BAD LOANS WERE LEGALLY HIDDEN AS LENIHAN MADE PLEDGE - On January 1 2005 the European Union imposed accounting rules on Irish banks containing a significant but simple flaw that had an impact on the fatal decision by the Irish government in 2008 to give Irish banks a blanket guarantee. The Irish Times says that the flaw allowed banks to conceal substantial losses on troubled loans. It reversed the pre-2005 rules under which banks were forced to recognise immediately, losses on bad lending. From 2005 onwards banks were required to wait until the borrower admitted difficulty before recognising the loss. Often the gap between when the problem first arose and the borrower's admission ran into years, making the bad loan figures in banks' annual audited accounts potentially misleading. Most people were unaware of the flaw, including perhaps Brian Lenihan when he reached the decision to effectively assume the losses of Irish banks based on, among other things, the bad loan figures in their accounts. One piece of work in particular that was relied upon by the authorities was the independent assessment of the banks losses by PricewaterhouseCoopers in 2008. PwC declined to comment for this article for reasons of client confidentiality so it remains an open question as to whether the government took a catastrophic mis-step because it relied on figures prepared under flawed accounting rules.PwC did emphasise the limitations of its report and challenged Anglo's own assumptions. Lenihan also had a number of other advisors apart from PwC.
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BANKRUPT NAMA DEVELOPER BUILDS LAVISH MANSION - Bankrupt property developer Ray Grehan flouted planning laws when he built his lavish mansion, the Irish Independent can reveal. The builder, who owes almost €300m to NAMA and has filed for bankruptcy in the UK, was initially granted permission to build a relatively modest two-storey home just outside Maynooth, Co Kildare. However, he never built the house and instead later reapplied for planning permission to build a much larger house on the same site. Mr Grehan began construction using the new plans before Kildare County Council granted permission for the changed design. The new house was more than 1,000sq ft larger than the original design approved by the council. One official who inspected the site prior to planning approval found it to be "near completion" and called the development "a blatant breach of planning laws". But despite this the developer was allowed to keep the new design after securing planning retention. Mr Grehan was a leading light of the boom years, setting a Celtic Tiger-era record in 2005 when he purchased the two-acre Veterinary College site in Ballsbridge for €83.7m per acre. He filed for bankruptcy in the UK on December 30, using a London address.
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BITBUZZ REPORTS 26% YEAR-ON-YEAR RISE IN REVENUE - Irish wireless broadband company Bitbuzz has reported a 26% year-on- year revenue increase - to just under €1.5m - for 2011, with its subscriber numbers up by 43%. The Irish Examiner says that the Dublin-headquartered company, which also has offices in Belfast and London, recorded revenues of €1.487m last year, compared to a figure of €1.1m in 2010. As of the end of December, the company had a total of 610,000 registered users in Ireland and Britain. This was up by 43% on the 355,590 registered at the end of the previous year. Bitbuzz's management attributed the growth - specifically in registered users - to the increased popularity of smart-phones here and in Britain. Smart-phone users now represent as much as 40% of the company's total wi-fi usage. "We are pleased with the figures for 2011 and it is encouraging to see our business grow again, despite the uncertain economic climate. The growth in user numbers shows that the demand for technically superior, safe Wi-Fi is still increasing; despite economic uncertainty. We predict that in 2012 this trend will continue." said Shane Deasy, the company's managing director.
