Commission of Investigation
(Irish b a n k resolution
corporation)

An Coimisiun ImscrudUchain
(Corpara!Dna hEiREANN urn
Reiteach Bainc)

th e Hon. Mr. Justice Brian Cregan
Sole M ember

SE C O N D IN T E R IM R E P O R T
15th A P R IL 2016

S u b m itte d to th e T aoiseach p u r s u a n t to a re q u e st d ated 14th J a n u a ry 2016 fro m th e
T aoiseach m ad e u n d e r sections 33(1) an d 33(2) of th e C om m issions o f In v estig atio n Act
2004 and w ith a re q u e s t f o r th e revision o f th e tim e fra m e f o r su b m ittin g a fm al re p o rt
u n d e r section 6(6) o f th e C om m issions o f In v estig atio n A ct 2004

 TA BLE OF CONTENTS

1.

IN T R O D U C T IO N ........................................................................................................................... 3

2.

S U M M A R Y O F P R O G R E SS IN R E L A T IO N T O M A T T E R S SE T O U T IN T H E
F IR S T IN T E R IM R E P O R T .........................................................................................................5

3.

O T H E R W O R K C O M P L E T E D S IN C E T H E F IR S T IN T E R IM R E P O R T ............11

4.

C O S T S O F T H E C O M M IS S IO N T O D A T E ...................................................................... 15

5.

C O N C L U S IO N S .............................................................................................................................16

A PPE N D IX
1.

D E T E R M IN A T IO N 3 O F 16 D E C E M B E R 2015

 1.

IN T R O D U C T IO N

1.1.

On 16th June 2015 the Govenrnment made an Order under the Com m issions o f
Investigation Act 2004 (the "2004 Act” or the “A ct”) establishing the Com m ission o f
Investigation into Irish Bank Resolution Corporation (“IBRC”). This Order is set out
in S.l. 253

o f 2015 - Com m ission o f Investigation (Irish Bank Resolution

Corporation) Order 2015.

1.2.

U nder the O rder o f the Governm ent which established the Com m ission, the
Taoiseach was appointed as the Specified M inister pursuant to section 3(3)(b) o f the
Act.

1.3.

T he Statutory Instrument establishing the Com m ission provides that the Coimmnission
shall (subject to section 6(6) o f the Act) subm it to the Taoiseach the final report in
relation to its investigation no later than 31st December 2015.

1.4.

The C om m ission submitted its First Interim Report to the Taoiseach on 13th
N ovem ber 2015. T ie R e p o t set out the work o f the Cormnission to date, requested
certain am endments to its Term s o f Reference, informed the Governm ent that certain
legislative changes are required to overcom e legal difficulties in respect o f bankercustom er confidentiality and legal professional privilege and also requested a revision
o f the tim e frame for subm itting its final report under section 6(6) o f the 2004 Act.

1.5.

By letter dated 22nd D ecem ber 2015, the Taoiseach agreed to extend the tim e within
w hich the C o ^ i i s s i o n had to subm it a Report until the end of April 2016. This letter
also noted that "...there is ongoing work in relation to certain legislative and other
issues raised in yo u r Interim Report arising fro m the work o f the Commission to date.
The outcom e o f this work will fa c ilita te a fu rth e r decision in due course on the
tim efram e fo r the C om m ission's fin a l report. I understand that it w ill be possible fo r
the C om m ission to continue certain preparatory w ork in the m eantim e"

1.6.

The C om m ission notes that the w ork refened to in the Taoiseach’s letter remains
ongoing pending the fonnation o f a new Government following the recent general
election.

 1.7.

On 14m January 2016, the Taoiseach wrote to the Com m ission formally requesting a
farther Interim Report when appropriate, on the work completed on all aspects o f its
T en n s o f Reference, including in relation to the Siteserv transaction.

1.8.

This Second Interim R eport is fam ished pursuant to this request. It sum m arises the
work which has been undertaken by the Com m ission since the submission o f its First
Interim Report on 13th November 2015 and also requests an extension o f time for
subm itting a final report under section 6(6) o f the 2004 Act.

 2.

S U M M A R Y O F PR O G R E SS IN R E L A T IO N T O M A T TER S S E T O U T IN
T H E F IR S T IN T E R IM R E P O R T

2.1.

U nder its T en n s o f Reference, the Com m ission is required to investigate all
transactions w hich resulted in a capital loss to IBRC o f at least €10 m illion during the
Relevant Period. The Special Liquidators provided a schedule o f transactions to the
Com m ission. This schedule contained a list o f3 8 transactions.

2.2.

O f these 38 transactions, there were six transactions with write-offs greater than €100
million (with a combined value o f €859 million); there were also six transactions
w here the write-offs were betw een €50 m illion and €1 00 m illion (w ith a combined
value o f €448 million). The total amount o f write-offs o f the first tw elve transactions
amounted to €1.3 billion.

The total am ount o f write-offs in respect o f all 38

transactions amounted to €1.881 billion.

2.3.

Section 22 o f the First Interim R eport outlined the Com m ission’s conclusions and
recom m endations in relation to m atters that had arisen up to the date o f that report.
Set out below is a summary o f developments and progress made since then in relation
to each o f those matters.

(a) T h e Issue o f C o n fid en tiality

2A.

As set out in the First Interim Report, the Special Liquidators o f IBRC asserted a duty
o f confidentiality over all the docum ents subm itted by them to the Com m ission w hich
contained banker-custom er inform ation. The D epartm ent o f Finance also asserted a
duty o f confidentiality in respect o f docum ents provided by IBRC to the Department.
(H ow ever, it did not assert confidentiality over any docum ents which were
confidential to the Departm ent).

This is still the position.

