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Blog: What can we learn from SiteServ's share register?

THE NOTION of opening up the share register of SiteServ – to allow a full and transparent inspection...
TodayFM
TodayFM

9:24 PM - 28 Apr 2015



Blog: What can we learn from S...

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Blog: What can we learn from SiteServ's share register?

TodayFM
TodayFM

9:24 PM - 28 Apr 2015



THE NOTION of opening up the share register of SiteServ – to allow a full and transparent inspection of the beneficiaries of its €5m sale – was a commendable and worthy one.

Sadly, the execution of that idea was anything but.

The reason we all wanted to see the share register is because of a weekend report in the Sunday Times which pointed out the unusual volume of trading in SiteServ shares in the run-up to the company’s assets being sold. Here's an excerpt from that report:

A Sunday Times analysis has found a sharp increase in the number of shares traded in November 2011, days before the first bids were received for the company. A total of 6.4m shares changed hands that month. Just 121,000 shares had been traded a month earlier, while between January and October 2011, the total volume of shares traded was 4.76m.

The natural suspicion from reading this is that someone may have been building up a huge chunk of shares in the company, knowing that one of the bidders was going to pay a far higher price. And given how angry the public are that a company’s shareholders (i.e. owners) got €5 million for a firm which was in danger of total collapse – when that money could have gone to repay the state-owned IBRC instead - it’s only correct that this be addressed by releasing a full list of the shareholders.

If an average of 476,000 shares changed hands in a regular month, a turnover of 6.4 million shares would suggest that a single buyer (or a small group of them) had intervened in the company to buy 6 million shares, just under 5 per cent of the company. When Millington took over the firm in March 2012, that portfolio of 6 million shares would be worth €235,000. It would have cost just €60,000 to buy the same stake two months earlier.

The original assumption was that the full, full list of shareholders would be released publicly – so that the public would be free to inspect the details from their kitchen tables, and identify who had bought their shares and when.

What instead emerged was an email to newsrooms from SiteServ’s receiver (and the man who’s overseeing the IBRC review), Kieran Wallace of KPMG. He informed those newsrooms that the database “cannot be sent electronically due to its size and the way it is held but [would] be available for physical inspection”. However, because it was only available on one computer, each journalist could only be given 30 minutes of access to the records.

Tom Lyons of the Sunday Business Post was one of the first to make his booking and get access. What he found wasn’t inspiring.

The records were being held on a computer in an office in Sandyford, by a firm called Computershare. (The name seems a little ironic in this case, given there was apparently no way to share the records from this computer.) The software used to view the register was designed around the turn of the century and only allowed viewers to read 17 records at a time.

As Tom later posed on Twitter, there appeared to be no way to conduct a proper search of the records – by date, name, size, value, or anything of the sort. While a reader could see who owned a given number of shares at a particular time, you would need to write down every single record, and piece them together later, to construct a timeline of who bought shares in November 2011.

Frustratingly, only a couple of journalists got in to see the records before Computershare kicked up a fuss about journalists taking photos of the records, and photos were then banned too. This didn’t seem to make much sense, as they had no problem allowing us to write down those details anyway.

This was obviously a useless exercise and so Wallace then agreed to make the records available in hard copy – in KPMG’s offices on Harcourt Street - so that they could be examined in a less cumbersome way. Journalists would be givne as much time with the records as they wanted – but there was a catch: this time photography was expressly forbidden (we were supervised for the entire time we held the records) and we weren’t allowed to keep the records.

And it was only when arriving at the KPMG offices that one could realise the major flaw with the records we were receiving: they only showed the shareholdings at the time of liquidation. Though you might be able to find out who the beneficiares were of Millington’s €5m buyout, you wouldn’t be able to find out when each shareholder had bought their stock. So, any hope of tracing the buyers behind the spike in November 2011 was immediately dashed.

The records presented to us were on A3 sheets, with about 60 rows on each – a shareholder’s name, address, postcode, and the number of shares they owned. I counted 609 shareholders – around half of which were anonymous. That’s because their shares were held in what are called ‘nominee’ accounts: where an investor buys their shares through a stockbroking firm which then holds them on their behalf, rather than passing them directly back on to the buyer. This is usually done purely for convenience – and sometimes because the buyer is a pension fund, rather than a human being – but it’s sometimes used to withhold the identity of the buyer.

Davy stockbrokers had advised SiteServ on its sale process. As it happens, 61% of SiteServ’s shares were held by anonymous Davy clients.

All in all, the register doesn’t tell a whole lot. Almost all of the major shareholdings on the ‘final’ share register match those mentioned in Davy’s prospectus, a page of which was released as part of Catherine Murphy’s Freedom of Information request:

And, unfortunately, there the trail runs cold.

Unless a copy emerges of a separate share register from before November 2011, it will remain impossible to know the identity of the mystery traders who built up such a huge arsenal of stock that turned out to be so profitable afterwards – and who made a tidy profit by investing in a company that was veering towards bankruptcy, and which owed €150 million to a taxpayer who’ll never get most of it back.



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