Dermot Desmond

Dermot Desmond is an Irish businessman and financier.[1] He is estimated to be worth €2.04 billion and is ranked by the Sunday Independent as the ninth-richest person in Ireland.[2]

Dermot Desmond
Born (1950-08-14) 14 August 1950
Macroom, County Cork, Ireland
OccupationLargest individual shareholder within Celtic Football Club
Net worth€2.04bn (2018)
Spouse(s)Pat Desmond
Children4

Early life and education

Desmond was born in Macroom, County Cork in 1950 and grew up in Marino, Dublin. He was educated at Scoil Mhuire, Marino and Good Counsel College in New Ross. He left school in 1968 to work at Citibank in Dublin.[3]

Business career

In 1968, Desmond's business career began with Citibank in Dublin, followed by Pricewaterhouse Coopers in Kabul, Afghanistan.[3]

In 1981, he founded National City Brokers in Dublin. The company competed with already established stockbroking names in Dublin such as Davy's and Goodbodys. Desmond sold the company to Ulster Bank in 1994, which at the time was part of the National Westminster Group, for a reported £39 million. Subsequently, as a result of Natwest's takeoever in 2003 by RBS, NCB was bought out by its management with the support of former billionaire businessman Sean Quinn who was believed at that time to control 25% of the company.[3]

He was appointed chairman of the board of Aer Rianta in 1990 under the Charles Haughey government, but resigned in October 1991 amid the scandal over the purchase of the Johnston Mooney & O'Brien site by Telecom Éireann.[4]

In 1995, he founded International Investment & Underwriting (IIU), a private equity firm and his primary investment vehicle. It is located in Ireland's International Financial Services Centre (IFSC) at IFSC House and is regulated by the Irish Financial Services Regulatory Authority. Companies that are controlled through IIU include DAON (a biometric enabling technology company). IIU Asset Strategies Limited is the hedge fund arm of the company, offering convertible bonds and equity funds.[5]

In 1996, Desmond backed a consortium headed by Fran Rooney to purchase Baltimore Technologies for £300,000. The company quickly purchased an e-commerce license from the EU and it experienced rapid growth over the following years. It was briefly a member of the FTSE 100 and had a market capitalization of £4.5 Billion. The company though fell victim to the dotcom bust and all but collapsed.

In 1997, together with business partners John Magnier and J.P. McManus, Desmond purchased the luxurious five-star Barbados resort Sandy Lane Hotel. The Hotel underwent a US$450 million renovation and was re-opened in 2001.

Desmond purchased London City Airport from Mowlem for £23.5m in 1995. The investment was considered a large risk as London's Docklands was in recession and the neighbouring Canary Wharf development was in receivership. The airport has since become one of the more profitable in the United Kingdom. Desmond sold London City Airport in October 2006 for a reported £750 million to a consortium consisting of insurer AIG, GE Capital and Credit Suisse.[6]

BETDAQ is the trading name of Global Betting Exchange, a betting exchange operator based in Ireland. It is the second largest betting exchange operator in the market, with Betfair being the largest. The company was founded in 2000 by Dermot Desmond and started trading in September 2001. Its headquarters are also located in the International Financial Services Centre in Dublin. Desmond sold BETDAQ to Ladbrokes for €30 million in 2013 and is a shareholder at the bookmaker as a result of the deal.[7]

Desmond was a major shareholder in Irish food company Greencore for a number of years. He sold his shares in 2006.[8]

In 2005, Desmond opened the Sporting Emporium, a Dublin-based private members gaming club. It was reported Desmond had invested €5.5 million of his own money in the venture. After being open for only seven months it faced closure.[9]

Desmond purchased 33.1% of Latvian Rietumu Banka in 2005 for a reported €66 million. He invested in the bank as a result of being very impressed with its management team and capital structure. The investment in Rietumu initially looked a successful one with Desmond's holding at one stage being valued at €200 million. However, the subsequent economic downturn has reduced the value of Desmond's holding in the bank significantly.

In August 2008, Desmond was offered the position of chairman of the Irish airline Aer Lingus. Desmond turned down the offer citing prior commitments as a factor which would not allow him the sufficient time necessary to do the job. Former GPA chief operating officer and current Babcock & Brown Air chief executive Colm Barrington was subsequently named chairman of Aer Lingus.[10]

On 19 September 2018, it was announced that Desmond had increased his stake in Toronto mining company Mountain Province Diamonds to 28% that is valued at a[11] current market price of approximately $158million. The company's sole asset is the Canadian Gahcho Kue Diamond Mine Project.