Accordingly, the

C om m ission rem ains unable to receive into evidence the vast bulk o f the documents
fiim ished to it by both the Special Liquidators and the Departm ent o f Finance and is
unable to proceed with its investigation into the Siteserv transaction, or any other
transaction, without legislative change.

 2.5.

A lthough Siteserv Plc (the parent company) has waived its right to confidentiality
over docum ents related to that com pany w hich have been provided to the Com m ission
by the Special Liquidators (see section 3(c) below), this waiver does not extend to
docum ents related to the fo n n er subsidiaries o f Siteserv Plc.

(b) T h e Issue o f Privilege

2.6.

The Special Liquidators initially claimed legal professional privilege over m any o f the
docum ents which they furnished to the Com m ission. The C om m ission concluded in
N ovem ber 2015 that the general legal professional privilege claimed by the Special
Liquidators did apply to the relevant documents.
developm ents referred

to below

As a result (subject to the

in relation to the Siteserv transaction)

the

C om m ission remains unable to proceed w ith its investigation until this issue is
resolved.

2.7.

On 17th N ovem ber 2015, the C om m ission w rote to the Special Liquidators requesting
that they review all docum ents over which legal professional privilege had been
claim ed in respect o f the Siteserv transaction and asking them to waive this privilege.

2.8.

On 1511’ D ecem ber 2015, the Special Liquidators wrote to the Com m ission to indicate
that, having reviewed the docum ents relating to the Siteserv transaction, the Special
Liquidators were satisfied to waive legal professional privilege over these documents.
The Special Liquidators emphasised, however, that they continued to m aintain their
claim o f confidentiality over all docum ents, including privileged documents.

2.9.

The C om m ission is satisfied that the issue o f privilege in respect o f the Siteserv
transaction has now been resolved between the C om m ission and the Special
Liquidators and all such documents may be admitted into evidence by the
Com m ission if the issue o f confidentiality is resolved.

H owever, the issue o f

privilege in respect o f the other transactions under investigation rem ains umesolved.

 2.10. As the Com m ission set out in its First Interim Report, the Central Bank is unable to
provide certain documents to the Com m ission because o f legal restrictions on
confidentiality. As som e of these legal restrictions exist in Irish law pursuant to EU
legal requirem ents, a change to the Central B ank's duty of confidentiality would
require a legal am endm ent not only to Irish law but also to EU law. This would be
im practical.

2.11. In the circum stances, the Com m ission decided to ask the Special Liquidators to
provide all conespondence betw een IBRC and the Cenfral Bank relevant to the
C om m ission’s Terms o f Reference. On 23rd D ecem ber 2015, the Special Liquidators
delivered 35 lever arch folders o f docum ents to the Commission.

On 21SI January

2016, the Special Liquidators delivered a further 17 lever arch files.

2.12. Follow ing a review o f these 52 lever arch files and following further conespondence
and meetings between the Com m ission and the Special Liquidators, the Comm ission
issued a further Direction to the Special Liquidators o f IBRC requiring specific
docum ents relating to dealings between IBRC and the Central Bank concerning the
Siteserv transaction and lim ited to a specific time period.

2.13. The C om m ission further directed that these docum ents be fam ished by 21st April
2016.

T he C om m ission awaits the provision o f these docum ents by the Special

Liquidators.

(d) T h e Iris h S tock E x ch an g e

2.14. The C om m ission received certain docum ents from the Irish Stock Exchange over
w hich the Stock Exchange asserted a statutory duty o f confidentiality.

On 16th

D ecem ber 2015 the Com m ission m ade a D eterm ination that the statutory duty o f
confidentiality did apply to the docum ents furnished by the Irish Stock Exchange. As
a result, these docum ents cannot be adm itted into evidence w ithout legislative change.
The C om m ission awaits a response to its recom m endation for appropriate legislative

 change in this area as set out in the First Interim Report. A copy o f D eterm ination 3
o f the Com m ission is in Appendix 1 o f this Interim Report.

(e) T e rm s o f R eference

2.15. Section 14 o f the First Interim R eport concerned a num ber o f issues w hich the
Com m ission had identified with its Term s o f Reference. Under cover o f a letter dated
13th N ovem ber 2015 the Cormnission wrote to the Taoiseach pursuant to the
provisions o f section 6(1) o f the Com m issions o f Investigation Act 2004 requesting
certain am endm ents to its T e rn s o f Reference in light o f the issues highlighted in its
First Interim Report.

2.16. B y letter o f 14th Januaiy 2016 the Taoiseach notified the Com m ission that he had
w ritten to various m em bers o f the O pposition and had furnished to them a discussion
paper arising out o f the C om m ission’s First Interim Report. The Taoiseach requested
the view s o f the O pposition Leaders in response to his discussion paper.

The

Com m ission understands that fonnal responses from the O pposition Leaders were
furnished to the Taoiseach in January 2016 and that the G ovenunent is considering
those responses.

(f) M ean in g o f C a p ita l Loss

2.17. Section 15 o f the C om m ission’s First Interim Report dealt with the m eaning o f the
tem i “ Capital Loss” as used in the C orm nission’s Term s o f Reference. It was pointed
out that the term “Capital Loss”, although used in the T enns o f Reference, is not
defined. T he C om m ission was concerned that, in the absence o f a clear definition,
there m ight be uncertainty as to the transactions that are required to be investigated
under the Term s o f Reference.

2.18. In the First Interim Report, the Com m ission stated its intention to arnve at a
concluded view as to the m eaning o f the term “Capital Loss” and stated that it would
w elcom e clarification o f the intended m eaning o f that tenn. Since the First Interim
R eport was issued, the Com m ission has engaged further with the Special Liquidators
in relation to tliis issue. The Com m ission has also obtained expert advice on the

 m eaning o f the term "Capital Loss” as understood in the banking industry at the
relevant time.

