered in the Companies Office on 22nd February in favour of the governor and company of the Bank of Ireland over seven folios of land in County Meath for all sums due or to become due by the company to the bank in any manner whatsoever. The other one is a more interesting one. It is a debenture dated 15th February, 1977, registered on 18th February, for all sums due or to become due to the bank by the Ulster Investment Bank Limited. It seems to cover just about everything that was covered in all the previous debentures. We are entitled to ask are the previous debentures paid off or are they subsisting? If they are paid off, how is it that no note of satisfaction appears, as far as I can see, on the company's file in the usual way?

The charge to the Ulster Bank seems to cover more land registry folios than were covered already. It is also very interesting that instead, apparently, of a contract dated 17th February, 1975 between Haras el Chorro SA and Bula Limited we now, for the first time, find the disclosure here in this file of the company of a further contract dated 17th February, 1973, made between the same parties in respect of all the estate, right, title and interest of the said Haras el Chorro SA in and to any minerals on or under the lands comprised of folio 26646 County Meath and subject to the terms and conditions contained in the said contract.

We now have a second contract dated apparently exactly two years earlier than the first one in relation to the minerals under these lands which are called for convenience, the Kruger lands. How is it that we did not hear about the second contract before this? Why is it only when I went to the public file in the Companies' Office that I discovered the apparent existence of this second contract made two years earlier that we never heard of? We are entitled to answers to these questions. I hope we will not any longer be fobbed off with the reply that these are commercial transactions or whatever we were told in that respect before.

We are also entitled to inquire as to the position about the mineral ownership under the various holdings of land that exist in the townland of Nevinstown, the important one so far as this transaction is concerned. We know that the Wright farm, as it used to be known, is in Nevinstown. I understand that virtually all of it is in Nevinstown, the townland north of the river where all the minerals are centred. It is not easy to glean all the information one would like from a Land Registry map, which can be confusing if you do not have all the folios as well. From an inspection it would appear that as well as the Wright lands, which comprise about 116 to 117 acres, in Nevinstown there are ten other holdings which are registered in the Land Registry. Prima facie, therefore, there are ten other holdings in that townland comprising approximately the same area as the original Wright farm. It seems probable that all ten other holdings are now owned by Bula limited. It seems probable that in the majority of those ten holdings the minerals are owned by the State; in fact, it is certain in respect of several of them that the minerals are owned by the State. I have not heard nor has the House heard of any acquisition order in relation to those minerals or that any consideration has passed from Bula Limited to the State for the opportunity that has apparently been afforded to Bula Limited to mine these minerals.

These minerals in half of Nevinstown townland are the property of the Irish people and they will be mined by a private company. What are we, the citizens of this country, getting for our 117 acres of mineral rights in Nevinstown? Is the position not that the true consideration for this deal, this purchase of a 24 per cent minority holding in a private limited company, is not simply £9.54 million but £9.54 million plus the value of half the minerals in the townland of Nevinstown? What is the value of half the minerals in the townland of Nevinstown? I do not know. If one goes by the valuation that the Minister has quoted here with approval regarding the minerals in the Bula half—or privately owned half—of Nevinstown, one would be entitled to feel that the State's half is pretty valuable by any standards. Even if, as could be the case, the State's minerals are not as valuable as the private minerals in the Wright half—of course one cannot be certain of that but postulating that they are not—do they not still hold a considerable value since they actually adjoin the Wright orebody, of which we have had so many extraordinarily high valuations? If this open pit which Bechtel propose is to be in the town of Nevinstown, as it must be, it is reasonable to assume that part at least of that open pit will be situate on non-Wright lands or on lands in which the State is the owner of the minerals. What consideration is the State getting for giving away to a private company approximately 117 acres of State minerals? I asked the Minister the last day if there was any royalty; he told me there was no royalty.

On the basis of these minerals being given away is it not fair to assume that, at a very conservative estimate, the real consideration is probably at least twice the £9.54 million that is being given for this 24 per cent? The figure may be a great deal more than twice £9.54 million. Assuming that it is even twice the actual cash payment, we are entitled to ask if this is the Minister's idea of a good bargain. Why were we not told about this before and why has the Minister consistently refused during the four years he has held office to make a minerals acquisition order? If he was advised that there were problems in respect of the Wright lands, why did he not make it in respect of the registered lands? Where there was any doubt about the State's title why could the Minister not have sold those mineral rights if he wanted to do a deal with Bula? Why is it that we have heard nothing about any arrangement between the State and Bula Limited for the utilisation of those minerals by that company.

The Minister told us that, after all the arrangements made with Bula, Haras el Chorro, SA still own the minerals in 224 acres in the adjoining townland to the west of Nevinstown, that is, the townland of Rathaldrin. Why was there not a minerals acquisition order made in respect of the minerals in 224 acres of Rathaldrin? Why was this company, which is still registered as owning those lands, allowed under one of the contracts made either in 1973 or 1975 to retain ownership, so far as one can judge, of the mineral rights in the farm immediately adjoining Nevinstown and thereby have those Irish mineral rights which could have been acquired by the State in the beneficial ownership of a company which is domiciled and registered in Panama, that well-known tax haven in Central America?

One is entitled to ask a number of questions about this whole arrangement because the Minister has said that the reason he did not make an order regarding the minerals in the lands comprising folio 26646, County Meath, was because there was no evidence of any rich deposit of minerals in those lands. It is worth noting that within the last week an exploration company, Messina, announced the discovery of a reasonably significant but certainly not very rich orebody south of the Tara holdings, south of the Blackwater river but immediately adjoining the Tara mine. If there are significant minerals close to the Tara operation south of the river is there not at least a possibility that there are significant minerals close to the Bula operation north of the river?

The facts are that on 17th February, 1973, an agreement was entered into by Bula Limited whereby an arrangement regarding the minerals was concluded between them and Haras el Chorro SA. This means that the payment for these minerals as between Bula Limited and Haras el Chorro SA goes outside the country and it goes to the tax haven of Panama to which I referred. Therefore, what ever the Minister does or does not know about the existence of minerals the owners of Haras el Chorro SA made very sure that any minerals would be paid for direct to Panama and the payment must go in the circumstances direct to Panama, a tax haven. The transfer of ownership of shares in such a tax haven could provide a facility not just for foreigners but for any Irish resident who had a liability for the payment of tax derived from an Irish mining operation.

I think, therefore, we must be given the answers to four questions which I will pose as follows arising out of this matter: (1) who were the beneficial owners of Haras el Chorro SA in June, 1972, when they became registered in the folio which I quoted; (2) what was the domicile for tax purposes of these owners at that time; (3) has any change occurred in the beneficial ownership of that company since 1972; (4) has Haras el Chorro SA any agreement as to the payment of commission or management fees with any person or company elsewhere or, indeed, anywhere in the world?

For the Minister's information I would state to him that commissions and management fees payable to unknown parties is the stripping device used by offshore tax vehicles to cloak the identity of the recipients of these moneys which are got out of the country in this way. From inquiries I have made I discovered it is impossible in the Republic of Panama to find who the beneficial owners of a company such as this registered there are and the normal procedure that is used in that country and in some others where this sort of operation is carried out is for two companies to operate parallel or in tandem and the profits that are repatriated, if that is the right word, to Panama directly or indirectly from an Irish mining or some similar operation are paid into the account of the Panamanian company concerned in Panama and are then paid out of that account into the accounts of another company, not as profits but as what is described as commissions and management fees. The beneficial owners and ultimate beneficiaries in respect of the second company to which these payments are made are essentially the same people or persons who operate in trust for the same people as those who are beneficial owners of the first company.

The matter is a complicated one but nonetheless it is operated. It disturbs one to think that, because of the nature of the transactions—and some extraordinary things have happened in relation to this company—there is the possibility that some one or more Irish residents and, I might add, Irish citizens, could in fact be involved in Haras el Chorro SA for some purpose other than the simple purpose of owning the land. It is worth asking, for example, why after an interval of nearly four or rather five years—no, sorry, a little over four years—from the original agreement recited here between Haras el Chorro SA and Bula Limited Bula are not registered on the Haras el Chorro SA folio in the Land Registry. What security have Bula and what security has the State and the taxpayer if Haras el Chorro SA decided to sell these lands in the morning? They are free to do so. There does not appear to be a charge on that folio of any description in the name of Bula or anybody else and there is nothing there to stop the company selling the lands for which it is believed Bula paid about £500,000 some years ago. What security have they and is it, in fact, that their security is that they have perhaps some sort of say in some way in the affairs of Harras el Chorro SA and that therefore they do not have to worry about who is registered in the Land Registry as owner of the lands because it is immaterial whether it is Haras el Chorro SA that are registered or Bula? Is that, I wonder, the explanation?

Indeed, one is lead to suspect that it may well possibly be the explanation when one examines the wording used in the registration of one of the earlier mortgages—not one of the earlier ones, but the third or fourth last—registered against this company, a legal mortgage dated 30th September, 1976, between Bula Limited on the one part and Northern Bank Finance Corporation on the other part. That particular one which was lodged on that date, 30th September, 1976, sets out two things which are charged in favour of the Northern Bank Finance Corporation. First of all, it sets out the lands. It refers to an agreement of 17th February, 1975, and it sets out the lands being those comprised in Folio 26646, County Meath, but excluding and excepting thereout the mines and minerals on or under the said lands. That is, just the land itself is charged. The mines and minerals are not. Then it goes on in the second section of the charge to charge all that and those, the estate, right, title and interest referred to in paragraph 1 of the agreement dated 17th February, 1975, and made between Haras el Chorro SA on the one part and the mortgagor on the other part. Deputy Colley referred to this the last day. The mortgagor here is, of course, Bula Limited.

Why are we not told about that mortgage and the amount of the mortgage? We are being asked to ratify the payment of nearly £9½ million of taxpayers' money for a small minority interest in this company. Why are we not told about its mortgage? To continue the quotation "and the mortgagor on the other part therein described as all the estate, right, title and interest of the vendor"—and I want to underline the words "of the vendor" here because I think this may well have great significance in the light of what I have been saying about offshore asset stripping operations—"in and to any minerals on or under the land comprised of Folio 26646 aforesaid upon and subject to the terms and conditions contained in the agreement together with the mortgagor's rights and benefits acquired under the said contract". What is charged here is not Bula's interest, because Bula is the mortgagor and the purchaser. What is charged is the vendor's interest. And who is the vendor? The vendor is Haras el Chorro SA. And what is the tie up that enables the interest of a selling company to be charged in respect of the liabilities of the purchasing company? I have been at the law on and off for 16 years and I have never seen the vendor of a property charging his interest. I suggest he cannot because he has divested himself when he has sold but, obviously, in this case there is not a divesting and Haras el Chorro's interest has been mortgaged in aid of Bula Limited. Is there any explanation for that other than that there is some overlap between Bula Limited or the people associated with it and Haras el Chorro SA, the Panamanian tax vehicle? One is bound to ask that in the context of this whole affair of secrecy and non-compliance with the law, the non-furnishing of information that by law is required let alone required by common sense.

