Inside the world of business

Key questions still to be answered at Superquinn

THE HIGH Court will decide this week whether to appoint a receiver to Superquinn or let Musgrave’s proposed purchase of the supermarket chain proceed. But there is much legal argument to conclude before that happens. Yesterday the attention in Court 14 turned to the Superquinn directors and the question of who exactly brought the petition for examinership.

The reason behind such necessary legal nit-picking is the confusion surrounding the issue. In many ways this is the nub of the issue – the obvious question is why the directors did not petition for examinership last Monday, and why the U-turn during the week.

The fact that the directors may be cross-examined in the court today may help to shed some light on the issue.

The decision by at least some of the directors of Superquinn to present a petition for examinership late last week, which was welcomed by many as being well-motivated, paradoxically raises questions about the performance of the management and directors of the company who failed to act on time.

Clarification about what exactly happened at that meeting last Monday would be welcome in order to facilitate a balanced debate about what the next step should be for Superquinn.

Boucher may see fresh opportunity

RICHIE BOUCHER must be tempted to try to prolong his tenure at Bank of Ireland following the securing of outside capital for the bank. And his board and shareholders might be tempted to back him since the injection will see the State remain a minority shareholder.

The size of the Government’s stake is not directly relevant as the Minister for Finance has made it clear that he wants to see all the boards of the banks that have received State help refreshed. Boucher will also have to pass the the Central Bank’s fitness and probity tests, which will look back at his role in the bank’s problems as well as the part he played in fixing them.

But the argument can be made – and presumably will be – that the new investors are backing current management and forcing Boucher out now might be counterproductive. The size of their stake should entitle them to board representation and thus the chance to influence events.

However, the bank would be ill-advised to take on the Government while it is still dependent on the support of the Central Bank and the European Central Bank.

True independence, and with it the right to thumb your nose at the Government and the taxpayer, will only come when Bank of Ireland is able to source funds in the market and repay the ECB.