2.19. As stated in the First Interim Report, the Coim nission would welcome clarification o f
the intended m eaning of the tem i “Capital Loss” .

(g) S iteserv Plc

2.20. As was stated in the First Interim R e p o t, Siteserv Plc was dissolved by operation o f
law with effect fi-om 6th August 2015. The C om m ission first becam e aware o f the
dissolution o f Siteserv on 22nd Septem ber 2015.

2.21. On 17th N ovem ber 2015, the Commission w rote to the Liquidator o f Siteserv Plc (Mr
Kieran W allace) stating that it was o f the view that Siteserv Plc should be restored to
the R egister o f Com panies im m ediately and that Mr W allace should m ake an
application to the High C ourt to have the com pany restored as soon as possible.

2.22. O n 7th D ecem ber 2015. the High C ourt made an Order declaring the dissolution o f
Siteserv Plc void pursuant to section 708 o f the Companies Act 2014 a id under
O rders 74 and 83 o f the Rules o f Superior Courts. The effect o f this Order was to
restore Siteserv Plc to the Register o f Com panies as a com pany in liquidation.

(h) M a n a g e m e n t o f W o rk lo a d an d R eso u rces

2.23. As pointed out in the First Interim R e p o t, the eventual duration, resource
requirem ents and cost o f the C om m ission’s investigations will be determ ined by the
scope and extent o f its work, w hich will, in turn, result fi-om the number and scale o f
transactions to be investigated and the extent o f the C om m ission’s Term s o f
Reference. The C om m ission awaits a response to the issues raised in the First Interim
Report in relation to, inter alia, the need for legislative change, the scope o f its
inquiries and its T enns o f Reference.

W ie n the Com m ission has received these

responses it will be in a position to com ment further on likely resource needs,
duration and cost.

 (i) O th e r M a tte rs o f P ublic C o n cern

2.24. The position on this aspect o f the C om m ission’s investigation remains unchanged
since the First Interim Report was issued.

 3.

O T H E R W O R K C O M P L E T E D S IN C E T H E F IR S T IN T E R IM R E P O R T

3.1.

In addition to the work described in Section 2 above, the Com m ission has continued
to undertake prelim inary and preparatory work in anticipation o f a resolution o f the
issues which have prevented it fi-om investigating the transactions covered by its
T enus o f Reference.

This section summarises the additional preliminary and

preparatory work carried out since the First Interim Report.

(a) D iscovery by th e S pecial L iq u id a to rs o f IB R C o f docum ents rela tin g to
S iteserv

3.2.

The Siteserv transaction has been the focus o f significant public concern. M oreover,
the w rite-off o f IBRC loans in respect o f Siteseiv is greater than €100 m illion and it is
therefore one o f the six largest write-offs w ithin the schedule o f write-offs provided
by the Special Liquidators to the Comm ission. The Com m ission had also directed the
Special Liquidators to furnish to the Com m ission all docum ents which were in their
possession relevant to this transaction. Therefore, the Cormnission was and rem ains
o f the view that, despite the obstacles w ith respect to confidentiality and privilege, it
is appropriate to continue with the prelim inary and preparatory work on the Siteserv
transaction.

3.3.

O n 28th September 2015 the Com m ission issued a Direction to the Special Liquidators
to furnish to the Com m ission all docum ents in their possession relating to Siteserv.
Pursuant to this Direction, the Special Liquidators furnished to the Com m ission 276
lever arch files o f docum ents ( r n n in g to approxim ately 186,000 pages).

These

docum ents were provided on a phased basis between 1st O ctober 2015 and 16th
O ctober 2015. The Special Liquidators asserted a duty o f confidentiality over all o f
these docum ents on the grounds o f banker-custom er confidentiality.

They also

claim ed legal professional privilege over m any o f them.

3.4.

T he C om m ission also issued a D irection on 28th Septem ber 2015 to the Special
Liquidators w hich required the Special Liquidators to furnish certain other categories
o f docum ents, som e o f w hich are also relevant to the Siteserv transaction.

 3.5.

In m id-Novem ber 2015 the legal team o f the Comm ission com menced its review o f
these docum ents with a view to preparing booklets o f core documents which were
relevant to the Siteserv transaction. This relevance review by the Com m ission’s legal
team o f these 276 lever arch folders took approxim ately four weeks to complete. This
review process reduced the num ber o f lever arch files fi'om 276 to 20.

3.6.

The Com m ission noted that certain docum entation which it would have expected to
be included in the discovery had not been furnished to it. For example, there were
virtually no docum ents, em ails or conespondence to or fi'om certain officers and staff
o f IBRC. In January 2016, the Comm ission w rote to the Special Liquidators in this
regard and in February 2016 it held a meeting with the Special Liquidators and their
legal advisors to review the discovery process.
Liquidators

would

review

the

situation.

It was agreed that the Special

Following

further

m eetings

and

conespondence which revealed further issues, the Special Liquidators agreed to
undertake a further and revised discovery exercise.

3.7.

T he Com m ission understands, fi'om its recent com m unications with the Special
Liquidators, that it will shortly receive a further 50,000 pages o f documents as a result
o f this second discovery process.

(b) D iscovery o f D ocum ents by S iteserv Plc (in liq u id atio n )

3.8.

Follow ing the com pany’s restoration to the Register o f Companies, the Comm ission
wrote to the Liquidator o f Siteserv Plc on 11th D ecem ber 2015. On 22nd December
2015, the C om m ission issued its first Direction to Siteserv Plc requiring specified
docum ents be furnished to the Commission.

3.9.