I am entitled to renew with particular aptness at this juncture this party's request that the secret agreement of 12th December, 1975, be laid on the table of the House. In addition, I am entitled to ask that the two agreements of 17th February, 1975, between Haras el Chorro SA and Bula Limited be laid on the table of the House and the agreement of 17th February, 1973, between the same parties. I am also entitled to an answer to the questions I asked in relation to the ownership or control and any possible changes in the Haras el Chorro SA set-up. These matters considerably disturb me from my study of this and anybody else in the House who wants to look into these details can have all the documents in my possession. I believe if they read those documents they will be equally disturbed by this very curious carry on.

Is it not a strange thing that a Bill was introduced here at the end of January, 1977, referring in the first section to a secret agreement dated 12th December, 1975, naming some of the parties to that agreement but, in particular, naming the principal party which was Bula Holdings Limited and that the Minister who introduced that Bill and has conducted the debate here should have neglected to tell the House that on the date of that agreement 800,000 shares were transferred out of the name of the principal shareholder that appears in section 1? Is that not a matter that is fundamentally relevant to this entire affair? Is it not a matter which entitles all of us to be even more suspicious about all this than we were in the past?

Minister for Industry and Commerce (Mr. Keating)

I shall try to deal with the matters raised by Deputy O'Malley in the order he raised them. The first was the matter of Norofin Nominees Limited, the subsidiary of the Northern Bank Finance Corporation Limited which is a subsidiary of the Northern Bank. The transaction referred to was one where the shares in Bula Limited which were held by Bula Holdings were transferred to Norofin Nominees Limited. That was a private arrangement between Bula Holdings and Norofin Nominees Limited which will not affect my rights. At the time of the completion of the contract for the share purchase by me the shareholders in Bula Limited, that is Bula Holdings and the estate of Mr. Wright, must be the owners of the entire share capital of Bula Limited. That is a matter for the vendors to be able to give me what I purchased from them.

Mr. O'Malley

They cannot do that.

Mr. Keating

It is a speculative situation.

Mr. O'Malley

It sure is.

Mr. Keating

As the House is aware, I have extremely good legal advice and this matter is being handled by expert people but the situation, which is a perfectly straightforward one, is as I described it; it was a matter between Norofin Nominees Limited and Bula Holdings. With regard to Haras el Chorro SA, I have indicated during the course of the debate that the principal contract between Bula Limited and that company is one for the acquisition of lands known as the Kruger Lands which Bula require as support lands for their mining operations. These lands are essential to enable the company to mine the deposits of lead and zinc which underlie the Wright lands. It is the surface use of these support lands which is important. The lands have not been acquired because of mineral potential. I am advised that these lands are unlikely to contain workable deposits of minerals. However, there is a second contract which would enable the right to work minerals to be acquired by Bula Limited if the present opinion of experts is proven wrong and the workable deposits are found to exist.

These two contracts are listed in certain of the charges registered by banking institutions in the file which is in the Companies Office. They are listed because the banks have accepted these contracts as securities for making loan facilities available to Bula Limited. The entry in respect of the charge is in legal language but I believe the term "mortgagor" in this case is used to define Bula's relationship with the Northern Bank and not with Haras el Chorro SA. The suggestion by Deputy O'Malley that the entry could be read as meaning that Haras el Chorro SA have mortgaged their interest in the minerals to the Northern Bank is not so. My understanding of the entry in the Companies Office file is that the bank have accepted Bula's interest in the two contracts as a security for advancing a credit facility to Bula Limited in the same way as they have accepted Bula's interest in the Wright lands and minerals as security for borrowing. Bula has entered a commercial contract with Haras el Chorro SA and I, as an investor in Bula, am concerned with the commercial aspects of that which will be subject to the same sort of detailed scrutiny that all other matters on closure will be. I am informed as a matter of fact that the 1973 date to which Deputy O'Malley made reference is incorrect.

Mr. O'Malley

Would the Minister like to see it because he is suggesting I am reading this wrongly or misleading the House?

Mr. Keating

I have made no such suggestions. My understanding is that it is an error and that the contracts are of the same date, 17th February, 1975.

Mr. O'Malley

But there are two of them.

Mr. Keating

Yes.

Mr. O'Malley

Why are they not registered in the Land Registry?

Mr. Keating

I want to add——

Mr. O'Malley

Pardon.

Mr. Keating

In regard to the minerals about which Deputy O'Malley made great play——

Mr. Crowley

The Minister is the most uncomfortable Minister I have seen for a long time in this House.

Mr. Keating

There is no evidence whatsoever that there are any workable minerals outside the Wright farm. There has been no making over to Bula of any State rights in any minerals whatever and, therefore, that entire speculative passage by Deputy O'Malley simply does not arise. First, there is no evidence that there are any minerals and, secondly, there has been no making over of any State rights whatever to Bula.

I will go back to the matter I reiterated on the last occasion which is that a company that is proceeding to develop a mine against an asset of between 15 million to 20 million tons of rich ore containing more than two million tons of metal has the right and duty to acquire service land and the physical environment in which it can carry on mining. It has the right to incur charges in order to carry out that development and it is prudent that it should do so. My task is to see that any such contracts entered into and any such charges are made available to my scrutineers and are thoroughly checked and understood. I can give the House an absolute guarantee that that is being done meticulously. That is a duty I have and it is being carried out.

Mr. O'Malley

Would the Minister care to answer the four questions I asked about Haras el Chorro SA?

Mr. Keating

I made the position about Haras el Choro SA quite clear and, perhaps, the Deputy will think through the information I gave him. I tried to take it clearly and slowly. He should digest the implications of that information on the matters he raised.

Mr. O'Malley

I would like to point out the implications to the Minister. He has told us that Bula have purchased substantial land—I understand about 230 acres—which belonged to Haras el Chorro SA, and which the Minister referred to as the Kruger Lands. The company have bought these lands without the mineral rights because the owners regarded the minerals as too valuable to sell——

Mr. Keating

That is not so.

Mr. O'Malley

Otherwise why should they go to the trouble of trying to separate the minerals from the land, which is never done in the normal way? One understands that the price Bula paid for these lands is in the region of £500,000, although they did not pay it all because they have taken mortgages from the vendors. It is understood that they paid this money more than four years ago but they are still not registered as owners in the Land Registry. Although it is difficult to make it out from the folio, as far as I can see there is no inhibition or charge to protect the rights of Bula. The possible explanation of what on the face of it would appear to be gross negligence on their part is that it is not gross negligence because there may be some overlap between Haras el Chorro, SA and Bula, there may be some identity of interest. I asked the Minister four specific questions which I am entitled to repeat because he did not even attempt to answer them. My question referred to the beneficial interest in Haras el Chorro SA in 1972 and whether there were any changes since then. I also wanted to know the domicile of the owners for tax purposes and if there was any agreement on the part of the company for payment of commissions and management fees with any person or company outside this jurisdiction, presumably in the Republic of Panama.

I am perfectly entitled to ask these questions. On the one hand the Minister tells us that Bula own this 230 acres, what he calls the Kruger lands, but if one goes to the Land Registry one finds out that Haras el Chorro SA own them. Bula have paid a sum, reputed to be in the region of £500,000, for these lands. The State is buying into Bula Limited but we seem to have no security. If the owners of Haras el Chorro SA in Panama decided tomorrow morning that they wanted to sell this 230 acres there is nothing to stop them doing so. On the evidence of the title that appears on the register, as far as I can see the Registrar of Titles has no option but to register any transfer that is validly executed by Haras el Chorro SA. That is why these questions are pertinent and relevant and need to be answered.

Mr. Keating

The Deputy knows that the taxation position of Haras el Chorro SA is confidential between them and the Revenue Commissioners. In regard to the timing of actions by Haras el Chorro, I will put some points on the record.

With regard to the vesting of the lands in the name of Mr. Kruger, the Land Commission received such a request in June, 1970, and consent was given in November, 1970. The consent in respect of the transfer of the lands to the company was given in December, 1970, and I think that should be known. Deputy O'Malley pointed out that the registration did not take place until 1972. My information is that the contract of sale for the purchase of the lands was concluded at the end of 1970, the conveyance was completed in early January, 1971, an application for registration in the Land Registry was made in February, 1971, and the lands were not formally registered until July, 1972. I am saying that to indicate that the involvement of Haras el Chorro SA predated the purchase contract between them and Bula by a number of years.

With regard to the question of registration, the lands are not registered in the Land Registry because the sale has not been completed as a contract of sale. Bula will not require the use of the lands for some time; it is not possible to be specific on this but they will not be required for some time after start-off. The question of the completion of the contract and of the sale and the matter of payment are deferred. It is not sinister or anything other than perfectly normal procedure.

Mr. Colley

There are a number of matters that must be clarified. Perhaps we might start by concentrating on the matter the Minister has been discussing, namely, the question of registration in the Land Registry of ownership of what he referred to previously as the Kruger Lands. It would appear that the contract for the purchase of these lands by Bula was entered into in February, 1975.

Ignoring the "1973" which I gather from the Minister is a misprint, we will take it as 1975. The position then is that the contract was entered into just over two years ago. The Minister says the sale has not been completed and that is the reason the registration has not taken place, and he finished up by saying that what has happened is perfectly normal. I do not think it is perfectly normal. It may be that there is an explanation for this lengthy delay, but I think the Minister will find, if he makes inquiries, that two years is not normal. There are cases where it happens, of course, and there are reasons why it can happen, but they are not normal cases. Consequently, I would ask the Minister, first of all, if he could tell us why the delay of over two years in completion?

Mr. Keating

I think the position is that from the Bula point of view they need the lands but they do not need them now. As I understand the negotiations, it was a matter of saying "We have a contract that must be discharged, but the payment is deferred because the need for them is deferred".

Mr. Colley

The Minister may not appreciate—and I am not blaming him when I say this because it is a technical, legal point—the point that was made by Deputy O'Malley—that one would expect in circumstances of this kind that there would be what is called an inhibition registered on the folio, which is a warning to anybody who might otherwise be tempted to deal with the registered owners that there is an interest existing. Could the Minister make inquiries and inform us why this fairly normal procedure was not followed in this case?

Mr. Keating

My professional staff will take care of all these matters at closure.

Mr. Colley

The Minister's reply does not quite meet the situation. The Minister has painted a picture—and I do not wish to do him an injustice when I say this; I think it is a fair summary of what he said—of two companies operating at arm's length, one of them having a use some time in the future for the lands of the other entering into a contract for the purchase of these lands, but nothing being done to complete that transaction because the Minister has said there is no need for the lands at the moment.

That is an understandable position, but it is not understandable that this would happen and that no effort would be made to register an inhibition on the folio. This would be a normal precaution by Bula Ltd., into which the State is buying, and I think it is not unreasonable that we would ask why this normal precaution has not been taken. It is not sufficient for the Minister to say that his legal advisers will look after all these matters in due course. The question is why they have not looked after this particular point up to now. It may be that there is some other explanation, but, in the absence of another explanation, the explanation advanced by Deputy O'Malley as a possibility is not unreasonable, that is, that there is no need for an inhibition because, in fact, the parties are not at arm's length.

