Vol. 434 No. 4
32 Mr. Molloy asked the Minister for Finance if he will make a statement on the up-to-date position on the investigation by the International Stock Exchange of the UK and Republic of Ireland Limited into the conduct of Davy Stockbrokers in relation to the sale of the State's residual share of Greencore plc.
56 Mr. Cox asked the Minister for Finance the consideration that has been given by the Government to the report of the Attorney General on the placing of Davy Stockbrokers of the State's residual share of Greencore plc; and the follow-up action, if any, that has taken place as a result of the report.
64 Mr. Rabbitte asked the Minister for Finance if he has received the report of the Stock Exchange into the handling of the sale of Greencore shares; if he has sought any explanation as to the delay in completing the report which was promised within a matter of weeks in May 1993; and if he will make a statement on the matter.
I propose to take Questions Nos. 32, 56 and 64 together.
I should explain at the outset that the Irish Stock Exchange is part of a wider entity know as the International Stock Exchange of the United Kingdom and the Republic of Ireland Limited.
The investigation into the Greencore placing has, as a result, involved both the Dublin and London Stock Exchanges. The Irish Stock Exchange announced on 6 May 1993 that it had commenced an investigation into the circumstances surrounding the placing of the Government stake in Greencore plc. This particular investigation was carried out by staff of the surveillance division of the International Stock Exchange of the United Kingdom and the Republic of Ireland Limited and staff of the Irish Stock Exchange. In accordance with Stock Exchange rules, a report on this investigation was, I understand, considered by the committee of the Irish Stock Exchange on 2 July last and this was then submitted for consideration by the Professional Standards Panel in London which is the next stage in the process. It is the function of the Professional Standards Panel to determine whether or not, on the basis of the facts disclosed by investigations and subject to the availability of sufficient evidence, the bringing of charges under disciplinary rules is appropriate to uphold proper professional standards. The report was not made available to me.
The procedures to be followed by the Professional Standards Panel and related bodies of the Stock Exchange are laid down in Stock Exchange rules. Under these rules, the proceedings of the panel and other Stock Exchange bodies in disciplinary matters are confidential and are not disclosable by the Exchange unless and until a decision is taken to censure, suspend or expel a member firm or the firm consents to disclosure. I understand that this is to avoid prejudicing the position of a party under investigation.
As to the length of time which the investigation has taken, I would emphasise that the decision to carry out the investigation was made independently by the Stock Exchange. It would not be appropriate, nor is it open to me, to question the duration of the investigation. As I have indicated, a report was in the hands of the Irish Stock Exchange less than two months after it was initiated. The decision on whether or not to take any further step is entirely a matter for the Stock Exchange.
The separate investigation by the Attorney General was conducted by him, in his capacity as legal adviser to the Government, to review the factual circumstances of the placing from a legal point of view and to advise me. The Attorney General has furnished me with his report and advice. Such advice is confidential of its very nature and I do not wish to prejudice the ongoing Stock Exchange investigation by making any comment on matters touching upon the Attorney General's advice.
In conclusion, I would remind the Deputies that the Exchequer suffered no loss whatsoever in the placing and that the full proceeds of £69,872,460, based on the sale of all 25.4 million shares at 275p per share, were lodged with the Exchequer on 17 May. In addition, fees amounting to £725,000 in connection with the placing were waived by Davy Stockbrokers.
Will the Minister clarify a number of issues? He has already responded to questions in this House on the matter. He has told us that having received this report he intends to present its key findings to Government.
Were policy recommendations outlined in this report or did the Government arrive at any decisions? If so, what are they? The Dáil was clearly led to believe the matter would be presented to Government and that, presumably, some action would be taken. Will the Minister say what action was taken? In relation to the International Stock Exchange the Minister said the report has not been made available to him and that it is confidential while the due process takes place. Does the Minister intend to ask for the report to be made available and has he any indication as to when the process will reach its ultimate conclusion?
The Attorney General report which was prepared at the request of the Government results from an inquiry into the legal handling of the placing of shares on the day in question. There are no recommendations in that report but the required action was taken by the Department. I originally thought we would receive a report from the Stock Exchange but that would involve a long international procedure involving three bodies: the surveillance division to which I referred in my reply, the professional standards and the disciplinary committee. All stages must go through due process before a matter is publicised. The Stock Exchange indicated that if a firm is censured, suspended or expelled, with or without a fine, publication is mandatory. It there is a lesser fine the matter does not necessarily have to be made public except at the request of the firm concerned who may wish the proceedings to be made public. If the board of the Stock Exchange considers it necessary to warn members of some matter this procedure would not apply because everyone would know who is under investigation. In the normal way a finding might be issued regarding practice without mentioning names.