On 13Ul January 2016, the Liquidator o f Siteserv Plc furnished to the Com m ission all
docum ents w hich were in his possession relating to Siteserv Plc. These documents
com prised 46 folders. Further docum ents were furnished to the Conunission on 5th
April 2016 by Siteserv Plc’s solicitors.

 3.10. On 13l1' January 2016 Siteserv Plc furnished to the Comm ission a copy o f the
executed Share Sale A greem ent, dated 15th March 2012, betw een Siteserv Plc and
M illington Limited.

(c) S iteserv Plc - W a iv e r o f co n fidentiality

3.11. After the com pany’s restoration to the R egister o f Com panies, the Com m ission wrote
to the Liquidator o f Siteserv Plc stating that the Special Liquidators had claimed
confidentiality over docum ents relating to Siteserv Plc w hich had been furnished to
the Com m ission.

The Com m ission requested Siteserv Plc to waive any claim to

confidentiality over the docum ents.

3.12. By letter dated 17th D ecem ber 2015, the Liquidator o f Siteseiv Plc (through his legal
advisors), replied to the Com m ission stating, inter alia, “ We are instructed by our
client that Siteserv Plc (the "C om pany") w aives any claim to confidentiality over the
docum ents p ro vid ed to the Com mission o f Investigation by the Special Liquidators
relating to the Com pany.”

3.13. Follow ing correspondence betw een the Special Liquidators o f IBRC, the Liquidator
o f Siteserv Plc and the Com m ission, on 4th February 2016 the Liquidator o f Siteserv
Plc wrote to the Special Liquidators o f IBRC stating that he was prepared to waive the
com pany’s right o f confidentiality.

However, this letter also stated “F or the

avoidance o f doubt, however, this waiver does not extend to docum ents in respect o f
which IB R C ’s duty o f confidentiality is to a subsidiary o f Siteserv Plc or documents in
respect o f which Siteserv p lc has a duty o f confidentiality to any third p a rty (including
any subsidiary o f Siteserv Plc) which precludes Siteserv Plc fro m agreeing to their
disclosure to another pa rty.”

3.14. A ccordingly, because the parent com pany, Siteserv Plc, and all o f its subsidiaries, had
been borrow ers o f IBRC, the duty o f confidentiality w hich IBRC owed to its
custom ers was a duty o f confidentiality to the parent com pany and each o f the
subsidiaries. As Siteserv Plc sold all o f its operating subsidiaries to M illington, and
then w ent into liquidation, the Liquidator o f Siteseiv Plc could only waive

 confidentiality in respect o f infonnation which related to Siteserv Plc as the parent
company.
them.

The right to banking confidentiality o f the subsidiaries rem ained with

Thus the appropriate persons to waive that right o f confidentiality are the

subsidiaries o f Siteserv Plc which are now owned by M illington Limited.

3.15. As a result, the Com m ission has written to M illington Limited and the former
subsidiaries o f Siteseiv Plc to request that they waive their right to confidentiality
over all o f the relevant docum ents and inform ation which the Special Liquidators
have furnished to the Comm ission.

Arthur Cox, on b eh alf o f M illington, replied

seeking a list o f the documents over which a waiver o f confidentiality is being sought.
The C om m ission is in the process o f finalising this list and will send it to M illington
once it is com plete. However, this process has been delayed because the Com m ission
is now expecting a further 50,000 pages o f docum entation from the Special
Liquidators in relation to Siteseiv and these will have to be included in the list o f
documents to be furnished to M illington/the fonner subsidiaries o f Siteserv Plc.

3.16. The potential duty o f confidentiality to third parties other than the fonner subsidiaries
o f Siteserv Plc also rem ains unresolved.

(d) U p d a te on o th e r tran sac tio n s

3.17. Pending the resolution o f the legal problems identified in the First Interim Report and
in order to m inim ise the cost to the taxpayer, the Comm ission has not progressed its
investigation into any other transaction apart from Siteserv.

 4.

C O S T S O F T H E C O M M IS S IO N T O D A TE

4.1.

The C om m ission’s costs up to 7th April 2016 amount to approxim ately €631,000.
This expenditure includes salaries, legal costs, rent, building overheads & services
and adm inistration costs.

4.2.

The Special Liquidators have informed the Com m ission that the costs incurred by
them in assisting the Com m ission with its investigation are €2,786,998.

This

com prises the costs incuned by the Special Liquidators, up to 31st January 2016, o f
€2,333,750 (exclusive o f VAT) and legal costs, up to 15lh March 2016, o f€ 4 5 3 ,2 4 8
(inclusive o f VAT).

4.3.

The D epartm ent o f Finance has informed the Com m ission that its external legal costs
to date are approxim ately €246,000 (inclusive o f VAT).

4.4.

The legal representatives o f the Directors o flB R C inform ed the Comm ission that they
are not in a position to provide an estim ate o f their legal costs to date at this stage.

4.5.

T he C onm iission has m ade no determ ination w ith regard to the recovery o f the
aforem entioned costs pursuant to the provisions o f section 24 o f the 2004 Act.

4.6.

Third parties with whom the Comm ission has been in com munication, such as the
Liquidator o f Siteserv Plc and M illington Limited, may also seek to recover their legal
costs from the Comm ission.

4.7.

G iven the uncertainty w hich remains m respect o f the Com m ission’s Term s o f
R eference and the scale and scope o f the Com m ission’s investigation, it is not
possible to provide an estimate o f the C om m ission’s future costs. As explained in the
First Interim Report, should the Com m ission be required to investigate all 38
transactions w hich have been identified to date, then the Com m ission’s costs and third
party costs will be very significant.

 5.

C O N C L U S IO N S

5.1.

The Com m ission notes that many o f the issues raised in its First Interim Report
rem ain unresolved.