Mr. Esmonde

I take it Deputy Colley is advocating that there should have been a caution or an inhibition entered on the folio?

Mr. Colley

I am asking why not.

Mr. Esmonde

I have been a few years longer dealing with registered land, I suppose, than Deputy O'Malley and I cannot recollect seeing a case where a caution or an inhibition was put on a folio pending the closure of a sale. You do it if you suspect that there will be dirty work at the crossroads, if you cannot rely on the solicitor acting for the client on the other side, but to approach this normal transaction in this way——

Mr. O'Malley

Two years after, the contract still not closed, is that normal?

Mr. Esmonde

Whilst everybody was indulging in property deals in 1970, 1971, and 1972, it was not unknown to see deals that did not close for four years and many subsidiary transactions taking place before the final closure of the sale.

Mr. O'Malley

Were they with Panamanian companies?

Mr. Esmonde

They were with companies with peculiar names.

Mr. Colley

In relation to the contract between Bula Ltd. and Haras el Chorro, SA, could the Minister indicate what was the closing date provided for that sale?

Mr. Keating

We have reached the stage now where I am being questioned on details of a contract between a private company and another private company.

Mr. O'Malley

In which the Minister is trying to buy an interest.

Mr. Keating

I made it clear that I will have all the relevant matters carefully scrutinised by experts, but my own opinion and the opinion of others from this side of the House has been, and is on the record, that these are matters that are not relevant to be teased out in this detail, and that it is absolutely unique in the history of the House that an effort is being made to do it in this instance. It is not in the tradition of the House, and it would make dealings between the State and private companies pretty well impossible if this were to be the norm.

Mr. Colley

The Minister is repeating something he said before, and therefore I may be forgiven for very briefly repeating what I have had to say on this subject, that is, that the unprecedented nature of this debate lies in the terms of the Bill. This is an unprecedented Bill, and that is what has produced the whole difficulty and more and more as we go into it, it becomes clear that if there had been full disclosure by the Minister we would not have had anything like the same difficulty we have had in dealing with this matter. If I may return to the question, the Minister appears to have lost sight of the salient features of what is going on. He tells us we are now asking for details of an agreement entered into between one private company and another private company.

Mr. Esmonde

Is that not what the Deputy is asking?

Mr. Colley

In strict reality that is true, but is it not about one-quarter of the truth? Is it not the whole truth that the Minister is asking this House to agree to the payment of over £9,500,000 to some shareholders in one of these private companies and that it now emerges, largely through the industry of Deputy O'Malley, not from any disclosure by the Minister, that one of the matters to be considered in this transaction is that there is an agreement with this company in respect of which the Minister proposes to pay over £9,500,000 for a 25 per cent share? There is an agreement between that company and another company for the purchase of land, and there are unusual circumstances attached to that, in that over two years have elapsed and the sale has not been completed. The Minister has given an explanation as to why that has happened, but given that the explanation is correct, I want to suggest again that it would have been a normal precaution by Bula Ltd. to have entered in the relevant folio of the Land Registry an inhibition or a caution relating to this contract, but that has not been done. I want to ask again why it has not been done. Is it not true that we are also entitled to ask since the State proposes to acquire an interest in this company, in what way are the interests of that company and, consequently, the interests of the State, being protected? Why are they not being protected by the registration of an inhibition or caution on the folio?

On the face of it, Bula's interests and, consequently, the State's interests, are not being protected. We know that the people concerned with Bula Limited are good business people, that they are not the kind of people to take unnecessary risks or whose legal advisers would take unnecessary risks, but it appears that they are taking a risk here. For the reason advanced by Deputy O'Malley, it is possible that they are not taking a risk. There may be another explanation and if there is the onus is on the Minister to give it to us. However, if there is no other explanation it is not adequate for the Minister to say that in due course his legal advisers will look after this matter. We are not talking about something that will happen in due course. We are talking about the position during the past couple of years when, as Deputy O'Malley said, a sum reputed to be in the region of £500,000 was contracted to be paid for this land. There is nothing on the folio which, in law, would prevent Haras el Chorro, SA, from disposing of this land to somebody else. If it is of great importance as, apparently is the case from what the Minister has said, why, (a) is the deed not completed and (b) if the Minister's explanation in that regard is satisfactory, why at least are precautions not taken to ensure that any potential purchaser is given notice of the existence of the contract? I asked the Minister what date was provided in the contract in respect of closing but by way of reply he went on to talk about two private companies while being careful to ignore the investment proposed for the taxpayers in one of these companies.

It is not good enough for the Minister to adopt this attitude. The State's interests are not being protected. It is the business of the shareholders in Bula to look after their own interests but the matter becomes the business of this House when it is proposed to invest more than £9,500,000 of taxpayers' money. It is for us to look after the taxpayers' interests. This is not being done in this case when there is no indication whatever on the folio regarding Bula's interest in these lands.

If the Minister says that there is no connection whatever between Haras el Chorro, SA and Bula Limited, he is saying there is no protection for the rights of Bula in regard to the transaction. There is provision in the Land Registry rules for exercising such protection. Either there is a connection between the two companies or the interests of Bula Limited are not being protected adequately.

Mr. Costello

What is the Deputy's concern?

Mr. Crowley

More than £9,500,000.

Mr. Costello

Is he concerned that the lands will be sold before the shares are purchased? That would appear to be the burden of his complaint. Such an event would be a disaster. I suggest that if the Minister's advisers were to allow part of the assets to be sold before the State closed the sale, a very serious view would be taken of their competence. I suggest, therefore, that the time of the House be not wasted on an assumption that a fraud would be perpetrated in respect of Bula Limited by the company with whom the contract had been entered into. There is no reason to assume anything like that would happen.

Mr. Colley

That is an interesting intervention from the Attorney General. Is there not provision in the Land Registry rules to cover precisely this situation and why has this provision not been used in this case?

Mr. Costello

Deputy Esmonde has much experience in this field. I, too, have some experience of these matters. It is not unusual for an inhibition or a caution not to be entered. Therefore, there is no significance in their not being entered on the register at this time. This is the position in the ordinary course of events in respect of many transactions. The Deputy seems to be concerned that there may be something sinister behind this and that, because no caution or inhibition has been entered, the State's interests are not being protected. I assure him that there is no justification for such fears.

Mr. Colley

In the case of a normal contract concluded in a normal time there would be no registration of an inhibition or caution but, no doubt, the Attorney General will have appreciated the point of my inquiry as to the date provided for the closing of the sale. If the date is within a reasonable time after the making of the contract, one would not expect the registration of an inhibition or caution at that time but since in this case the matter has dragged on, one would have expected something to be done about it. Alternatively, if the date contemplated at the time of the signing of the contract was very far advanced, say, two, three, four years or more, of the date of closing, one is entitled to ask why an inhibition or caution was not registered at the time of the signing of the contract.

It is not good enough for the Attorney General to give as an explanation an assurance that the State will not complete the deal if it transpires that Haras el Chorro, SA, dispose of the land or mortgage it, as they are entitled to do at present. They are the registered owners and there is nothing in the registry to prevent them from disposing wholly or partially of their interest in the land.

Mr. Costello

Would that not be fraud?

Mr. Colley

On their part, yes, but it would be no consolation to Bula Limited or to the taxpayer that an action could be taken for fraud. That is not a situation anybody would like to see.

Mr. Costello

That will not happen.

Mr. Colley

We hope not.

Mr. Costello

This will all be clarified before the closing.

Mr. Colley

Would the Attorney General care to say why there is provision in the Land Registry rules for the registration of an inhibition or caution in circumstances of this kind? Is this not a provision to cover precisely the sort of situation we are talking about? Deputy Esmonde has stated something which has nothing whatever to do with the situation here. Is Deputy Esmonde trying to tell us that the Land Registry rules are not designed to cover a case of this kind where a contract is entered into and two years later it has not been completed?

Mr. Esmonde

I am afraid we are rewriting a Miguel Cervantes novel called Don Quixote. There is a Don Quixote over there and we are now hearing a Sancho Panza performance going on here. The sort of nonsense we have had to listen to here for the last hour and a half is utterly unrealistic in legal and commercial terms.

Mr. Colley

It is a pity we do not have some facts.

Mr. O'Malley

Every detail I have spoken of is spelled out in documentation and can be backed up. It is not enough for somebody, even for somebody who holds the office of Attorney General, to come here in aid of the Minister and say that it is not usual for a purchaser to protect himself in any way in a sale which is still not closed more than two years after the contract was signed. Heretofore the Attorneys General did not come in here frequently in aid of the Minister, but I suppose previous Ministers were not as much in need of aid as the present Minister. The average person here who does not know what happens in these matters would assume that because the Attorney General comes in and says that it is perfectly all right the purchasers who will expend £500,000 in buying land in this country do not care if they have no protection when the contract, under which they will pay this money to buy these lands, is still not completed more than two years after they signed it. That is not so.

If one was buying a labourer's cottage for £3,000 or £4,000 and the sale was still not closed after two years the purchaser would be protected. Here we are buying a very large tract of land for a figure that is reputed to be in the region of or, perhaps, in excess of £500,000. When the company concerned, which already has shown how lax it is where company law and complying with its obligations are concerned, into which the State has put a huge amount of taxpayers' money for a 24 per cent interest, does not apparently bother to take any steps to protect itself—the Minister has not contradicted this—we are told that that is reasonable, normal and usual. It is not normal or reasonable in Limerick or anywhere in Munster and from my experience of Dublin and elsewhere it is not normal. When the Attorney General makes such a statement, it is hoped that it is accepted and that no one will question the matter any further. The matter is very much questioned further. It is significant, as I referred to the last day, that here again we have the Attorney General sitting right through this debate.

Mr. Halligan

Is the Deputy objecting to that?

Mr. O'Malley

Not at all. I welcomed the fact the last day. We also have the additional benefit today that not alone have we the Attorney General but we have Deputy Brendan Halligan and that is really an acquisition. The elucidation that Deputy is able to throw on all these matters is quite splendid. We are intensely grateful to the Deputy and we hope that his engagements will allow him to stay with us until 7 o'clock.

I asked a large number of questions in my opening statement today. A very small number of them have been partly replied to. Some of my most explicit questions have been totally ignored. One is entitled to wonder is this for the reasons we have had in recent weeks, that the Minister still does not know the answers, or is it, that he has taken the trouble to find out, but chooses to keep them secret as he has kept so much secret in relation to this whole sordid affair over the past number of weeks? One is entitled to inquire as to why this secrecy is maintained at such extraordinary length, a secrecy that has extended over in relation to information which by statute must be made public and which was not made public by the Government.

