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?