These include the C om m ission’s requests for appropriate

legislative change and for am endm ents to its T en n s o f Reference. In this regard, the
C om m ission notes that in January 2016 the Taoiseach w rote to the Leaders o f the
O pposition enclosing a discussion paper in relation to possible approaches to resolve
the issues w hich have arisen in relation to the w ork o f the Com m ission.

The

discussion paper, a copy o f w hich was furnished to the Comm ission by the Taoiseach
under cover o f letter dated 14lh January 2016, sets out a possible approach to
legislative change and a possible approach to revised Terms o f Reference, including
the possibility that the Com m ission m ight be requested to initially report on the
Siteserv transaction alone.

5.2.

N otw ithstanding these issues, the C om m ission is o f the view that it should continue
its prelim inary and preparatory w ork (principally in relation to the Siteserv
transaction) but should not em bark on any new w ork in relation to other transactions
until these m atters are resolved.

5.3.

However, in order to allow the cuiTent prelim inary and preparatory w ork to continue,
and to enable the C om m ission to be properly prepared to undertake its investigation
w hen it is appropriate to do so, an extension o f the cu n en t tim efram e for the
subm ission o f the C om m ission’s final report is now requested pursuant section 6(6) o f
the C om m issions o f Investigation Act 2004.

Signed:
T h e H o n . M r. Ju stice B ria n C reg an
S ole M em b er

 Appendix 1

Commission of Investigation
(Irish bam P.ESCLUTm;
CORPORATION!

An Coimisiun Imscruduchain
(CORPARAIDna hElREANN um
RllTEACHBAINC)

The Hon. f\lir. Justice Brian Cregan
Sole Member

In th e m a tte r o f th e
C om m issions o f Investigation A ct 2004

an d

In th e m a tte r o f the
C om m ission o f Investigation into
Iris h B a n k R esolution C o rp o ratio n

an d

In th e m a tte r o f
D ocum ents o v e r w h ich a d u ty of co n fid en tiality a n d priv acy
have been a sse rte d by th e Irish S tock E x ch a n g e Pic,

D eterm ination 3 o f the Com m ission (Pursuant to Section 21(2) o f the Commissions
o f Investigation Act 2004) on assertions o f confidentiality over certain documents.

Dated the 16Ih day o f D ecem ber 2015.

 1.1.

The Comm ission o f Investigation into the Irish Bank Resolution Corporation ("The
Comm ission”) issued a Direction pursuant to Section 16 o f the Conunissions o f
Investigation Act 2004 directing the Irish Stock Exchange Plc (‘T h e Stock
Exchange") to disclose to the Conunission documents which the Stock Exchange
may have obtained by virtue o f the exercise o f its functions under Part V o f the
Companies Act 1990 in relation to Siteserv Plc for the purpose o f gathering
evidence for use in the conduct o fits investigation.

1.2.

In response, and in com pliance with the said direction, Daryl Byrne, Head o f
Regulation at the Stock Exchange, swore an affidavit to verify the list o f docum ents
in the possession o f the Stock Exchange obtained by virtue o f the exercise o f its
functions under Part V o f the Companies A ct 1990.

In his affidavit, Mr Daryl

B ^ n e objected to producing certain docum ents on the basis that they com prised
inform ation obtained by relevant persons w ithin the m eaning o f Section 118 o f the
Companies Act 1990 by virtue o f the exercise by the Stock Exchange o f its
functions under P art V o f the Companies Act 1990 on the ground that such
inform ation could not b e disclosed w ithout contravening the provisions o f Section
118 ( 1) o f the C om panies Act 1990 and thereby com m itting an offence.

1.3.

M r Daryl Byrne in h is affidavit further objected to producing the same documents
on the grounds that they contain inform ation w hich itself, or together w ith other
inform ation, is confidential and/or private, and is accordingly subject to duties o f
non-disclosure and the m aintenance o f privacy and confidentiality by virtue o f
statute, including the Data Protection Acts 1998-2003, and otherw ise by law.

1.4.

T his decision is the determ ination o f the Com m ission pursuant to Section 21(2) o f
th e Com m issions o f Investigation A ct 2004. T his determ ination considers whether
the claim to confidentiality under Section 118 o f the Companies Act 1990 applies.
In the light o f the Com m ission’s decision in relation to this matter, it is not
considered necessary for the Com m ission to go on to decide whether the Stock
Exchange is entitled to refuse to disclose the sam e infonnation on the grounds set
out in Paragraph 1.3 above.

 2.1.

By direction in w riting dated the 4th day o f N ovem ber 2015 made pursuant to the
pow ers conferred upon it under Section 16 o f the Comm issions o f Investigation Act
2004, the Com m ission directed the Irish Stock Exchange on or before Tuesday 17th
N ovem ber 2015 to:

(a) provide the Comm ission with a list, verified by affidavit, disclosing all docum ents
in the possession or power o f Irish Stock Exchange Plc that the Irish Stock
Exchange may have obtained by virtue o f the exercise o f its functions under Part
V o f the Com panies Act 1990 in relation to Siteserv Plc between 21sl January 2009
and 7lh February 2013;
(b) specify in the affidavit any o f the listed docum ents which the Irish Stock
Exchange objects to producing to the Com m ission, setting out the basis for any
such objection; and to
(c) fum ish all such inform ation and documentation (including any report prepared by
the Irish Stock Exchange) in relation to the m atter to the Commission.

The

direction further stated that references therein to the Irish Stock Exchange include
any relevant authority, authorised person, em ployee or fonner em ployee o f the
Exchange.

2.2.

The said direction w as addressed and delivered to M r Daryl Byrne, Head o f
Regulation o f the Stock Exchange.

2.3.

By letter dated 4th N ovem ber 2015 enclosing the above direction, the Comm ission
m ade it clear that the direction required M r Bym e to provide the documentation to the
C om m ission so that the Commission could decide whether such docum entation is
confidential u nder the provisions o f Section 118 o f the Companies Act 1990.