Since we failed to elucidate many of the matters with which I opened today, I wish to discuss the question of the valuation which has been put on this company and on which the amount payable by the taxpayers tax-free to the four or five concerned shareholders is based. This question is related to this section. Our opposition to this Bill has concentrated on the elements of uncertainty that should weigh with any normal, prudent investor about to embark on the expenditure of £9.54 million at least. It now appears that the expenditure will be a good deal more than that. I hope it is now clear for all to see that this is no time for the Minister to involve himself by means of a secret agreement in the affairs of a company whose start-up date is uncertain, whose commercial viability is unproven, whose capital requirements are unknown and whose management is inexperienced in mining matters and which has already shown itself to have little regard for the statutory rules governing the conduct of the company's affairs. I have shown that to date the management of the company have permitted what appear to be a number of offences under the Companies Act, 1963, and the Minister has not denied this. It appears that these breaches took place on four separate occasions. I have tried to let some light into the effects of the secrecy involved in this tranaction.

Despite the attempts at secrecy and the difficulties that that creates, I propose to deal briefly with the valuation arrived at by the arbitrators which results in this figure in subsection (1) of this section, being payable if this Bill is passed. On Friday, 4th February, 1977, Mr. R. Woods, one of the proposed recipients of the £9.54 million visited the offices of The Irish Times newspaper. He was quite entitled to be there as he is one of the members of the board of trustees of the newspaper. On Tuesday, 8th February, The Irish Times devoted an entire page to an examination of the Bula valuations, quoting extensively from documents which the Minister has seen fit to withhold from the Dáil, the Members of this House being asked to vote this Bill into law without seeing the documents which were made available to this newspaper under circumstances which I described. One of the documents referred to is called the Bechtel Report and the Minister has very correctly referred to the reputation and expertise of that organisation.

Mr. Esmonde

On a point of order, I understand that the purport of this debate is to deal with section 2 in Committee. There has been an amendment before the House, I think amendment No. 4, to the section, which purported to deal with the question of the value of the shares, and that was debated. It appears now that we are being asked to repeat that debate. I am raising the point, is this repetition in order?

An Ceann Comhairle

Clearly repetition is not in order.

Mr. Esmonde

This is what the Deputy is purporting to do now.

Mr. O'Malley

I am speaking on the section as amended, and with great respect I submit I am entitled to speak on the section as amended. It would authorise the Minister to make his payment.

Mr. Colley

The concern of Deputy Esmonde and his colleagues is understandable.

Mr. Crowley

It is for cover-up.

An Ceann Comhairle

Deputy O'Malley.

Mr. O'Malley

I want to state that in the report made by Bechtel they did not, and I emphasise "not", lend their name or their expertise or their reputation to the one single factor which brought into the arbitration all these extreme values which were placed before the arbitrators.

Mr. Esmonde

On another point of order——

An Ceann Comhairle

If it is a relevant point of order, Deputy. The intervention which the Deputy has already made he might have made in ordinary debate. It was not strictly a point of order.

Mr. Esmonde

It has been stated by Deputy O'Malley that section 2 has been amended. It has not been amended.

An Ceann Comhairle

That is not a point of order. That is the kind of comment that might be made in ordinary debate. The section has been amended.

Mr. O'Malley

One might be able to stomach Deputy Esmonde when he is accurate. When he is inaccurate he is even more difficult to stomach. If he would either keep quiet or go away it would be helpful to the national interest in these matters.

I want to quote a few paragraphs from an article in The Irish Times of Tuesday, 8th February, 1977, page 12, based on Bechtel, Sykes and Carsberg's valuations which were done for Bula and which varied between £63 million and £105 million. The article I am quoting from is one of three that appear on that page and it is the one in the top left-hand corner. The quotation is as follows:

The Bechtel Report is a feasibility study on the whole Bula mine undertaking. Dated April, 1976, it contained the basic data which was the base on which all valuations submitted to the independent consultants were prepared. While not a financial evaluation of the mine as such, it nevertheless, on a profitability analysis of the undertaking, discloses a net cash flow of £161m. after tax and capital pay-back of £22.6m. According to Bechtel this represents a discounted project after tax return of 39.16%.

The net present value of the mine on this assumption according to Bechtel, is £94.36m. after discounting the cash flow at 5% which it states is equivalent to a pre-tax rate of approximately 10%.

The basis of this profitability analysis is——

There is a quotation here from the Bechtel Report given in inverted commas——

"an annual increase in net smelter return, operating costs and capital additions and replacements of 9.6%.

The metal prices used are those that were in effect in early 1976— £220 per tonne of lead, US $795 per tonne of zinc (European producer price) and £0.073 per gramme for silver.

According to Bechtel this 9.6% increase in net smelter return...."

It goes on to quote again——

"as prepared by Bula and presented to Bechtel"——

An Ceann Comhairle

I trust the quotation is not too lengthy.

Mr. O'Malley

This is the last sentence. I want to emphasise this part because it quotes again from the Bechtel Report.

According to Bechtel this 9.6% increase in net smelter return "as prepared by Bula and presented to Bechtel" is based on the average increase in European producer price for zinc since the inception of the producer price to January 1st, 1976.

That may be a bit technical in some respects and I would like to refer to it in simpler terms. What has happened is that Bula instructed Bechtel to assume a 9.6 per cent per annum increase in real terms in metal prices over the lifetime of the mine. Bechtel and the other people who prepared valuations on behalf of Bula took that assumption and worked on that basis. It is clear from what Bechtel said that this is as presented to them by Bula. It is not their judgment of the situation but it is one of the parameters within which they are bound to work because of the instructions they have been given by their employer who is paying them. If one disregarded that assumption of a 9.6 per cent annual increase in real terms in metal prices and in return from the ore one would come out with a very different figure indeed from the three figures which have been put up on behalf of Bula.

As I understand it, even Lazard Brothers who were advising the Minister, and Mergers and the Geological Survey had to accept this projected cash flow assumption anyway, and had to accept this assumed increase of 9½ per cent per annum in real terms in the return from the mine based on mineral metal prices. The way that Lazard, who obviously regarded this as very unrealistic, got over it was by introducing a very much higher flow discount factor and they finally came out, as we know, with a valuation of the entire undertaking of £7.5 million. The discount factors taken by those who were advising on behalf of Bula were, of course, very different and consequently produced a very different result. If some average discount factor had been taken but if those doing the valuation did not have to assume for purposes of valuation that it was going to be a 9½ per cent per annum increase in real terms in the return on the metals, then we would indeed have had very different results and we would not now be in the position of the taxpayer being asked to stump up £9.54 million for the 24 per cent interest in this company. But all the valuations had to be carried on on the totally artificial assumption that there was going to be this constant annual increase in real terms, not just cash terms, in the value of the output from the mine every year during its lifetime.

It is worth going back to see what the position has been in relation to the price of zinc in real terms since the beginning of this century. The situation is that if one starts at 1900 and comes up to 1976, in real terms the price is the same in 1976 as it was in 1900. There is published work to this effect which as far as I know is not disputed, that is the 76-year graph of zinc prices in Europe. There has been some increase in the years from 1964 to 1976 in real terms in the price of smeltered zinc in Europe. There are two prices in Europe for zinc. There is what is called the European production price, the one referred to here, and there is the London metal exchange price. The London metal exchange is a free market but it deals with only a very small quantity of zinc now in Europe by comparison with that which is dealt in under the European production price.

The European production price is arrived at by a cartel which has operated in its present form since about 1964. That cartel, like all cartels, fixes prices at levels which suit members of the cartel. It is worth noting that for the most part the freer price of zinc on the London metal exchange is generally below that of the price fixed by the cartel, called the European production price or levy. Apparently, the cartel has been less prominent in the past year or two than it was previously as a result of inquiries being made by the anti-trust division of the United States Justice Department into the operations of a somewhat similiar cartel in the North American zinc market and as a result of inquiries being made as to how the European cartel operates.

It may well be that, as a result of these pressures which are originating in the United States, the European cartel will become less significant than it has been over the past 12 years or so. If that happens it is fair to assume the likelihood is that the price will drop in actual terms and, if it drops in cash terms, it will drop very much in real terms. It would appear on that basis that the assumption which is glibly made, and has to be accepted by all the valuers whether they agree with it or not, that there will be a 9½ per cent increase annually in real terms in the value of zinc is certainly not one that could be validly made.

It would be my submission to this House that any valuations which have had to accept this assumption are of little value unless they discount it enormously as, for example, two of the Minister's advisers did, that is, Lazards and Mergers. It would be a more realistic valuation if they were able to approach it from the point of view that they did not have to assume there would be a 9½ per cent per annum increase in real terms in zinc prices, but that they could assume what they felt in their professional vision was the likely increase, if anything at all.

If one is to go on the history of the past 76 years in relation to the price of zinc, while there have been peaks at the time of the Korean war, and peaks again in the late sixties and early seventies, nonetheless the price in real terms is no greater today than it was in 1900. In fact, I think I am correct in saying the price in real terms is actually less today than it was in about 1951 or 1952 just before the ending of the Korean war. Therefore, it seems to me to be an assumption which has been forced on the valuers which has no validity and which should not have been forced on them. They would have been able to do a more realistic job if they had been able to project what they would consider the more likely movement in real terms in metal prices rather than the assumption which was made for them of an increase of 9½ per cent annually, which is exceptionally large when one remembers it is in real terms and with which, obviously from the wording they used in their report, Bechtel did not agree but which they were lumped with anyway when they tried to do some form of valuation.

I do not think any of us on this side of the House brought out this matter sufficiently when we were speaking on the various amendments to the section. This is the first time since the section was amended that we have gone back to discuss it as such. It is extremely relevant and extremely valid. It renders the value of the valuations which the Minister has been talking about very suspect indeed. I am not suggesting any of the firms are in any way suspect but they had forced on them this assumption and, whether they agreed with it or not, they had to calculate and work out the figure on that basis. Bechtel certainly appeared not to agree with it and made it clear that the figure they came to was arrived at in this way, based on this assumption, although they themselves quite obviously would not have made an assumption of that kind.

Lest some of the earlier matters we referred to might be overlooked, before I sit down I would again invite the Minister to avail of this opportunity to explain to the House why it is that half of the townland of Nevinstown— and this is very relevant to the whole question of valuation—in which there appear to be State minerals, or minerals potentially obtainable by the State, has not had any steps taken in regard to it, even though it would appear that some part of it at least will be mined by this company. This is one of the matters the Minister did not deal with adequately on the earlier stages. He should be asked to do so now. It is not enough for him to say that, although these minerals are only 50 or 100 yards from, or in some cases adjoining the Wright farm and all the minerals we know exist there, the indications are there are no minerals in the field next door to it. It is difficult to accept that. The experience on the other side of the river has been quite the opposite and land which is apparently some distance from the river and from the orebody south of the river has been shown to contain significant minerals. There is no reason to believe there is not a possibility at the very least that the same position obtains north of the river and until such time as there has been a thorough exploration for these other minerals, the State should take steps to safeguard our rights in regard to them.

