The Irish Independent reports that financial
outsourcing company Capita plans to double its Irish workforce to 1,600 over the
next three years, tapping into demand from Irish banks and global investment
The total includes 265 jobs that Capita needs to fill this year after winning
a contract from the National Asset Management Agency (NAMA) to manage loans with
a face value of €41bn.
These loans were managed by IBRC before the bank was put into liquidation.
The jobs will be created in Dublin, Maynooth and at a new call centre at a third
location outside the capital. Growth is expected to come from a mix of organic
growth and takeover deals.
The ambitious plans were announced as the Finance Minister, Michael Noonan,
officially opened Capita's new 45,000 square-foot offices at the new Grand Canal
Square development in Dublin's docklands.
"The scale and ambition of the company's investment in Ireland, and the
announcement of their plans to employ 800 more people over the next three years,
is a major vote of confidence in Ireland," Mr Noonan said.
UK-owned Capita has been in Ireland since 2003.
Around 70pc of the current staff are professionally qualified and have specific
New recruitment is expected to include qualified- and part-qualified
accountants, people with banking experience, surveyors and call centre staff.
Capita has become best known in Ireland for managing billions of euro of loans
on behalf of NAMA and other banks.
That part of its business is expected to grow because US funds that are snapping
up assets from banks here need local partners to manage the loans day to day.
Capita in Ireland also provides "back-office" support services to the pensions,
asset managements and international financial services sectors.
As well as the new Dublin jobs, it has opened a US sales office in New York to
win business from the global names that dominate those sectors.
Included in the 800 jobs total are plans to establish a new business process
centre, or call centre, that will focus on winning outsourcing contracts from
That will be a new departure for Capita here but is the main business of its
UK-based parent, which holds a contract to collect the BBC licence fee formerly
held by the British Post Office, for example.
The Irish Independent also reports that Google stood
accused of using "devious" techniques and "unethical behaviour" to avoid paying
tax in Britain, adding fuel to a debate on how companies pay corporation tax
that could have huge implications for Ireland.
Google's Northern Europe boss, Matt Brittin, was called back to testify to
the British parliament's powerful Public Accounts Committee (PAC) after reports
suggested the company employed staff in sales roles in London, even though he
had told the committee in November its British staff were not "selling" to UK
clients and most sales were made out of Ireland.
Mr Brittin said the firm was being investigated by the UK tax authority in
relation to transfer pricing of services traded between Google UK Ltd and other
Google companies, but added that he believed Google fully complied with UK tax
He also denied misleading parliament in November, when Mr Brittin told the
PAC: "Nobody (in the UK) is selling." He said all UK sales were conducted by
Google Ireland and UK staff were only involved in promotional activity.
That arrangement allows Google to shelter most of its income on UK sales from
taxation, since Google Ireland sends most of its turnover to an affiliate in
Such a structure is common among multinationals operating here and makes
Ireland a very attractive base for them. If this structure is undermined, it
would remove a key selling point for Ireland as a destination for overseas
The committee, however, challenged his November testimony and comments
Committee chairwoman Margaret Hodge said Google was not living up to its
original motto of "don't be evil".
"You are a company that says you do no evil, and I think that you do do evil
in that you use smoke and mirrors to avoid paying tax," she said, adding that
the company engaged in "devious, calculated and, in my view, unethical
A Reuters report revealed that Google advertised for staff in London to
"close" deals and that LinkedIn profiles of dozens of staff claimed they engaged
in such work.
Ms Hodge said the PAC had also been approached by whistleblowers
who had said they had worked for Google in London, selling advertising.
On Thursday, Mr Brittin said UK staff did offer discounts to
customers to encourage them to buy and that the staff were remunerated
partly by commission on sales, but he said the fact Google Ireland was the
legal counterparty on trades meant his November comments were not
"The UK team are selling, but they are not closing."
Google's auditor, Ernst & Young, was also called to give evidence.
John Dixon, head of tax policy at the firm, said there was a grey area
between promoting products and concluding sales in Britain, which would,
most likely, create a taxable presence for a company in London.
He declined to say whether Google's arrangement was consistent with
not having a tax presence in the UK.
Corporate tax avoidance has become a major issue in Britain, where
there are concerns over rising government debt and accusations that the UK
tax authority has adopted a light-touch to taxing big businesses.
From 2006 to 2011, Google generated $18bn (€13.5bn) in revenues
from the UK, according to statutory filings, and paid just $16m in taxes.
The Irish Times reports that
a company of developer Johnny Ronan has won its High Court case aimed at
ensuring the annual rent for the Medical Council’s new headquarters in Dublin
does not fall below €820,000, although the market rent for the property is about
Mr Justice Iarflaith O’Neill ruled yesterday the upwards- only rent review
clause in the council’s 20-year lease for its Kingram House headquarters off
Fitzwilliam Square is not affected by a law banning upward-only rent reviews for
The 20-year lease dates from January 2013 but provision for it was part of a
complex series of transactions agreed in 2008 between Tanat Ltd and the council
concerning the premises. The council had argued it was entitled to the benefit
of section 132 of the Land and Conveyancing Law Reform Act 2009, the law banning
“upward-only” rent review clauses in leases for business premises which came
into effect in February 2010.