3.

R esponse o f th e S to ck E xchange.
3.1 The Stock Exchange, in com pliance with the provisions o f the direction dated 4lh
N ovem ber 2015:
1.

enclosed an affidavit sw om by Mr Daryl Byrne disclosing, and verifying a list of,
all docum ents in the possession or pow er o f the Stock Exchange that it may have
obtained by virtue o f the exercise o f its functions under Part V o f the Companies

 Act 1990, in relation to Siteserv Plc between 21s1 Januaiy 2009 and 7,J1 February
2013;
2.

M r Byrne specified in the affidavit that the Irish Stock Exchange objected to
producing all o f the documents concerned, setting out the basis for such
objections; and

3. M r Byrne furnished with the said letter copies o f the documents concerned, in
order that the Commission might m ake a determ ination under Section 21 o f the
2004 Act as to w hether, and/or to w hat extent, the duties o f confidentiality relied
up on by the Stock Exchange as grounds for refusing to produce the docum ents,
apply to the docum ents, or to any inform ation contained in them.

3.2 Further, M r Byrne on behalf o f the Stock Exchange provided other docum ents
identified by it as being o f relevance to the Com m ission’s Ternis o f Reference and
w hich the Stock Exchange did not consider to be subject to any prohibition or
disclosure or duty o f confidentiality.

3.3

In his affidavit dated 17th Novem ber 2015, M r Daryl Byme specified th e grounds
upon w hich the Stock Exchange objected to producing to the Commission the
docum ents set out in the second part o f the first schedule to his affidavit in the
follow ing term s:
“9.

The Irish Stock Exchange objects to producing the documents set

fo rth in the second p a rt o f the fir s t schedule hereto because the sa id
docum ents comprise and/or contain information obtained by relevant
persons within the m eaning o f Section 118 o f the 1990 Act, by virtue o f
the exercise by the Irish Stock Exchange o f its functions under Part V o f
the 1990 Act, or as the case m ay be, by virtue o f the exercise o f these
fu n ctio n s as well as other functions, and which, accordingly, may not be
disclosed without contravening Section 118 (1) o f the 1990 Act, and
com m itting an offence.
10.

The

Irish Stock Exchange

fu rth e r objects to producing these

docum ents because they contain information which itself, or together
with

other

information,

is

confidential

and/or private,

and

is

accordingly subject to duties o f non-disclosure and the maintenance o f
privacy and confidentiality by virtue o f statute, including the Data
Protection Acts 1988 to 2003, and othenvise by law".

 4.

T h e C laim u n d e r Section 118, C o m p an ies A ct 1990.
4.1 Section 118 o f the Companies Act 1990 provides as follows:
“(I) Inform ation obtained by any o f the fo llo w in g persons by virtue o f the exercise
by a recognised Stock Exchange o f its functions under this Part shall not be
disclosed except in accordance with law’, n a m e ly (a) a relevant authority o f the Exchange,
(b) an authorised person, or
(c) any person em ployed or fo rm erly em ployed by the Exchange.
(2) Subsection (J) shall not prevent the relevant authority o f a recognised Stock
Exchange fr o m disclosing any information to the Minister, whether pursuant to a
request under 115 (5) or o th e w ise, or to a sim ilar authority>in another m em ber
State o f the European Communities.
(3) Any person who contravenes subsection (!) shall be guilty o f an offence

4.2

“Relevant Authority” is defined by Section 107, Companies Act 1990 as meaning,
in relation to a recognised Stock E x c h a n g e “i. its board o f directors, committee o f m anagem ent or other m anagem ent body,
or
ii. its manager, however described; ”

4.3

“A uthorised Person” is defined in Section 117(1) as meaning a person approved by
the M inister to be an authorised person for the purposes o fP a rt V b e i n g (a) the m anager, how ever described, o f a recognised stock exchange, or
(b) a person nom inated by a relevant authority o f a recognised stock exchange.

4.4

Part V o f the Com panies Act creates several crim inal offences in relation to so-called
insider dealing. In addition, Part V provides for a civil liability from la w fil dealing in
certain circum stances.

4.5

Section 115 o f the Companies Act 1990 obliges a relevant authority o f a recognised
stock exchange to report forthw ith to the D irection o f Public Prosecutions, if it appears
to the relevant authority that any person has com mitted an offence under Part V.

 4.6

Section 117 o f the Companies Act 1990 confers on authorised persons certain powers
o f investigation.

Subsection (3) specifically provides that an authorised person may

require that a person w hom he or such relevant authority has a reasonable cause to
believe to have dealt in securities, or to have any infonnation about such dealings, to
give to the authorised person any inform ation that he may reasonably require in regard
to the securities concerned; the com pany who issued the securities; his dealings in such
securities; or any other infom iation the authorised person reasonably requires in
relation to such securities or such dealings; and to give him such access to and facilities
for inspecting and taking copies o f any docum ents relating to the m atter as he
reasonably requires, subject to the pow er o f the High Court to declare that the
exigencies o f the conmion good do not w anant the exercise by the authorised person o f
the powers confened on him by Section 117.

4.7

In order for the relevant authority and any authorised person to carry out their functions
under Part V, it is necessary for the Stock Exchange to m onitor share trades in order to
detect circum stances giving rise to suspicion o f possible contraventions o f the
provision o f Part V o f the 1990 Act.

5

S ection 21 o f th e C om m issions o f In v estig atio n A ct 2004
5.1 S ection 21
(1) Subject to subsection (4), r odvny’ in this_ A ct cornuais- --­
(a) the_ disclosure by anv person o f env inibrnnuion that the yvr.sc.i would be
entitled under anv r u le j jfJ a jv or enactm ent to refuse to disclose on the
gjjri'fUilS-l

p r'vUeze or anv duty oi'confklemiaiiiv, or

(b) the production o f any document in the person's possession or pow er
containing such information.

