Inside the world of business
Wallace case closed - for now - as Cork TD seeks answers
THE SUMMER season, if it can be so-called, is coming to a close and the political temperature already shows signs of rising.
Yesterday brought news that the outgoing Director of Corporate Enforcement, Paul Appleby (who is spending his last day in office today), has told Fine Gael TD Tom Barry that he does not, as matters stand, intend investigating the compliance or otherwise of independent deputy Mick Wallace with company law in relation to his role as director of MJ Wallace Ltd.
The Wexford TD’s company, as most people know, made a settlement with the Revenue earlier this year in relation to a VAT liability which, along with interest and penalties, amounted to €2.1 million. Wallace told this newspaper that he had knowingly filed false VAT returns when he found his company was coming under pressure.
The accounts for the company in 2008, when it first recorded a substantial loss, show the directors doubled their remuneration €148,141 to €289,605. The directors are Wallace and his son.
Barry wrote to Appleby on August 1st asking what powers he had to investigate Wallace’s actions as director. Appleby has replied that, as matters stand, he considers the issue to be one to be handled solely by the Revenue. “While I have no right of general access to company books and documents, I am permitted to do so where certain circumstances prevail,” Appleby said.
He did not propose at this time to investigate MJ Wallace but this decision would be reconsidered if new information relevant to the Companies Acts came to light.
Barry intends to write to Appleby’s office again to press the matter further. He believes Wallace should be investigated by the ODCE. Wallace told The Irish Times yesterday he has no doubt he will be treated “the same as any other citizen” by the relevant authorities.
Eason opens four new stores under its franchising policy
ON A day when the comings and goings of Independent News & Media’s board of directors again took centre stage, former INM chairman James Osbourne – voted off the board in June – must be grateful to be out of the fray.
Meanwhile, one of his other main business interests – Eason book stores, where he is chairman – was the source of some positive news yesterday.
The announcement of the opening of four new stores may not be earth-shattering, but in the current economic climate, it’s not to be sneezed at.
Eason has been hit with the twin challenges of a depressed retail environment, and unprecedented challenges to the book trade, mainly from social media.
Unsurprisingly, the company reported a 10.7 per cent decline in revenue last year and a widening of losses to €5.3 million, though most of this was due to restructuring costs, with the company posting a €4.4 million profit at an operating level.
Nonetheless the company is in expansionary mode, underpinned by a €20 million investment in the business.
Since the appointment of Conor Whelan as managing director – the first real outsider to take the helm at the family-owned firm – the company has aggressively cut costs, closing unprofitable stores, such as its site in Talbot Street in Dublin, implementing redundancies and focusing on reinvigorating the brand.
Crucial to its growth trajectory has been a focus on a franchise model.
The opening of four franchise stores this year means more than a third of the company’s 60-odd stores in Ireland will be franchises by the end of the year – evidence of the power and commercial potential of the 125-year old brand.
Coincidentally, yesterday also saw the opening of the first Ecco shoe franchise store in Ireland, in Dundrum shopping centre, with the company outlining plans to open further franchise stores in Ireland over the coming months.
With consumer sentiment still in the doldrums and privately-held family businesses such as Clery’s feeling the heat, Eason’s forward-looking ethos is heartening both as a measure of the economic pulse of the nation and a reflection on the literary appetite of consumers.
Who said the book is dead?
Contortions over property tax
IT IS difficult to say which is the more worrying – the fact that the Government has yet to decide the shape of a property tax that it is expected to have up and running in the next few months or the idea that it is playing cute with those bailing us out of our economic malaise.
The latest update on the progress of Ireland in meeting the terms of its EU-IMF bailout, published at the end of last week, said that Ireland would introduce “a value-based” property tax as part of revenue measures to raise at least €1.25 billion next year.
The report had hardly landed on the desks of European Central Bank president Mario Draghi and International Monetary Fund director general Christine Lagarde than Ministers – most notably from Fine Gael – were taking to the airwaves to explain that no decision had yet been reached and that there was no agreement on a “value-based” approach.
Even last night, Minister for Finance Michael Noonan was saying that nothing had been agreed except that there would be a tax and that it would be collected by Revenue.
So, are the IMF and ECB to understand that commitments in writing from the Irish State are worthless?
If so, how does that chime with the oft-quoted aim of persuading markets of our good faith in an effort to return to a position where we can raise our own funds?
Given that the State is supposed to start imposing any property charge from next January, how is the EU to read our lack of agreement even on its basics?
Indeed, what prospect is there of the tax being collected at all in the limited time available for decision – and if not, what then?
Today
Further pointers to the health of the economy will come today with retail sales figures for July and the latest monthly consumer sentiment index.
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