02.10.08
ESOT at the cabinet table
Well they must be. Why does these guys get such unbelievably favourable treatment from the government?
This story in the Business Post tells us…
“The government is to change the law for the second time in seven years to facilitate the improved tax treatment of Eircom’s Employee Share Ownership Trust (Esot).
The change will allow the Esot to repay its loans ahead of schedule, a move that under existing legislation would have severely curtailed the trust’s ability to make tax-free distributions to its 14,000 members.
The Esot has handed out almost €600 million tax-free to its members since it was set up following Eircom’s privatisation in 1999. It owns a 35 per cent stake in the company.”
Some history
“Cowen’s predecessor, Charlie McCreevy, previously changed tax laws to allow the Esot to join forces with Tony O’Reilly’s Valentia consortium, which bought Eircom in 2001.
McCreevy took just seven days to agree to the change after receiving a request from the Esot’s tax advisers, which said the take-private deal would fail in the absence of his intervention.”
As I recall someone else wanted to buy Eircom at the time. Oh yes, my former employer Denis O’Brien. He lost out to Sir Tony, who along with the Unions was determined to keep DOB out. And they were aided and abetted by FF who CHANGED THE TAX LAW to help them do it. I wonder how much DOB has given to FF in the past? Is he still giving?
P O'Neill said,
February 11, 2008 at 1:29 am
One interesting test would be if the Aer Lingus employees needed a concession from the government to join their shareholding with a hostile bid for the company.
Joseph said,
February 11, 2008 at 8:11 pm
it could be worse
paul said,
February 27, 2008 at 9:24 am
i cant understand why such begrugdery exsist amoungst people when a group of workers in this country achieve a wonderful deal like the workers in eircom did . surely we, in the private sector should be hoping our unions can get something similur for the rest of us and wish the eircom people well . there was no critisim when o brien walked away with 250 million and now does not even pay tax in this country
Sarah said,
February 27, 2008 at 9:37 am
1. They made the money on an asset that the taxpayer owned twice over, first through our taxes and secondly when we bought shares
2. They went in League with Tony O’Reilly and subsequently others who stripped the company of its capital (and put plenty in their pockets) while the customer (the same customers whose taxes and share purchases had created the company) suffered because there was no investment in infrastructure.
O’Brien created something new from fresh capital and delivered new jobs and a new service. Eircom took what was ours, fired people and starved us of service.
Justin Mason said,
February 27, 2008 at 11:01 am
wow, paul.
‘i cant understand why such begrugdery exsist amoungst people when a group of workers in this country achieve a wonderful deal like the workers in eircom did’
As Sarah said — they made that money *at our expense*. The Eircom privatisation was core to the disaster that is Ireland’s broadband situation, and we have all suffered because of that.
paul said,
February 27, 2008 at 2:16 pm
the goverment has NOT been asked to change the tax laws again to facilitate eircom e s o p the sunday business post got it wrong this provision of a 38, 0000 thousand payout was already there and could be utilised by the trustee anytime after year 10 of the inseption of e s o p this was agreed by revenue in year one .it is a matter for e s o p trustee wether or they will make on appropriation of that amount or not it is entirely up to them they will only do so if prudent but there is no guarentee also the business post have , i am told achknowelged their mistake and rectified it admitting that there is no change to the curant position of the e s o p s trustee
Electron said,
February 27, 2008 at 2:47 pm
Everybody knows that O’Reilly has FF in his grasp – he bought them out years ago and if they don’t play ball, he’ll give them hell. He’s a scourge – even from way back when he engineered the takeover of Erin Foods for the advancement of his own career – he likes using state assets to enrich himself. O’Brien, on the other hand, pulled himself up using his own bootlaces and unlike O’Reilly, built an asset from scratch. He then sold to it to an outside interest which meant that there was a net inflow into the country. O’Reilly simply took a former state asset, stripped it to the core and then took the gains out of the country. It’s great to see that O’Brien has his measure and hopefully he’ll oust him from that perch soon – it’ll be goodbye and good riddance at last.
paul said,
February 29, 2008 at 3:22 pm
in defence of eircom , this company and indeed going back as far as when if was the dept of post and telegraphs has given employment to countless people all down through the years , provided families with a solid income . people like d.o b jumped on the band wagon just wanting to cherry pick the business got his dodgey licence for a song from his good pal mick lowery and then took off to warmer climates with his 250 million in his pocket he created something new and fresh alright a way to avoid paying tax while he nestles in the sun . also in relation to the shares that people bought in eircom and who lost money on them , there is no gaurentee that you will make a money in them , if you go in to a bookmakers shop and you back a horse at board prices , you cant go crying to the bookmaker if your horse wins at ten to one if you accept a price of five to one