(2) Whiere a j v v . y ^cla im s t_o_be_enti_tled under _a n v rule of

or enactment _to jj'iBise^on

the w o u nds o f anv /n iy d e g c o r anv duty o f coufidantUdiiv(a)

to. disclose any inform ation required in the course o f an investigation by a
com m ission (including information required in response to a request made
under section 14 (5) or to a question p u t under section 16 and information in
a statem ent or answ er that is the subject to a direction under section
16 (1)(h), or

 (b)

toj-ynjuiH-e anv document in the person's possession or pow er that the person
is directed under this A ct to produce,

the c o m m issio j^ ;]}^ subject to subsection (4) o f this section, determine whether the
!>:jvikyi.i or the _duty j >1 confiden.fialiiy- crp-piics to that ininrnwiiou or document.

(3) Where the commission determines that the privilege or the duty o f confidentiality
relied on by a person as grounds f o r refusing to disclose information referred to in
subsection (2)(a) does not apply to the information, the person shall disclose that
inform ation to the commission unless the determ ination is overturned under section 22_

(4) A determination m ay only be made under subsection (2)(b) in relation to a document
i f the com m ission has—
(a) exam ined the document, and
(b) considered a written statement provided by the person concerned specifying
the grounds fo r the claim, including the privilege or duty o f confidentiality
relied on.

(5) F o r the purposes ofsubsection (4), the person concerned shall, at the commission's
request—
(a) subm it the docum ent to the commission within the p erio d specified in the
request, and
(b) unless exem pted under subsection (6), provide the commission, within that
period, with the written statem ent referred to in subsection (4)(b).

(6) A person who has already provided the commission with an affidavit under section
16

specifying the basis fo r objecting to the production o f a document need not

p ro vid e a written statement under subsection (5)(b) o f this section concerning the sam e
docum ent.

(7) I f a person does not, within the specified period, comply with a request o f a
com m ission to submit a document fo r a determination under this section or to provide a
written statem ent under subsection (5)(b) —
(a) the chairperson o f the com m ission or, i f the commission consists o f only one
member, the sole m em ber may apply to the Court fo r an order directing the
person to comply with the request, and

 (b) on the hearing o f the application, the Court may make or refuse to m ake the
order.

(8) VVhiere_the conmussipn_determ ines Jhat_the.£Liyi^p£_or- the d u t o f co-ifkhiqic-H’v
relied on as z rouiic/.-j for t

to yroducc a_ document

r__to any nj the

infyrinr:rio'> in the document. the docum ent is not considered to,_ be_evidencejreceiyed_hy
the commission, except to the extent authorised under subsection (10).

(9) W here the commission determines that the privilege or duty o f confidentiality relied
on as grounds fo r refusing to produce a document applies to any o f the information in the
document, the commission m ay cause to be prepared a summary version o f the document
that excludes that information, but only if—
(a) the document so allows, and
(b) in the com m ission's opinion, it is in the interests o f both the investigation and
fa ir procedures to do so.

(10) Where a commission causes a sum m ary version o f a docum ent to be prepared in
accordance with this section, the sum m ary version fo rm s part o f the evidence received by
the com m ission.

(11) Where the commission determ ines that the privilege or the duty o f confidentiality
relied on as grounds fo r refusing to produce a document does not apply to any o f the
inform ation in the document, the docum ent is considered fo r the purposes o f this A ct to
have been received as evidence by the com m ission unless the determ ination is overturned
under section 22. [Emphasis added]

5.2

A nalysis o f section 21

5.3

In broad term s, section 21(1) provides that nothing in the Act com pels the disclosure
by any person o f any inform ation or docum ent that a person would be entitled under
any m le o f law to refuse to disclose on the grounds o f any privilege or any duty o f
confidentiality.

5.4

Section 21 (2) o f the 2004 Act provides that where a person claim s to be entitled
under any m le o f law to refuse to disclose any inform ation or to produce any

 docum ent on the grounds o f any duty o f confidentiality or on the grounds o f any
privilege, then the Comm ission may determine whether the privilege or duty o f
confidentiality applies to that inform ation or document.

5.5

Section 21(3) deals with the issue o f confidential infonnation whereas sections 21(4)(11) deal with the issue o f confidential documents.

5.6

Section 21(3) provides that where the Commission determines that the duty o f
confidentiality relied upon (as grounds for refusing to disclose inform ation) does not
apply to the infonnation then the person shall disclose that infonnation to the
Com m ission unless the determination is overturned by the High Court under section
22.

5.7

Subsection (4) provides that the Commission may only make a determ ination under
section 21 (2)(b) in relation to a document if the Comm ission has examined the
docum ent and considered a written statement provided by the person concerned
specifying the grounds for the claim including the privilege or duty o f confidentiality
relied upon.

5.8

Subsection (5) requires a person to submit the docum entation concem cd. This has
already been com plied w ith by the Stock Exchange.

5.9

Subsection (6) provides that there is no need to provide a written statement under
Subsection (5) (b) where an affidavit has already been sworn specifying the basis for
objecting to the production o f the document concerned. That is the case here.

5.10

Subsection (7) is o f no application, as the Stock Exchange has already provided the
docum entation and affidavit specifying the grounds for refusal to produce.

5.11

Critically, Subsection 21(8) provides that w here the Com m ission determines that the
duty o f confidentiality relied upon as a ground for refusing to produce to a document
applies to any o f the inform ation then the docum ent is not considered to be evidence
received by the C o i^ n issio n .