The judge said section 132 was not intended to have retrospective effect and
accepting the council’s arguments would mean it would be insulated from losses
it would have experienced, following the collapse of the property market, under
the agreements between it and Tanat.
Those agreements had valued Kingram House at about €20 million when valuations
based on market rents in December 2012, with upward and downward review clauses,
were about €5 million.
Upholding the council’s arguments would interfere in a very material way in the
complex set of contractual arrangements made between the sides aimed at the
council acquiring Kingram House and amount to “impermissible retrospective
interference” with existing and vested property rights, the judge ruled.
A 2008 agreement between Tanat and the council concerning options for the
property included a put-and-call option agreement for a 20-year lease dating
from January 2013.
Section 132 states that the ban on upwards-only rent reviews does not apply to
agreements for property leases for business purposes entered into before the
section came into effect in February 2010.
Mr Justice O’Neill ruled that the put option in the 2008 Kingram House agreement
amounted to an agreement for such a lease and therefore section 132 did not
apply. Earlier, he noted that Kingram House was the only asset of Tanat, whose
shareholders are Mr Ronan and Peter Conlan.
Tanat bought Kingram House in 1989 for €883,000 and carried out significant
redevelopment costing €2.5 million and retaining the original Georgian building
to the front, which had been a school attended by Oscar Wilde.
The council was in 2006 seeking a new headquarters and wanted to buy Kingram
House but Tanat was unwilling to sell, mainly because that would involve a
capital gains tax liability of €2.7 million. Distribution of sale profits to the
shareholders would also mean a substantial income tax liability for them and
Tanat also preferred to hold on to the building and let it on a long lease.
An alternative proposal to sell the shares in Tanat instead of the building had
significant tax advantages for both sides as the Tanat shareholders would avoid
income tax liabilities, while the council also stood to make €3.45 million tax
savings. After it emerged that the council would have no power until a new law
came into effect in July 2008 to acquire the Tanat shareholding, the sides in
March 2008 entered into an agreement.
The Irish Times also reports that
Belgian bank KBC expects to record loan loss impairment charges of €300 million
to €400 million in 2013, group chief executive Johan Thijs said yesterday on the
publication of its first-quarter results.
The bank’s Irish subsidiary booked a loan loss impairment charge of €99 million
in the quarter. This was lower than the €195 million recorded in the same
quarter of 2012 but up on the €87 million impairment in the previous quarter (Q4
KBC Bank Ireland made a loss of €77 million in the three-month period due to the
high loan loss provisioning. This accounted for the bulk of the €87 million loss
made by KBC’s international markets business unit. Hungary and Bulgaria were
also loss-making but it made a profit of €17 million in Slovakia. Belgium was
most profitable, recording a surplus in the period of €385 million.
KBC posted a group net profit of €520 million for the first quarter of 2013, up
from €380 million a year earlier.
The Irish Examiner reports that there
was an 11% increase in the seasonally adjusted trade surplus for March to
€3.489bn, although the headline figure masks underlying trends that could cause
There was a seasonally adjusted increase in exports of €272m to €7.287bn in
March compared with the previous month, although there was a €680m decrease
compared with the same period last year.
The ‘pharma patent cliff’ was one of the reasons for the drop-off in exports
over the past year.
“Within the data we see that of the nine principal export categories, only two —
food and beverages and tobacco — recorded positive year-on-year growth in the
first quarter. Particularly weak performances were recorded in chemicals and
related products (-11.4% y/y; driven by a 16.7% fall in organic chemicals and a
13.6% decline in medical and pharmaceutical products) and mineral fuels (-70.2%
y/y),” said Investec economist Emmet Gaffney.
Over half (57%) of all exports go to the EU and 26% to the US. The value of
imports fell by €858m to €4.129bn between February and March. The biggest
decrease in imports was in the transport equipment sector, including aircraft.
There was also a big decrease in the import of medical and pharma products.
Two thirds of imports came from the EU, 10% from the US and 6% from China.
However, the EU remains mired in recession. According to figures released on
Wednesday, the eurozone has posted six consecutive quarters of economic
“We must use the EU presidency to move rapidly on a stimulus package to get
growth back into industry and consumer markets,” said president of the Irish
Exporters Association (IEA), John Whelan. “We must also look to cutting the
Irish cost base on an urgent basis to assist export competitiveness utility
costs; waste removal costs, general services cost are significantly higher than
in the UK”
“Services exports are not covered by today’s CSO release. These grew by 8% in
the first quarter, and will be the main driver of export growth again this year.
However, manufacturing export companies created twice the number of added jobs
in the economy, as do services export companies, and hence the urgent need for
added support for the manufacturing sector,” he added.
Merrion Stockbroker economist Alan McQuiad is forecasting a 4% volume increase
in the exports of goods and services this year, “but with the risks to the
downside, especially as the sluggish external demand conditions which acted as a
drag on the performance of merchandise exports last year are likely to persist
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