There was much comment during the summer that the investigation was not continuing. On the contrary, the investigation continued throughout the summer and my officials and others were questioned at length by the Stock Exchange surveillance division. It examined the data and questioned everybody involved and I am sure it has done the same with the other partners concerned.
Is the Minister aware that a report was dispatched to a journalist who writes for a Sunday newspaper which, conveniently and unsurprisingly, absolves the Department of Finance from blame in this affair but suggests that the brokers concerned may have broken a number of Stock Exchange rules and may have been guilty of breach of confidence and trust in the dealings of the Minister? Will the Minister comment on that matter? Will he say whether, when the official Stock Exchange inquiry is complete, the report of the Attorney General will be published and made available to the Members of this House?
There was much comment and speculation regarding this matter during the summer months. I read many articles on the matter, none of which fully reflects the contents of the Attorney General's report, the only report I have seen on the matter. The report contains the legal advice of the Attorney General to Government, and normally, such advice is not made public. It will be a matter for the Government to decide whether to publish the report when the inquiry is finalised.
Is it not unsatisfactory that five months after this affair the House is still unable on the basis of any official investigation to comment on the issues concerned, which were the subject of a special debate in this House? Why are we still waiting for the conclusion of the inquiry of the Stock Exchange? Does the Minister accept it is time to brush aside some of the mystery surrounding its workings? Is he contemplating the introduction of legislation for the independent monitoring and control of this area since, manifestly, the controls that exist for self-regulation are inadequate, as exposed in the Greencore affair?
I will not criticise a procedure that is internationally practised by the Stock Exchange. The Stock Exchange is taking this investigation very seriously and a great amount of time was devoted to it throughout the summer months.
Whatever about taking the matter seriously the Stock Exchange is taking a very long time to conclude its inquiry. It left the Minister holding the baby and now he comes in here five months later and defends it.
As Deputy Rabbitte knows better than most people in the House, tribunals and inquiries take a long time to complete their work.
They usually deal with very important matters.
This matter is being considered in a very important light. In reply to the Deputy's other question, I hope shortly to bring forward amending legislation in regard to the Stock Exchange.
Does the Minister not believe there is need for transparency in this area in view of the legislation he mentioned which will separate Dublin from London in terms of a future Stock Exchange control authority? There must be the utmost credibility in this regard. In view of the fact that the shares concerned were owned by the taxpayer and that the Minister said in the special debate referred to by Deputy Rabbitte there would be the fullest level of disclosure as to what happened with Warburg and so on, is the Minister now saying there will be no report and no disclosure? Finally, does the Minister not feel as sick as a parrot in that he could not sell the shares at £2.75 while some weeks later the Bank of Ireland could sell seven million shares at £3 each?
I will not go into the matter again with Deputy Yates. I would be very happy if I could take the easy option and publish the report but there is practice and precedent in these matters. I will shortly bring forward the Stock Exchange legislation and the House will then have an opportunity to debate the matter.
Has the substance, if not the full content of the Attorney General's report, been made available through him or his officials to the International Stock Exchange inquiry? In view of the grave embarrassment to the Minister personally and his Department in the selling of the residual Greencore shares, has the Minister concluded any policy in relation to future dealings with the firm in question?
I outlined earlier the policy decisions taken by me and the Department of Finance. The report was not made available. In fairness to the Stock Exchange, which has emphasised it is treating the investigation with the utmost seriousness, it would be unacceptable to publish what is an internal Government report by the Attorney General. The inquiry has twice examined all papers and relevant matters. Most of the data available to the Attorney General and his colleagues in their examination have also been examined by the International Stock Exchange.
The Minister said he proposes to introduce legislation to regulate the Stock Exchange. Is he aware that on 8 July 1992 he promised the Dáil he would introduce this legislation in autumn 1992? What is the reason for the delay in this regard?
The system used in breaking the link with the UK Stock Exchange, in which vast amounts of money were invested, went off the rails during 1992. The system and format now being used is very different from that used then. From a UK point of view, this meant that much of the work done over many years had to be effectively disregarded. It also meant a change of track for us. Having regard to this and other matters, I will continue to try to bring forward the legislation as soon as possible.
That concludes Question Time for today.
