Inquiry takes Smurfit to task
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Your support makes all the difference.THE Irish industrialist Michael Smurfit suffered from 'a stated lack of recollection of a number of important and relevant issues' in the acquisition of property for the state-owned Telecom Eireann, according to an Irish government report on the affair.
Mr Smurfit was the chairman of Telecom in January 1990 when it agreed to pay Ir pounds 9.4m for a Dublin site it proposed using as an HQ. The previous year, UPH, a company in which he had a substantial shareholding, had paid Ir pounds 4m for the same site. In the interim, ownership of the property changed on a number of occasions.
Mr Smurfit resigned the Telecom chair last September at the start of an investigation into the deal. The first report of this inquiry shows the packaging tycoon took a hands-on approach during his tenure as unpaid chairman of Telecom.
A Smurfit adviser, Dermot Desmond, set up UPH in November 1988. Its main investment was the Dublin site.
The interim owners before Telecom's purchase used Cyprus and Channel Islands registered companies, which had the effect of disguising beneficial ownership.
In May 1989, Mr Smurfit had written to a number of estate agents, stating that he was looking for a site for a new headquarters for Telecom. In August 1989, Mr Desmond told his bankers that the company was a possible purchaser. The Telecom board had not yet discussed this site.
In September 1989, Mr Smurfit appointed himself to chair Telecom's superannuation committee. At his first meeting, he said he would propose a future development.
On 17 October, Mr Smurfit viewed the site and told his estate agent that Telecom would buy it. On 24 October, he wrote to Telecom's pension trustees asking them to buy. They refused.
In November, he decided that Telecom should buy the site, on the basis of calculations made 'on the back of an envelope'. He sought no professional advice on the deal.
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