Mr. Keating

First, I simply want to state that the projections, submissions and estimates made by companies other than Bechtel were not based on any such terms or assumptions as Deputy O'Malley states. I should like to say a little about the orebody and the value of lead and zinc, the questions raised. Deputy O'Malley is in the business of being wiser than the arbitrators on one side, on the negative side. I do not want to pose as being or to present myself as being wiser than the arbitrators. It is only fair for the sake of balance that we should put another set of arguments because there is another set of arguments.

Deputy O'Malley talked about the evolution of the price of zinc in relation to prices in general over the past 75 or 76 years of this century, I understood him to say. A point which has not been made previously about lead and zinc is the following. It is the question of the relative availability of metals from the point of view of mining. By and large, if you take things on average, a definition of inflation is that things inflate equally rapidly and one thing does not inflate faster than another. When you look at individual commodities that turns out to be untrue.

The price relativities between metals will certainly change very markedly over the next 50 years. We have talked about the past 75 years. I should like now to talk about the next 50 years, or even less, for a reason which will emerge in a moment. Geologists make measurements of things with something called the continual crustal abundance in different sorts of metals. As the rate of industrialisation increases, as the demand for metals increases, it becomes possible to make projections, on certain assumptions of course, as to what resources will run out first.

We must have seen that all sorts of agencies in the world, strategic agencies of some of the great powers and other concerned groups of conservationists at the other end have made these sorts of estimates. So have economists and businessmen and they are the proper stuff of ordinary economic projections at this time. When you make those measures, then you can draw up in regard to metals a thing which is called the dynamic resource life—it is called that, the life of the resource whether it is gold, bauxite, zinc or anything else. It is an index; it is dynamic in the sense that you have to make assumptions based on how frequently the materials occur in the earth crust and what sort of orebodies you will get and what sort of re-cycling you will have and many other considerations. When you do that you can make a dynamic resource life index for all the metals. It has been done and it is available to anybody who wants to look at it and it is relevant to this orebody when Deputy O'Malley says—and I quote him—that it is fair to assume that the price of zinc will fall in actual terms and therefore very sharply in real terms.

It is not so fair to assume for a reason that will appear in a moment and about which he ought to know if he is going to pontificate about valuation. The reason is that when you make that dynamic resource life index for all the metals, you find that for cobalt—it is expressed in years—that you have 685 years as the dynamic resource life of cobalt. Coming to something of which we need a great deal more, like iron, you have over 600 years. We need a lot of aluminium and we have 225 years of it on this index. Of course they are assumptions but they are the same for everybody. Those are the metals you find at the top of the dynamic resource life index and therefore if you want to argue that they will become dear slower than the average increase in the world for all prices, you can make that case because there is plenty of them. But in that index, about which we are being so knowing and pontifical, you find that the least time of all in the dynamic resource index for metals in the world, which is 40 years—and not the par 75—is for zinc. Anybody who knows anything about the future of resources should know that and if he does not he should not be pontifical about the valuations of expert——

Mr. O'Malley

Why did the Minister spend so long trying to upset the valuations they made?

An Ceann Comhairle

Order, let us hear the Minister out.

Mr. Keating

Change of subject. Confuse the issue when it becomes uncomfortable.

Mr. O'Malley

Why did the Minister spend a month trying to get——

An Ceann Comhairle

I have called for order.

Mr. Keating

There is reason to think—among others—that this will increase in price at least as rapidly as general prices—but, of course, as it is lowest in the dynamic resource life index there is every reason to think that it will increase faster than the average. It is a resource that may become very scarce in the very near future and that is why it is so important to keep as much national control over it as possible. It is not like iron or bauxite or cobalt of which there is plenty and on which there is no pressure; there is intense pressure on this resource.

Mr. O'Malley

There are plenty of substitutes for it, unfortunately.

Mr. Keating

So, we have an invented allocation of opinion to all the people who offered valuations, which is not factual. We have a statement that it is fair to assume that the price of zinc will fall in actual terms and therefore very sharply in real terms. We have that "fair" assumption which is not fair at all and which is malicious and tendentious.

Mr. O'Malley

We are getting very cross. There is no metal in the world which is more capable of being substituted for even at present than zinc. This is one of the worries one has about zinc and it is more vulnerable for that reason to changes in market trends than most others which are not capable of easy substitution by other materials. One of the metals that can be used for much of what zinc is used for at present is aluminium and various forms of plastic can also be used to fulfil functions of zinc at present. One has no guarantee that the demand for zinc will be at anything like the sort of level we would like to hope would exist in future, as it has existed in the past, because of the possibility in certain of its applications of relatively easy substitution for it.

The Minister does not, in fact, deny my statement that zinc today in real terms is the same price as it was in 1900. He seems, at least by default, to accept that the assumed figure which Bula gave to Bechtel of 9.5 per cent increase per annum in real terms is a valid one. If it is valid, as the Minister seems to argue, and 50 others did not, as the Minister now says, have to assume the same thing, why did they not? Why was it only because Bechtel had been told by Bula to assume this that that was correct? The Minister now says that the others were not told to assume the same thing although The Irish Times report says that they were and that was written by somebody who actually read the documents. Whoever wrote the article had a great advantage over me and everybody in the House except the Minister because we are mere Deputies trying to legislate in regard to this matter; we are not allowed to read these documents in case anything might turn up that might be more embarrassing for the Minister than many other things that have turned up today, and if he says so, one assumes he was right. Having been given the advantage by somebody who is a director of both Bula Ltd. and of The Irish Times Trust of seeing the documents, he practically misread them; the Minister tells us that is so. If that is so, the Minister is, in effect, saying that all the other valuers were wrong because they did not assume a 9.5 per cent increase in real terms which the Minister seems to think is a valid assumption in spite of all the historical evidence.

The historical evidence is the only evidence on which one can rely because anything about the future is necessarily speculative to some degree and the fact that the Minister feels that world supplies of zinc, presumably at the current rate of usage, would be exhausted if there are no further discoveries, in 40 years' time does mean a great deal if, in fact, the use of zinc lessens and its present use is substituted for by other metals or synthetic materials of one kind or another which are constantly being invented.

It is significant that the Minister has again declined to deal with the question of allowing the State half of the minerals in the townland of Nevinstown apparently to be acquired without consideration. His only excuse is that there appear to be no minerals there. If he would like to give me a present of them I would very gladly take them, rather than give a present of them to his friends in Bula Ltd. to whom he has already been very munificent.

Mr. Keating

There has been no such giving to anybody.

Mr. O'Malley

If there is a townland in half of which there is apparently an extraordinary rich orebody—according to the Minister—it would not be unreasonable to assume that there are at least some minerals in the other half of the same townland, particularly since there appear to be a lot of minerals on the other side of the river in whatever townland is south of the river. The existence of those minerals appears to extend for a very long way.

The other matter with which I should like the Minister to deal arising out of what we spoke about earlier, is the fact that the Midland Bank are now the registered owners through various nominees of 80 per cent of the shares in this company which the Minister is acquiring. The Minister said he would not give away any more of the agreement but today he told us it is a provision of the agreement that when the transfer comes to be made Bula Holdings will have to be registered in respect of 80 per cent of the shares and Patrick Wright, or his representatives, would have to be registered in respect of the other 20 per cent. When I pointed out that perhaps the Midland Bank might place some difficulty in the way of that being done and asked what would happen if they did, the Minister did not answer.

It seems remarkable that a transfer of 800,000 shares, 80 per cent of the company's stock, took place on the date of this agreement but it was only today that public documents, some of which should have been filed a year or two ago, became available and we became aware of this very significant development. We have had no explanation from the Minister for his concealment of this very relevant fact. If he concealed this fact we are entitled to ask how many more relevant facts were concealed, how many more facts that would cause this House to think again about the course on which we now seem bound? Do facts matter anymore? Is it simply a question of what the Whip says goes? If this House pass what is patently bad law, bad economics, bad commercial and financial arrangements, that does not matter; the main thing is to get them passed. If there is a possibility that the Constitution is infringed by a section such as this, that does not matter. The main thing is to get it passed and ignore the questions one wishes to ignore.

Obviously the Midland Bank, through their nominees, became registered as owners of the shares in order to further their own security for the money they loaned. They may feel it is in their interests to remain registered as owner of those shares. If they so decided they would be entitled to take that course of action to protect their lending and to strengthen their security, and there is nothing the Minister could do about it. His agreement was with Bula Limited. We have not been told at what time on the 12th December, 1975, these transfers were made in relation to the signing of the agreement. Why has all this been concealed from the Dáil and the public? It is possible, for all I know, that the transfer from Bula Holdings to the Midland Bank's subsidiary took place before the other agreement was signed with the Minister on the 12th December, 1975. Even if it took place afterwards, what is the good of an agreement with Bula Holdings when they do not own a single share, the four parties concerned do not have a single share nor do their company? It is Norofin Nominees Limited, a subsidiary of the Northern Bank Finance Corporation Limited, a subsidiary of the Northern Bank Limited, which in turn is a subsidiary of the Midland Bank, who have 800,000 shares. They are the people in the riding seat. They are the people who have ultimate control because they are registered as owners of 80 per cent of this company. This is the kind of company in which the Irish taxpayer is now being asked to take a minority interest, where he will have no say and no control whatever.

We must, inevitably, be coming near the end of this debate. It is not enough just to ask questions, you do not get any answers. Over the last five weeks we have shown how much was concealed. How much more was concealed that we were not able to get to the bottom of? What we have shown is enough to cause concern to thinking people. If they knew the other things we have not been able to unveil because of secrecy, how much deeper would that concern be? I ask the Minister these questions once again. It is repetitious to ask them but they need to be answered. Whether the Minister chooses to answer them or not is a matter of some significance and concern.

Mr. Colley

It is rather disturbing that there is no reply from the Minister to what we have just heard from Deputy O'Malley. It may be that we will have to come back to this again and again——

Mr. Keating

There has been a reply.

Mr. Colley

——and drag out this debate unnecessarily because of the deliberate secretiveness of the Minister. If he chooses to do that he need not blame us.

I want to advert to a matter of considerable importance which was raised before and to which we got a purported answer with which I, personally, am not satisfied. To keep it in perspective I want to point out that the control over the operations of this company which the Minister can exercise is the control of a minority shareholder. In practical terms that means virtually no control. The Minister, however, at an earlier stage in the debate said, I understand, that he had got control to ensure the carrying out of what he needed to see carried out in the development of the mine by way of personal guarantees given to him as to the completion and execution of the agreement referred to in the Bill.

Further questioning of this matter elicited the fact that article 11 of the articles of association of this company in effect provides that any guarantee given by directors would ensure that the company stood behind the directors and, in effect, took over the guarantee. The practical effect of this is that if the Minister were to try to enforce the guarantee referred to he would be trying to enforce it against himself to the extent of almost 50 per cent. The Minister said that article did not apply because these guarantees were given by the individuals concerned as beneficial owners and not as directors.

The information given by Deputy O'Malley today raises even further questions. Without going into that, could the Minister say how he knows who were the beneficial owners of shares in Bula Holdings? Presumably that is what he had in mind, although on the face of it that is irrelevant. The only thing that could be relevant would be the beneficial ownership of shares in Bula Limited. Whichever he had in mind, would he mind clarifying in what way article 11 of the articles of association does not apply to the guarantee and in what way he can rely on that guarantee to ensure that the development of the mine takes place as he would wish?

