LAND DEAL THAT SHOCKED A GOVERNMENT

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In light of current events, this is in my humble opinion is a very, very interesting story.

From the Sunday Mail January 26 1997

THE £9 million LAND DEAL THAT SHOCKED A GOVERNMENT

Rangers’ new “Goldfinger” Joe Lewis and Celtic director Dermot Desmond were both named in a report into a huge property scandal in Ireland.

The controversy led to an official inquiry and rocked the Irish Government.

It involved the £9.4 million purchase in 1990 by the state-owned Telecom Eireann of a disused bakery in Dublin as the site for a huge new HQ.

The storm broke after it was revealed that Telecom had paid an inflated price for the site which was previously owned by a company called United Property Holdings.

UPH was led by Desmond and among its shareholders was his friend Mr Lewis, who was listed as having 2.5 per cent. Michael Smurfit, the chairman of Telecom, owned 10 per cent.

Government inspectors at one time froze Mr Lewis’s shareholding in the firm, along with those of the other shareholders. When their report was issued, Desmond – a close friend of the then Irish Prime Minister Charles Haughey – was named as the main beneficiary of the controversial sale.

That’s a charge he has always denied.

The report of the inquiry, conducted by John Glackin, found that UPH had sold the bakery site to two offshore companies called Chestvale and Hoddle.

These firms passed it on to Telecom Eireann, and the total profit on the deals, concluded over 18 months, came to pounds 5.3 million, of which UPH made pounds 2.3 million. The ownership of Chestvale and Hoddle was never firmly established.

The Glackin Report said that it was Desmond, knowing that Telecom were looking for a site for a new HQ, who told Smurfit about the bakery site.

Glackin alleged that Desmond was the real power behind the companies in the bakery deals, and had been involved at almost every stage.

The report was scathing about Desmond’s involvement but cleared Smurfit, who had already resigned as Telecom chairman. It also probed the business affairs of some of Desmond’s closest friends.

They included flamboyant Irish gambler JP McManus – known as The Sundance Kid – stud-farm owner John Magnir, property developer Pat Doherty, and Isle of Man financier Colin Probets.

Both McManus and Magnir owned shares in UPH, along with Desmond and Lewis.

No criminal charges were brought, but the affair, it is said, soured relationships between Desmond and Irish Government ministers.

Desmond, a non-executive director with Celtic PLC and one of Ireland’s leading stockbrokers, strongly denied any wrongdoing and felt he had been treated badly by the Dublin Government and the media.

Desmond, who ploughed pounds 4 million into Celtic’s share issue, is a close friend of Lewis, whose company last week injected pounds 40 million into Rangers.

The controversy over the bakery site was one of several business scandals which eventually led to Haughey’s resignation.

Mr Lewis, who is a renowned recluse, did not give evidence to the inquiry, though it is said Mr Glackin wanted to discuss matters with him.

A Dublin financial insider said: “The feeling now is that Desmond has been telling Lewis all about the success of his Celtic shares and that Lewis wants some of that action.

“They’ll see Celtic and Rangers as part of a European league set-up and a chance to be big players in European football.”

Charismatic Desmond built up NCB, his Dublin stockbroking, firm until he became, by the late ’80s, the city’s foremost dealmaker.

But in 1991, in the wake of the Telecom HQ affair, he stood down as chairman of NCB and resigned from the state airports authority.

His friendship with Mr Lewis, though, is as strong as ever.

The business giants often play golf together on courses all over the world.

Desmond has always rejected the Glackin Report, which he believes tarnished his good name.

Since the report, he has gone from strength to strength, showing his business skills with interests in Celtic, an aviation firm, and selling a computer software firm for pounds 20 million.

Here is a link to the Glackin report with .pdf of said report

http://thestory.ie/2010/10/13/the-glackin-report-final-part-1/

 

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