5.12

Subsection 21 (9) provides that w here the Com m ission detem iines that the duty o f
confidentiality applies to any o f the inform ation contained in a document, the

 Com m ission may cause to be prepared a summary version o f the docum ent that
excludes that inform ation but only if:
I.

The docum ents so allow.

II.

In the Com m ission’s opinion it is in the interests o f both the investigation and
fair procedures to do so.

5.13 Section 21(11) provides that w here the Commission detennines that the duty o f
confidentiality relied upon as grounds for refusing to produce the document do not
apply to any o f the inform ation in the document then the document is considered to
have been received as evidence unless th e detennination is overturned by the High
C ourt under Section 22.

6

A ssessm ent o f th e claim o f co n fid en tiality u n d er Section 118 C om panies Act 1990.

6.1

The Corrunission has had the opportunity to exam ine all the documentation and/or
infonnation provided by the Stock Exchange and set out in the second part o f the first
schedule o f the affidavit o f Daryl Bym e dated 17ltl December 2015. Mr Daryl Byme
has aven-ed in o f Paragraph 9 o f his said affidavit that the said documents comprise
and/or contain infonnation obtained by relevant persons within the m eaning o f the
Section 118 o f the 1990 Act, by virtue o f the exercise by the stock exchange o f its
functions under Part V o f the 1990 Act. Having inspected the docum ents and the
inform ation contained therein, the Conunission is in no position to dispute the
veracity o f that averm ent

6.2

In the circum stances, all o f the docum entation set out in the second part o f the first
schedule to the affidavit o f Daryl Bym e is covered by the provisions o f Section 118
(1) o f the Com panies Act 1990 and therefore cannot be disclosed (except in
accordance w ith law).

6.3

A ccordingly, the next issue that arises is w hether the persons refen ed to in Section
118 (1) o f the Companies A ct 1990 may lawfully disclose the infonnation contained
therein on the basis that they will be acting in accordance with law by producing the
sam e pursuant to a direction m ade by the Com m ission under Section 16 o f the
Com m issions o fh iv estig atio n Act 2004.

 6.4

U ndoubtedly, Section 16 (1) o f the Commissions o f Investigation Act 2004 gives a
Com m ission power, for the purposes o f an investigation, among other things, to direct
in w riting any person to send the Commission any document that is in the person’s
possession or pow er and is specified in the direction (Section 16(1 )(g)). In addition,
the Com m ission has extensive powers to direct witnesses to answer questions,
exam ine w itnesses on oath, direct witness to produce docum entation, etc. On the fact
o f it, and w ithout more, Section 16 would, in the view o f the Conunission, permit
relevant persons in the stock exchange to disclose to the Commission inform ation
obtained by virtue o f the exercise by the stock exchange o f its functions under Part V
o f th e C om panies Act 1990.

6.5

H ow ever, in the Com m ission’s view, Section 16 cannot be read alone. In particular,
Section 21(1) o f the Com m issions o f Investigation Act 2004 states that (subject to
subsection (4)) notim m in th is Act compels (a) the disclosure by any person o f any inform ation that the person would be entitled
under any rule o f law or enactment to refuse to disclose on the grounds o f any
privilege or any duty o f confidentiality, or
(b) the production o f any docum ent in the person’s possession or power containing
such information.

6.6

In the view o f the Comm ission, the w ording “nothing in this Act compels" m akes it
quite clear the pow ers contained in Section 16 are subject to provisions o f Section 21.
A ccordingly, the Com m ission m ust now determ ine w hether M r Daryl B ym e is
entitled under_a::y_rule o f Jaw_or .enactm ent to refuse to disclose the information on
the grounds o f any duty o f confidentiality.

6. 7

In the view o f the Com m ission, the provisions o f Section 118 o f the Companies Act
1990 im pose a clear statutory duty o f confidentiality o f the persons set out in
subsection ( 1) thereof.

6.8

A ccordingly, the C om m ission hereby determ ines that M r Daryl Byme is entitled by
virtue o f the provisions o f Section 118(1) o f the Com panies Act 1990 to refuse to
disclose the inform ation contained in the docum entation set out in the second part o f
the first schedule o f the affidavit o f Mr Daryl B y n e dated 17*11 N ovem ber 2015.

 6.9

As it appears to the Commission that all o f the information contained in the
docum entation set out in the second part o f the first schedule o f the affidavit o f Mr
Daryl Byrne dated 17lh N ovem ber 2015 is confidential pursuant to Section 118 o f the
Com panies Act 1990, there is no evidence contained therein of which the Comm ission
could usefully cause a summary version to be prepared in accordance w ith the
provisions o f Section 21(9) o f the Commissions o f Investigation Act 2004.

7.

R elated m a tte rs .
7.1

As stated above, Mr Daryl Byrne also objected to producing the docum ents referred
to in the second part o f the first schedule on the basis that they contain inform ation
w hich itself, or together with other information, is confidential and/or private, and is
accordingly subject to duties o f non-disclosure and maintenance o f privacy and
confidentiality by virtue o f statute, including the Data Protection Acts 1988 to 2003,
and otherw ise by law.

7.2

H aving regard to the Com m ission’s determ ination in relation to the claim for
confidentiality based on the provisions o f Section 118, Companies Act 1990, as a
result o f which, by virtue o f the provisions o f Section 21(8) o f the Comm issions of
Investigation Act 2004, such docum entation and the evidence contained therein
cannot be considered to be evidence received by the Commission, it does not appear
to the Com m ission that there is any purpose to be served by the Comm ission entering
upon a determ ination o f the additional claims to confidentiality o fM r Daryl Byme.

Dated: the 16lh day o f D ecem ber 2015.

Signed:1-

A

—

u

The H onourable M r Justice Brian Cregan
Sole M em ber