Mr. Keating

This matter has already been dealt with and is on the record.

Mr. Colley

But it has not been dealt with adequately.

Mr. Keating

Deputy Colley attributes to me words, without attribution, without quotation of the source, that I did not use. He says that truly, from his point of view, it has not been dealt with adequately. Nothing that I could say would deal with these matters adequately from the point of view of the Deputies opposite on issues that have been raised and reraised. If anyone wants fairly to go back over the record he will see that the matter has been settled and answered. People can go on saying that it has not been answered and "you have not answered my questions" until we are all black in the face. A perusal of the record on issue after issue will show that the answers have been given. If the answers are not sufficient it appears to me, as I said a moment ago, that however much I said it would not be sufficient. If people are determined not to be satisfied then nothing that I could say will satisfy them.

Mr. Colley

Which words does the Minister say I attributed to him wrongly?

Mr. Keating

I have not got the transcript of what the Deputy just said but he made attributions to me of matters of detail which I simply did not say.

Mr. Colley

Could the Minister mention one of them?

Mr. Keating

In the Deputy's intervention before my last one the tenure of the whole area of that attributed statements to me which I did not make.

Mr. Colley

I am speaking from recollection and I am subject to correction on this. The only words I recall attributing to the Minister on that occasion was when I said that he had said that the guarantees were given by the individuals concerned as beneficial owners of the shares. I think that is the phrase the Minister used. The important thing here, I suggest, is that the Minister will find if he looks at the record, that he has never explained how article 11 does not apply. It is true that he purported to explain it but the explanation that he gave does not correspond with the facts. That is why I am raising the question again. He said that article 11 did not apply because the guarantee was not given by those people as directors but as beneficial owners of the shares. I am asking the Minister, because he has not yet explained it, is he referring to the ownership of shares in Bula Holdings or is he referring to the ownership of shares in Bula Limited?

Mr. Keating

I refer the Deputy to the record and I refer him to what I said at the beginning of the debate today, that at the time of the completion of the contract for the share purchase by me the shareholders of Bula Limited, that is Bula Holdings and the estate of Mr. Wright, must be the owners of the entire share capital of Bula Limited.

Mr. Colley

I am afraid that does not answer the question I put. I am not saying that the Minister is doing this for evasive purposes. Perhaps he thinks it answers the question but there is a little more in it than that. I find, looking at the record of the debate in the House on the 22nd February last, that I did not misquote the Minister. He is reported in the Official Report at column 58, Vol. 297 for 22nd February, 1977 as saying:

With regard to the point the Deputy made about article 11 in relation to indemnity on Second Stage I said that the four people who had given a guarantee of the performance of the agreement gave that guarantee in their capacity as beneficiary owners of the shares——

I think the Minister said beneficial owners——

——and that guarantee does not relate to their position as directors of the trading company.

Does this statement the Minister made, which is referred to there, refer to ownership of shares in Bula Holdings or in Bula Limited?

Mr. Keating

It applies to Bula Holdings and their guarantee relates to the performance of Bula Holdings.

Mr. O'Malley

This is new.

Mr. Colley

There is a new perspective coming in here. I do not think the Minister really means what he says.

Mr. O'Malley

There will be some wonderful complications if what the Minister said is right.

Mr. Keating

Would Deputy Colley repeat his point for me?

Mr. Colley

I will not give the quotation again. The Minister said that the persons who gave the guarantee gave it in their capacity as beneficial owners of the shares. My question is does that refer to beneficial ownership of the shares in Bula Limited or in Bula Holdings?

Mr. Keating

I understand it to apply to both companies. One are shareholders in the other.

Mr. Colley

We will take it in relation to Bula Limited, first of all. As I understand it, and as seems to be suggested by section 1 of the Bill, none of the persons concerned holds any shares in Bula Limited and did not at the time of the giving of the guarantee hold any shares in Bula Limited. Is that not correct?

Mr. Keating

We are talking about an agreement which has not yet come into force. We are talking about a contract between the company and the Minister on a certain date. I said that at the time of completion the shareholders of Bula Limited, that is Bula Holdings and the estate of Mr. Wright, must be the owners of the entire share capital of Bula Limited.

Mr. Colley

Perhaps I am not making the point quite clear to the Minister. I am not going into the question of what he is saying, that this is to be the position when the agreement is being executed, a very unusual provision. I am saying that assuming that happened, will the position not then be that the shareholding in Bula Limited will be in the possession of Bula Holdings and the estate of Patrick Wright and that it will not be in the possession of the individuals giving the guarantee? Does the Minister follow my point that if you leave the Wright estate aside the other shares will be held by Bula Holdings and not by the individual giving the guarantee? Is that not correct?

Attorney General (Mr. Costello)

As I understand the Deputy's concern it is that this particular guarantee, to which reference has been made, is of little value because of the provisions of article 11. His argument is based on various grounds. One of them is that the persons who gave the guarantee were shareholders, were directors, and consequently article 11 will mean that this guarantee is of little value. He appears, alternatively, to be asking whether or not this is of any value because they are not shareholders. All I can say is that we discussed this already at some considerable length on this section last week. The situation is that it would be a matter entirely for the drafting of a condition, and the signing of the condition relating to a guarantee for the Minister, to ensure that the guarantee is of some value.

Mr. Colley

Is the Attorney General referring to the drafting which has already taken place?

Mr. Costello

Yes. Obviously it would be a matter for the draftsman to ensure that when people enter into covenants with the Minister those covenants are of some value. It is wrong to assume that the drafting of this contract meant that the Minister was not getting a proper guarantee in relation to matters covered by the covenants. This is a problem we have had throughout this debate. The Opposition are raising questions in relation to the document they have not seen.

Mr. O'Malley

That is not our fault.

Mr. Costello

We have been through this already for several weeks. We understand that the Opposition have some objections to this. The problem arises because of the fact that the Deputies opposite are asking questions in relation to the covenants entered into by these individuals. I am saying in answer to this that the Deputies have not seen the covenants for reasons that have already been given. It is proper for me to say that it would be elementary drafting to ensure that the covenants would not do what the Deputies opposite fear, namely, be of little value to the Minister because the persons would be able to get an indemnity from the company. It would be wrong to assume that this has happened. We have been over this many times already. The situation has been explained to the Deputies opposite. It has been explained that the sort of fears they are raising are not real ones. The documents have been properly drafted and the matter cannot be put any further.

Mr. Colley

I am sorry. I just did not find the explanation given by the Attorney General on previous occasions very satisfactory and I still do not find it satisfactory. What he is asking us to assume is that the draftsman has succeeded in framing something that will bind four people who on the face of it are not parties to this agreement at all, who are not shareholders in this company and who now are not directors of the company. The draftsman on occasions is quite ingenious but he would want to be extremely ingenious to succeed in drafting something that would bind people like that. One might as well say that he can bind four people outside who have no connection with this at all. Legally these individuals have no connection. They may be shareholders in Bula Holdings. We do not know. Presumably the Attorney General does not know either because it is not information to which he is officially entitled.

How does one bind four people who legally have no connection with this so that they guarantee—and the guarantee can be enforced—that this agreement will be carried out? Perhaps I am attaching more importance to this guarantee than it deserves but, if I am, then the Minister's position is even weaker than it should be. I am assuming that the guarantee is such that if the Minister finds that the development of the mine is not going ahead, or is not going ahead at the kind of pace he would like to see, he can then enforce this guarantee to ensure that it does go ahead at a satisfactory rate. If that is attributing more to the guarantee than should be attributed to it, the question then arises as to how the Minister can ensure that he gets any return on the money being invested. Assuming that the way he can control that is the guarantee, then the guarantee is crucial and it is not enough for the Attorney General to ask us to accept on faith that the draftsman has succeeded in finding a formula which will bind four people who have no legal connection with this company. We are entitled to ask precisely how this is being done.

It cannot seriously be argued that the commercial interests of any of the people concerned could be in any way endangered by the disclosure of the precise terms which are relevant to this point in the guarantee. For that reason I am asking now that those terms by which the Attorney General says and the Minister says that these individuals are bound and are not getting an indemnity under article 11 be put before the House. It is inconceivable that the disclosure of those terms could in any way damage the commercial interests of Bula Limited or of the individuals concerned or the Minister. The matter is of such crucial importance that I suggest it is not only a reasonable request but it is imperative that we on this side of the House ask for the disclosure of these precise terms.

Mr. Costello

Briefly, I repeat what I have said. The Minister has explained why the terms of the agreement which would include these covenants have not been made public. The reasons have been made clear and obviously they are not accepted by the Deputies opposite. I can only say that Deputy Colley from his experience both as Minister and in private practice must be well aware that it is perfectly normal to have individual covenants in commercial agreements relating to the purchase of shares. There is no great mystery involved in the drafting of covenants. There is no great legal expertise necessary to ensure that the individual covenanters are bound effectively by the terms. I can only repeat that there has been reference made in this House to the existence of these covenants. They exist. They have not been made public for the reasons already given, and I can assure the House that the legal position is being adequately catered for.

Mr. Colley

It has emerged in another context, in the research done by Deputy O'Malley, that there are now two agreements between Bula Limited and Haras el Chorro, SA. Since the Minister and the Attorney General have referred to an agreement, may we take it that there is one and only one agreement between the Minister and the parties mentioned in section 1 and that the one agreement contains the covenants referred to by the Attorney General which purport to bind four individuals who on the face of it have no legal connection with Bula Limited?

Mr. Costello

We are dealing with the agreement referred to in the definition section and that is the agreement to which I have been referring.

Mr. Colley

I do not know why we cannot get a straight answer to a straight question. Is there one and only one agreement between the Minister and Bula Holdings Limited and the parties mentioned in section 1?

Mr. Keating

If it will add to what the Attorney General has said, yes, there is one such agreement.

Mr. Colley

And only one?

Mr. Keating

Yes.

Mr. Colley

We may take it then that it is that agreement that contains the covenants the Attorney General is relying on to bind the individuals concerned.

Mr. Costello

Is that not perfectly normal?

Mr. Colley

Which is?

Mr. Costello

To have a covenant in the one agreement.

Mr. Colley

Yes.

Mr. Costello

Is that not the Deputy's experience?

Mr. Colley

Yes it is, but it is also my experience that, if one company is selling land to another, they have only one agreement, but it turns out that Bula Limited and Haras el Chorro, SA, have at least two agreements for the sale of land, neither of which has resulted in the registration of the purchaser as the owner in the Land Registry so we have to question what is going on here because there is such total concealment, such reliance on words which are carefully prepared in advance to convey one impression and which, when passed and analysed, convey in fact another impression. That is why the questions have to be asked.

