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INVESTMENT LOSSES AT the State’s export development agency more than quadrupled last year to €16.8 million, company accounts released this week reveal.
The same figure for 2012 was €3.8 million.
The vast majority of the loss was attributed to investor companies that were in liquidation or receivership, accounting for €10.67 million of the total.
The remaining losses were accrued when investor companies were sold for a lesser valuation than had been the case when EI originally sank funds into the outfit.
Total losses on shares acquired in client companies added up to €18.7 million, but the blow was somewhat softened by a €1.8 million profit on the company’s seed and venture capital funds, although this was down from €6.1 million in 2012.
At the end of 2013, the agency had just over €152 million in shares across client companies, and €117.8 million in seed and venture capital funds.
The state agency has a mandate to invest and support jobs in early-stage companies.
Picking a winner
Enterprise Ireland chief executive Julie Sinnamon defended losses at the agency during the week, saying that “if we could at the very start pick the companies that weren’t going to make it, it would be a terrific situation”.
She argued that the percentage of losses and write-offs in the EI equity portfolio relative to the norms of the start-up sector were in fact very low.
As a development agency we have to accept that there will always be a level of failure in start-ups.
Director linked companies
A total of €27.2 million was approved last year in supports to companies that have links to one of Enterprise Ireland’s board members, compared to just €5.2 million in 2012.
In a note accompanying the financial statements for the year, EI state that “in cases of potential conflict of interest, board members did not receive board documentation on the proposed transaction nor did the members participate in or attend discussions relating to the matters.”
Financial support actually paid out to the companies during the year only came to €271,000, compared to €3.5 million for 2012.
The Enterprise Ireland board is headed up by former KPMG managing partner Terence O’Rourke, who received a fee of €8,022 for his board membership in 2013.
The highest fee paid to a board member was €12,427 to Hugh Cooney, who also retired from the board last year.
Incoming chief executive Julie Sinnamon was paid €25,354 for four months’ work, having taken up the post at the end of August.
Outgoing chief executive Frank Ryan was paid €158,102 in 2013, and received a company car allowance of €11,585.
Last year was a record year for Enterprise Ireland, with client companies achieving €17.1 billion in export sales.
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How can any board member have links to a company who get €26.2 million from Enterprise Ireland?
Who is the board member, what company is involved, how was he/she appointed and what process is followed in order to allocate such funding?
This seems at best a little odd but appears a lot Irish.
In that Note to Financial Statements it would add to level of transparency if mention was made of precise number of companies in question, for that board member seeking support, and how many related applications were successful.
A nod being as good as a wink to a blind horse scratching against a Chinese wall…and all of that.
EI is just another quango! Its very east to play the VC card on the losses staring that not all businesses are successful etc etc…
Problem being that the majority of EI people are public servants who do not have the expertise to invest but of course as with all quangos they think they know!
Nothing new here…
My my, record investment, record jobs creation? I suppose its not to bad €262 lost for every one of the alleged 61k jobs this government claims to have created.
But the job was created. The employee is still getting paid. So what’s your point? Other than showing you can divide 16.2m by 61,000. And even if as you say it cost E265.00 to create the job (which is nonsense by the way) it’s a tiny cost when compared to the benefit of being in work. But you keep pissing on progress and bitching about it. You’ll feel better I’m sure…
‘Another record year’ is the stuff of acclamation at a sports day in a play school – an intellectually lazy episode of group think and political self indulgence. Did Enterprise Ireland publish performance target in advance and, if so, were these achieved? If they did not publish targets, why not? With respect to potential conflict of interest – ‘not receiving board documentation or participating in a discussion’ is clearly not an inhibition to insiders obtaining substantial State loot, but merely offers the appearance of a sterility, in much the same way as the Public Appointments Service is the all-purpose Jeyes Fluid disinfectant that is splashed on senior public sector job vacancies by politicians requiring camouflage, while attempting to hunker as being credible and being worthy of loyalty.
Is Julie only going to get €76k per annum when the outgoing yob who pocketed €158k actually presided over those losses?
And the companies backed by EI do 17 BILLION in sales… Are you all blind? You are moaning and groaning about stupid little points when the truth is that this agency actually works and assists irish companies getting off the ground and becoming global players.
We need more state initiatives like enterprise Ireland.
I’m not blind at all. Just asked a few simple questions regarding transparency.
I think it is important to know simple details about who is on the board and who appointed them.
As regards having a director on the board who’s company (s) seemed to benefit to the tune of €27 million i find that a little odd.
This country needs Enterprise Ireland to function well but in an ethical professional manner.
No one company got the 27Million according to the article, It was a number of companies and a number of board members.
The question is what constitutes a conflict of interested according to Enterprise Irelands Code of conduct. If it’s a close relationship then perhaps more information should be supplied. but if it’s a case of knowing someone then (welcome to ireland where everyone knows everyone) I would expect the board to be using there networks to encourage companies to apply for funding and the like.
Dont forget the many companies that are moving to Ireland ANYWAY nor the indigenous start-ups who have little choice…these all contribute to EI “success” numbers… The majority of people working in EI have not been in business…need entrepreneurs not wannabe’s in these quangos…
@ Don Pleas: agreed. Some of the commentary on here is idiotic – I’ve seen EI workings and they are an excellent organisation. You have to look at the returns against the losses – the numbers are actually very good. People and organizations with the balls and mandate to put up funds know that 6 or 7 of every 10 will fail; 2 or 3 will prob. achieve mediocre results and tick over and 1 will be a stellar success. It’s just that you don’t know at the outset which companies will be in which category, thus you HAVE TO invest in a broad range of people and ideas.
Another kenny and co scam
Glass walls ❗️
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