Vol. 576 No. 5
64 Mr. M. Higgins asked the Tánaiste and Minister for Enterprise, Trade and Employment the progress to date in regard to the liquidation of IFI; if all obligations to the workforce have been satisfactorily discharged; if all pension entitlements will be met; the amount the State will receive as a 51% shareholder in IFI; and if she will make a statement on the matter. [29912/03]
I understand that the liquidation is progressing in an orderly and efficient manner and that considerable progress has been made regarding the realisation of the company's assets. However, while the company's principal properties in Arklow and Marino Point have been placed on the market, I am advised that it may take some time to sell them.
I also understand that most of the company's obligations to secured creditors have been settled, while payments to preferred creditors, which would include some amounts due to former employees, have been or are in the course of being made. Unfortunately, it is unlikely that payments will be made to unsecured creditors until the main property assets are sold, which I understand could take some time. I understand that the liquidator will hold a creditors meeting shortly to outline progress with the liquidation.
All claims received by my Department under the redundancy payments scheme and the insolvency payments scheme have been processed. Similarly, all applications received from employees for payments from the ex gratia fund of €24.5 million, established by ICI and the State, have been processed. Payments from the fund were made by the trustee thereof in accordance with the basis for distribution determined by him following consultations with employee representatives. A ballot open to all employees endorsed this basis for distribution.
Based on legal advice received, the liquidator has admitted, as unsecured creditors in the liquidation, claims from the employees of the company to have entitlements to enhanced redundancy payments. It must be emphasised that the amount to be paid in due course in respect of such claims is a matter solely for the liquidator.
I understand that the pension schemes covering all employees in the Republic, apart from a scheme covering two former chief executive officers, have sufficient funds to meet all the entitlements provided under the scheme, as well as pension increases of up to 3% per annum. However, there may not be sufficient funds to pay some discretionary benefits, which employees had hoped to receive.
With regard to the Belfast pension scheme, I understand that the scheme will only be able to pay active members, that is, employees still working at the time the company ceased operations, less than half their entitlements under the scheme. Existing pensioners are given priority and, as a result, they are largely unaffected by the shortfall in the fund. The shortfall involved arises primarily from a combination of stock market losses on investments and the impact of the regulatory regime in the North, which provides that pension schemes fund on a going concern basis. Our regulations require defined benefit schemes to fund on a more rigorous discontinuance basis. This ensures that provision is made for the additional costs of acquiring annuities when a scheme is wound up. I have only very limited information available about the scheme covering former chief executive officers, but I understand that this may be significantly underfunded. At this stage, I do not expect that the State will receive payment in respect of its shareholding in the company.
Will the Tánaiste indicate her knowledge of an article that appeared in the Sunday Independent on 16 November last under the headline “DPP gets file on former IFI bosses' special pensions”? In the course of that article by Mr. Jody Corcoran, it is alleged that an investigation into secretive pension plans for three former executives of IFI is under way. The article further states: “On foot of the IFI management board recommendations, the Tánaiste—
It is not in order to quote at Question Time.
I will merely refer to the article, which indicates that on foot of the recommendations to which I refer, the Tánaiste shut down the company. It appears, therefore, that the Tánaiste made the critical decision to make more than 600 people redundant based on advice from those who are allegedly under investigation. Will the Tánaiste indicate what she knows about the investigation? Who is carrying out that investigation? On her comment that the State will receive nothing from its 51% shareholding, has Mr. Jackson, the liquidator, indicated that he expects to raise over €100 million? In that context, why will the State, which owned 51% of IFI Holdings, not receive anything?
I know very little about the article in the newspaper. I did not know anything about that article or its subject matter until it appeared. Responsibility for pension funds rests with the trustees, not the shareholders. The latter have no role in respect of pension funds. As I understand it, the article refers to the scheme I referred to in my reply, namely, that covering two former retired chief executive officers. I place on record that there are no financial irregularities involved and no one has suggested otherwise. However, I understand that the Pensions Board has referred the matter to the Director of Public Prosecutions. I am, therefore, unable to say anything more about it. Neither the shareholders nor I had, nor should we have, any hand, act or part in this.
In terms of the amounts realised from the disposal of the two sites, there are many others, such as, for example, the unsecured creditors to whom I referred in my reply, who will have to be paid in the first instance. We have an undertaking to the employees that we would reconsider some of the issues surrounding their concerns in the event that assets are realised. I am not saying that the State would not wish to recoup some money, but it is not our intention to recoup any money from this sad and sorry episode. If there was a surplus of funds, it would be divided on a fair basis between the employees who worked for IFI when it closed.
Is the Tánaiste making a commitment that any surplus remaining after the liquidation will be distributed to the former employees on a pro rata basis? What is the estimated cost of the liquidation, in other words, how much will have to be paid to KPMG and the liquidator?
I will have to communicate with the Deputy later in respect of the fee because I do not have information on it. There are clean-up issues that arise in respect of the sites which must be taken into account. When I met the employee representatives, I stated that in the event of there being a surplus of funds when everyone else had been paid and site liabilities taken care of, it would be the intention of the Government to reconsider the allocation for the employees. That is my commitment which I reiterate here.
Have serious offers been made for the site in Arklow? Has any group or individual expressed interest in the site? Will the Tanáiste confirm if it is possible that unsecured creditors will not receive full payment? Is there a chance they will not be paid and when will they know their final fate?
Payment is dependent on realising resources from disposal of the sites. I would be surprised if we could not dispose of at least one, if not both, of them. I have no information in that regard and I have not had any recent discussions with the liquidator on what interest has been expressed in the Arklow site.
I am aware that, following the announcement of the closure of IFI, there were indications of planning related difficulties with activity on that site. I do not know if that is the case. As Deputy Timmins comes from County Wicklow, he would be much more familiar with the case than I am.
Unfortunately, we always have planning difficulties.
One would have to be from the Wicklow area to buy it.
That is Government policy. I hope the Tanáiste is enlightened enough to introduce change.
The Government does not decide where a person lives. I thought that was a matter for Wicklow County Council.
We are told that we must follow Government instructions.
No, definitely not.
I hope the Tanáiste is enlightened enough to change it.
There are many lovely places in Wicklow.