We have had a point blank refusal by the Minister and the Attorney General to give us the details of the covenants by which they say these people are bound. We know that the original explanation given as to how the Minister was going to force his guarantee turned out to be wrong factually. I, for one, am not satisfied that the Government, as represented by the Minister and the Attorney General, should decide that they will not disclose even that basic detail of this agreement, fundamental to the whole spending of this kind of money in the hope of return. They have refused to disclose that fundamental detail although nobody has attempted to suggest that the disclosure of that information could in any way damage anybody's interests. It is, of course, consistent with the attitude which has been adopted all along in this matter, except on those occasions on which there have been inconsistencies when it suited the Minister to disclose some details of this agreement.

Mr. O'Malley

Selectively.

Mr. Colley

Very selectively. The fact he chose to disclose some details where he thought it would suit him is sufficient to discredit the whole argument he has put forward for the non-disclosure of the terms of this agreement. But, whatever argument may be put forward for it, no such argument can justify the non-disclosure and the complete failure by the Government to take this House and the public into its confidence to ensure and make it absolutely certain and clear that the persons purporting to guarantee the performance of this agreement are in fact bound. The other matters which have come to light from time to time in this whole affair, primarily as a result of the diligence of Deputy O'Malley, make any reasonable person approaching this matter suspicious of what we are being told and of what we are not being told, suspicious of what is being concealed and why it is being concealed.

Mr. O'Malley

We have yet another of the usual silences, which the record is unable to accommodate. I rise to support Deputy Colley in what he has just said. He asks that we should see the covenant relating to the guarantee by these four directors. We are asking for that on its own. I am not saying we are not renewing our reasonable demand that we should not be asked to legislate in a vacuum. We are asking for that anyway because patently, as Deputy Colley has shown, it cannot affect anybody's commercial interests. That has not been denied. It cannot and will not so affect and still we do not get it.

One wonders if the guarantee is what we think it is, so useless that the Minister is ashamed to produce it, and it is useless for the reasons we have already enunciated. Where the Minister attempted to reply to my reasons, and where he factually was wrong in what he said, although he did not realise it at the time—at least, I presume he did not—one is aware that, because of the covenants in this agreement, which are grossly unfavourable to the taxpayer, the Minister should seek to hide that fact, even in the face of five weeks' requests for it, and by continuing to hide it and conceal these facts take the risk, and a definite risk it is, that this Bill when finally passed will be declared unconstitutional. It shows one just how unfavourable to the taxpayer some of the provisions in this agreement must be and how well the four guarantors did out of it. They codded the Minister into paying them this vast amount of money and still enabled them to retain control.

There are other covenants I understand in the agreement that the Minister may well hope will not see the light of day—covenants like the rather strange one he made that he would not go out of his way to try to ensure there would be joint promotion of this ore mine or try to bring that about in any way, and the other covenant he made that he would use his best endeavours to get the Government to apply for and guarantee a loan from the European Investment Bank of some £10 million or £12 million in respect of which a memorandum went to the Government, but not with any great enthusiasm, some time ago. These are the sort of areas in which the taxpayer is being taken for a further ride on top of what he already knows.

I suppose it is understandable the Minister should seek to decline to tell the whole sorry truth because sorry, indeed, it is. I shall keep some of the remaining covenants for the later stages but I believe the general interest would be served by publishing this agreement now and not carrying on this concealment of material facts any longer. The questions and the nature of the questions now being asked in relation to this affair are increasing in number and deepening in nature. Some people are beginning to wonder if this whole affair is in some way bound up with the event which will take place some time later this year. The two are not unconnected in certain ways.

When I spoke some 20 minutes or half an hour ago I made inquiries from the Minister on a number of points but I did not get any reply. I do not suppose it is worth repeating them but, before we leave the section, I think it is contemptible that on the very date of this agreement referred to in this section, a section which is the kernel of this debate, 800,000 shares should have been transferred to a subsidiary company of the Midland Bank in Britain and this House allowed to debate this matter here for five weeks without being told that very material fact. We now discover, as a result of what limited amount the Minister did say about this today that, even if this Bill were passed, if the Midland Bank will not play ball and transfer back the shares to the people who had them originally, then the operation cannot go through.

The Midland Bank may feel that the amounts it has lent are such, and its need for security is such, that it will have to retain these shares. If it is so decided, and it would be within its rights in so deciding if the facts of the lendings bore that out, then there is nothing the Minister could do even if this Bill was passed. This may be the reason why all the urgency has gone out of the Bill. At one time it had to be through both Houses, and signed by the President, by 9th February. But today, there is no worry. Apparently there is an interest clause in the agreement for non-payment but the Attorney General has advised the Minister that because there is a delay in the Dáil debate the interest will not become payable. I hope the Attorney General is right because the interest could amount to a considerable sum of money.

We are left in the situation that the public cannot fail to speculate about the interest of the Midland Bank in this situation and the fact that, if the shares are not transferred out of the name of the Midland Bank's subsidiary, they are the people who have the ultimate control. It is they who sign and seal the share transfers. It is they who call meetings and vote at them. They are the people who are entitled to exercise the shareholders' rights because they are registered as shareholders as part of their security for the money that is due to them. We have not had any explanation as to how a third bank has come in with a debenture. The Ulster Bank is now in. The Bank of Ireland is in and the Northern Bank is also in in two capacities, one as a shareholder and the other as a debenture holder.

The file of this company is getting a little crowded with charges and mortgages. I presume they have sorted them out between themselves but I would hate to try and hazard a guess as to who has priority over whom because they all seem to have mortgages on the same thing. They all have a cut out of poor Haras el Chorro SA and the various other folios associated with that. All these questions remain unanswered. The Minister's silence is partly due to ignorance but is also due partly to deliberate concealment. Having watched him operate for five weeks I have come to the conclusion that only half of it is due to his ignorance of what has happened in this whole affair. The other half is due to the knowledge that what has happened should not see the light of day.

This is the man who has so concerned himself and so used up his energies over the last four years trying to buy this minority holding in a small private company with no control and no say and covenanting away some of the control he would have as Minister for Industry and Commerce. We must bear in mind the fact that this orebody is not yet in production, that we have no arrangements made for a smelter, that we have no arrangements made for any downstream industries and that there is virtually no value going to come from this orebody to the community when it gets into production, except the jobs that will be given to the men involved in mining and extracting concentrates from it at the pithead. The whole lot will be carted away to England or Europe where the real employment will be given and the real benefits will accrue to the detriment of our people who are supposed to commend this former socialist Minister for his astuteness in buying us into 24 per cent of a private limited company. For the first few weeks of this debate I do not believe the Minister understood the significance of that kind of holding in a private limited company but I hope that by now it has been explained to him.

This paltry reward for a large amount of money in a highly speculative venture is one that may well be regretted before this whole affair is over. I repeat my ritual request that some of my questions be answered but I have no confidence or hope that they will.

Mr. Crowley

As a person who is involved in drawing up sales contracts and selling land and other property, I am astonished at the attitude of some of our Government representatives today in that they do not seem to appreciate the fact that in almost every deal where land is involved the whole aim is to have it registered as soon as possible in the name of the new owner. In my ten years as an auctioneer I have never heard of a case where this type of delay has occurred. It is an extraordinary deal from every point of view. When one has a company stating that they are basing their valuation on figures supplied by the company that employed them to do a valuation the whole deal becomes fraught with the deepest suspicion. I wonder about this new marriage that is going on between the Minister and his capitalist friends in Bula. Has that not a deeper significance than a lot of us imagine at present? Deputy O'Malley was very charitable to the Minister when he said that he showed 50 per cent ignorance in relation to this deal.

An Leas-Cheann Comhairle

The Chair would like to remind Deputies that it is disorderly to reflect on the intelligence of Members of the House.

Mr. Crowley

I must bow to the ruling of the Chair. If I had the investing of £9.54 million for anybody I would not get myself involved in this type of deal. I am convinced that there is far more to this than meets the eye and the Minister's reluctance to answer ordinary questions breeds in me a suspicion that things are not what they seem. I cannot understand how the Minister could enter into a contract with a company that sold all its shares on the day this contract was entered into. Who did the Minister enter into contract with? From whom can the taxpayer recoup any of the investment if things go wrong? I cannot understand how the Minister agreed to this investment of the taxpayers' money in an operation that has not yet obtained planning permission. I cannot understand any sane businessman investing this amount of money in an operation without the costings of that operation being calculated.

When I refer to the costings I mean whether we will have opencast or underground mining because the value of the product from those operations can vary enormously. As a businessman if I enter into a contract with somebody I will try to ensure as far as possible that I have the maximum protection for my investment. What protection has this Minister got for the investment of the taxpayers' money? In my opinion he has got none.

As an ordinary person from the country I become highly suspicious when I see that a company have to operate from a tax haven such as Panama in order to carry on business. I say to a company that does that, more luck to them. They are out to get away with as much tax as they can, but the Minister who is the guardian of the taxpayers' money on this occasion should do anything except enter into an agreement with such a foreign-based company. I have always credited him with being a very intelligent man and I cannot understand how he put his signature to this type of disastrous contract so far as the State is concerned.

In the light of what has been revealed in the past few weeks I can understand why the Minister is not willing to make this agreement public because it will show him in a very poor light. In the normal way the man in the street is not too interested in dealings in shares and so on but he has become deeply interested in this matter. In the past two weeks I attended a seminar in Cork and I was asked questions about this agreement between the Minister and Bula. The people are very concerned and, because of this concern, the Minister should give far more information than he has done. Because of the presence of Deputy O'Malley in this House and because of his thorough research into this entire operation, thus exposing the inadequacy of the Minister's knowledge, most of the people have become aware of the disastrous agreement the Minister has walked us into.

I want the Minister to tell the House why he did not take the ordinary precautions that any businessman would take. Is it because the money was not his own and, therefore, that he did not give a damn? Was he conned or was there something else not unconnected with a general election this year? The Minister should not treat the House in such a disdainful way. He should tell us why he took some of the actions he did take and he should try to justify them.

It is all very well for the Minister to tell us he has answered our questions. It is rather like the young boy going into an examination where he is given various sums in arithmetic and he writes down under each sum "don't know". He can come out of that examination and say he answered all the questions and that is what the Minister is doing. He is answering all the questions with "don't know" or "don't care". As a representative of people who do not fall for the socialist clichés the Minister was mouthing some years ago, I must ask him to explain what kind of socialism allowed him to enter into an agreement such as this one. The people of Ireland are entitled to know and we will keep probing until we get satisfactory answers. If we do not get satisfactory answers we can draw our own conclusions and I hesitate to tell the Minister what are those conclusions.

I would ask him to treat this House as a responsible assembly and to recognise that the Members are very concerned about the way this entire affair has been handled. I am asking the Minister to tell us what steps he will take to ensure that the £9.54 million of taxpayer's money does not go down the drain. I want an answer to those questions. May we take it the answer is "don't know" or "don't care"?

Question put.

The Committee divided: Tá, 61; Níl, 51.

Tá

• Barry, Peter
• Barry, Richard.
• Begley, Michael.
• Belton, Luke.
• Bermingham, Joseph.
• Bruton, John.
• Burke, Joan T.
• Burke, Liam.
• Byrne, Hugh.
• Clinton, Mark A.
• Cluskey, Frank.
• Collins, Edward.
• Conlan, John F.
• Coogan, Fintan.
• 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.
• Keating, Justin.
• Kenny, Enda.
• Kyne, Thomas A.
• Lynch, Gerard.
• McLaughlin, Joseph.
• Cooney, Patrick M.
• Corish, Brendan.
• Cosgrave, Liam.
• Costello, Declan.
• Coughlan, Stephen.
• Crotty, Kieran.
• Cruise-O'Brien, Conor.
• Desmond, Barry.
• Desmond, Eileen.
• Dockrell, Henry P.
• Dockrell, Maurice.
• Donnellan, John.
• Dunne, Thomas.
• Enright, Thomas.
• Malone, Patrick.
• Murphy, Michael P.
• O'Brien, Fergus.
• O'Connell, John.
• O'Donnell, Tom.
• O'Leary, Michael.
• Pattison, Seamus.
• Reynolds, Patrick J.
• Ryan, John J.
• Spring, Dan.
• Staunton, Myles.
• Taylor, Frank.
• Timmins, Godfrey.
• Toal, Brendan.
• Tully, James.
• White, James.

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.
• Carter, Frank.
• Colley, George.
• Collins, Gerard.
• Connolly, Gerard.
• Crinion, Brendan.
• Cronin, Jerry.
• Crowley, Flor.
• Daly, Brendan.
• Davern, Noel.
• de Valera, Vivion.
• Dowling, Joe.
• Fahey, Jackie.
• Farrell, Joseph.
• Faulkner, Pádraig.
• Fitzgerald, Gene.
• Fitzpatrick, Tom (Dublin Central).
• Gallagher, Denis.
• Geoghegan-Quinn, Máire.
• Gogan, Richard P.
• Haughey, Charles.
• Healy, Augustine A.
• Hussey, Thomas.
• Kitt, Michael P.
• Lalor, Patrick J.
• Leonard, James.
• McEllistrim, Thomas.
• MacSharry, Ray.
• Meaney, Tom.
• Molloy, Robert.
• Moore, Seán.
• Murphy, Ciarán.
• Noonan, Michael.
• O'Malley, Desmond.
• Power, Patrick.
• Smith, Patrick.
• Timmons, Eugene.
• Tunney, Jim.
• Walsh, Seán.
• Wilson, John P.
• Wyse, Pearse.

Tellers: Tá, Deputies Begley and B. Desmond; Níl, Deputies Lalor and Browne.

Question declared carried.

TITLE.

Question proposed: "That the Title be the Title to the Bill."

Mr. O'Malley

The proposal is to authorise the Minister for Industry and Commerce to acquire shares in Bula Limited. Right through the debate we were given to believe that he was acquiring these shares from Bula Holdings Limited and the Wright estate and that certain guarantees would be given by other parties. It transpires now that Norofin Nominees own 80 per cent of the shares and have owned them since the date of the agreement. As I have said, Norofin Nominees are a subsidiary of the various subsidiaries of the Midland Bank and, ultimately, are owned by the Midland Bank. I should like the Minister to explain how he proposes to acquire shares from the Midland Bank in Britain and also why we were not told that the Midland Bank were registered as owners of these shares since the date of the agreement that is recited here?

Mr. Keating

Earlier when the Deputy raised this point I indicated that at closure the matter is between the parties to the agreement, that these parties are as indicated and that there is no question of the Northern Bank being involved in the closure.

Mr. O'Malley

The Northern Bank are the registered owners of 80 per cent of the shares. Without their co-operation and, ultimately, the co-operation of the Midland Bank, how can the closure be effected? When I asked that question earlier the Minister said he did not know what would happen in the event of the bank not cooperating.

Mr. Keating

With reference to the order of business of March 1st, and to column 509 of the Official Report for that day, am I right in thinking that the Title has been agreed?

Mr. O'Malley

The Title cannot be agreed to until all the sections are passed.

An Ceann Comhairle

The Title is as I put it now. This is the stage at which we decide on whether it is to be agreed.

Mr. O'Malley

It might be noted that even on the Title the Minister seeks to avoid answering questions. He has given no satisfactory explanation as to what will happen in relation to the Midland Bank should they decide in the interests of their own security not to transfer these shares to the Minister. He tells us simply that the shares would go back to the original owners who would transfer them. If, say, the Midland Bank because they are owed too much money —the reason for their taking the shares in the first place—do not agree to transfer them, what will the Minister do?

The other question I asked and to which the Minister did not reply was why he did not disclose, until I disclosed it today, that on the very day the agreement was signed, 12th December, 1975, 800,000 of these shares, representing 80 per cent of the entire share capital was transferred to the Midland Bank? The effective control of Bula Limited is now outside the State and is in the hands of one of the large British clearing banks. Why was that not disclosed? It is a very relevant fact and the failure to disclose it misled the House.

Mr. Keating

I can only reiterate what has been said twice already. It is absolutely clear that at the time of the completion of the contract for the share purchase by me, the shareholders of Bula Limited, that is, Bula Holdings and the estate of Mr. Wright, must be the owners of the entire share capital of Bula Limited.

Mr. O'Malley

And if they are not, the matter cannot be completed.

Mr. Colley

The Minister has made this assertion a number of times. What is his authority for this? Is there provision for it in the agreement?

An Ceann Comhairle

I have been lenient up to now in respect of the Deputy's comments but I must point out that only the wording of the Title can arise here. We cannot discuss now sections that have been passed.

Mr. Colley

I appreciate that but, as Deputy O'Malley has pointed out, the Title provides for the Minister for Industry and Commerce to acquire shares in Bula Limited and to provide for matters connected therewith and consequential thereto.

The effective control of Bula Limited, it appears now, is vested in people other than those disclosed to the House by the Minister. If, as the Minister says, this deal can be closed only when the shares are registered in the names of the parties he mentioned, we are entitled to ask whether there is any point in passing this Bill and whether the Title represents accurately the transaction as outlined now by the Minister. At the time of the signing of the agreement was the Minister aware that this transfer was about to take place?

Mr. Keating

I have dealt extensively with the question raised.

Mr. Colley

That is not so. The Minister was not asked this question before.

Mr. O'Malley

Was the Minister aware when signing the agreement that 800,000 of the shares were to be transferred that same day to the Midland Bank?

An Ceann Comhairle

I fail to see the relevance of this.

Mr. O'Malley

In order to keep the Title relevant to the facts as we know them now, I propose on Report Stage to insert an amendment to the effect that after the words "to acquire shares in Bula Limited" to add the words "from the Midland Bank Limited" because unless they co-operate we are in an impossible situation. The Minister has said that, unless the original party, Bula Holdings, can be put back on the register, the deal cannot be completed. That may as well be the explanation why there is no urgency in this matter. Presumably they cannot get back on the register. The Midland Bank are a very reputable bank. They are a very large international financial concern, having worldwide interests. It is nonetheless a pity that in relation to a section of minerals at Navan the Irish Government should be locked into a minority situation—not to four Irish businessmen who were quick off the mark when somebody else found the minerals, but to an enormous British financial institution.

An Ceann Comhairle

Is the Title agreed? Will I put the question?

Mr. O'Malley

The Ceann Comhairle has no option but to put it in the light of the refusal of the Minister to answer the questions he has been asked in relation to it.

Question put.

The Committee divided: Tá, 61; Níl, 50.

Tá

• Barry, Peter.
• Barry, Richard.
• Begley, Michael.
• Belton, Luke.
• Bermingham, Joseph.
• Bruton, John.
• Burke, Joan T.
• Burke, Liam.
• Byrne, Hugh.
• Clinton, Mark A.
• Cluskey, Frank.
• Collins, Edward.
• Conlan, John F.
• Coogan, Fintan.
• Cooney, Patrick M.
• Corish, Brendan.
• Cosgrave, Liam.
• Costello, Declan.
• Coughlan, Stephen.
• Crotty, Kieran.
• Cruise-O'Brien, Conor.
• Desmond, Barry.
• Desmond, Eileen.
• Dockrell, Henry P.
• Dockrell, Maurice.
• Donnellan, John.
• Dunne, Thomas.
• Enright, Thomas.
• Esmonde, John G.
• Finn, Martin.
• Fitzpatrick, Tom (Cavan).
• Flanagan, Oliver J.
• Gilhawley, Eugene.
• Governey, Desmond.
• Griffin, Brendan.
• Halligan, Brendan.
• Harte, Patrick D.
• Hegarty, Patrick.
• Hogan O'Higgins, Brigid.
• Jones, Denis F.
• Keating, Justin.
• Kenny, Enda.
• Kyne, Thomas A.
• Lynch, Gerard.
• McLaughlin, Joseph.
• Malone, Patrick.
• Murphy, Michael P.
• O'Brien, Fergus.
• O'Connell, John.
• O'Donnell, Tom.
• O'Leary, Michael.
• Pattison, Seamus.
• Reynolds, Patrick J.
• Ryan, John J.
• Spring, Dan.
• Staunton, Myles.
• Taylor, Frank.
• Timmins, Godfrey.
• Toal, Brendan.
• Tully, James.
• White, James.

Níl

• Andrews, David.
• Barrett, Sylvester.
• Brady, Philip A.
• Brennan, Joseph.
• Breslin, Cormac.
• Briscoe, Ben.
• Brosnan, Seán.
• Browne, Seán.
• Brugha, Ruairí.
• Burke, Raphael P.
• Dowling, Joe.
• Fahey, Jackie.
• Farrell, Joseph.
• Faulkner, Pádraig.
• Fitzgerald, Gene.
• Fitzpatrick, Tom (Dublin Central).
• Gallagher, Denis.
• Geoghegan-Quinn, Máire.
• Gogan, Richard P.
• Haughey, Charles.
• Healy, Augustine A.
• Hussey, Thomas.
• Kitt, Michael P.
• Lalor, Patrick J.
• Leonard, James.
• Callanan, John.
• Carter, Frank.
• Colley, George.
• Collins, Gerard.
• Connolly, Gerard.
• Cronin, Jerry.
• Crowley, Flor.
• Daly, Brendan.
• Davern, Noel.
• de Valera, Vivion.
• McEllistrim, Thomas.
• MacSharry, Ray.
• Meaney, Tom.
• Molloy, Robert.
• Moore, Seán.
• Murphy, Ciarán.
• Noonan, Michael.
• O'Malley, Desmond.
• Power, Patrick.
• Smith, Patrick.
• Timmons, Eugene.
• Tunney, Jim.
• Walsh, Seán.
• Wilson, John P.
• Wyse, Pearse.

Tellers: Tá, Deputies Begley and B. Desmond; Níl, Deputies Lalor and Browne.

Question declared carried.

Mr. O'Malley

Has the date for the Report Stage been fixed?

An Ceann Comhairle

No, we have already encroached on Private Members' Time. The decision on the Report Stage of this Bill will have to wait until tomorrow.