In September 2018, he secured planning permission to construct a 17,168 sq ft. palatial mansion on Shrewsbury Road in D4 - Ireland's most exclusive address. In getting the go-ahead for the ambitious mansion plan, Mr Desmond was also given the green light to demolish the existing house, "Walford", the most expensive house ever sold in the State at a staggering €58m in 2005.[12]

Glackin report

In 1991, a company law inspector, solicitor John Glackin, was appointed by the then Government to investigate complicated dealings involving Mr Desmond and the purchase and sale of the former Johnston Mooney and O'Brien site in Ballsbridge, Dublin. While Mr Desmond represented himself as an intermediary in the sale, Glackin's report said Mr Desmond, businessman JP McManus and John Magnier were beneficiaries of the sale. Mr Desmond strenuously disputed Glackin's findings.[13]

According to the Glackin Report, Hoddle Investments (the vehicle through which the deal was handled) executed two contracts with Telecom Éireann for the sale of the Johnston Mooney & O'Brien site for an aggregate price of £9.4 million, on 7 May 1990.[14] The proceeds of the sale were lodged to an NCB account.[15]

According to the Moriarty Tribunal report, the next day, on 8 May 1990, £206,613.57 was withdrawn from one NCB account, converted into sterling £200,000 and transferred to the Aurum Nominees No.6 account at NCB (proxied to an offshore Ansbacher Cayman account) held for the benefit of then Taoiseach, Charles Haughey.[16] Aurum Nominees Limited was a company established by NCB for the benefit of its clients, and used at the time by several of the beneficiaries to the deal, including JP McManus, Lochlann Quinn and Martin Naughton. Mr Quinn and Mr Naughton were owed money by Mr Desmond and he used the proceeds of the sale to pay off his debt to them, according to the report.[17]

Flood Tribunal

Desmond gave evidence relating to the Century Radio module of the Flood Tribunal. He said he had given former Fianna Fáil press secretary PJ Mara a loan of £46,000 between 1986 and 1989, as Mr Mara claimed he had run into financial difficulties. He said he made the payments by cheque.[18]

Moriarty Tribunal

The Moriarty Tribunal found that Mr Desmond made substantial payments to Taoiseach Charles Haughey. In September 1994 Mr Desmond made a payment of £100,000.00 sterling to Mr Haughey and in October 1996 he made a payment of £25,000 sterling. While Mr Desmond claims these payments to be loans, repayable by Mr Haughey, the Tribunal did not accept this explanation. Ultimately Mr Haughey was forced to settle with the Revenue Commissioners, as it appears he had failed to declare the payments from Mr Desmond.

The Tribunal noted that the payments were made via the Swiss bank account of a company called Anesia Etablissement, Banque Scandinave en Suisse, Case Postale 901, 1211 Geneva 3, of which Mr Desmond was the beneficial owner, via an account at Henry Ansbacher & Company to an account at Cayman International Bank Trust Company, held for Mr Haughey's benefit.[16] The sum £25,000 was paid via Desmonds's Bottin International Investments Limited which had an account with Anglo Irish Bank, 69 Athol Street, Douglas, Isle of Man.[19] Desmond said Haughey asked him for the money in 1996 because of "a shortage of funds".[20]

Desmond also loaned money to Feltrim plc, which was at the time managed by Charles Haughey's son, Conor Haughey. In August 1991, Desmond loaned the company £55,000, made up of £40,000 loaned on 12 August 1991 and £15,000 on 28 August 1991.[21] Conor Haughey told the Tribunal that the company was in danger of being liquidated and he approached Desmond for the money. The loan was never ultimately repaid, and was instead converted into equity.[22]

Celtic Mist

Desmond also paid £75,456 for the refurbishment of Mr. Haughey's yacht, the Celtic Mist, between 1990 and 1991, at a time according to the Tribunal, that Mr Haughey earned between £69,764 and £72,354 a year as Taoiseach. Mr Desmond again claimed this payment was a loan, but the Tribunal disagreed, noting again that Mr Haughey had settled with the Revenue Commissioners in relation to the sum, having failed to pay Capital Gains Tax at the time. The Tribunal also found that the yacht itself amounted to an indirect benefit to Mr Haughey. This was it despite being unable to find the source of the £167,073.90 paid for the yacht.[16]

Mr. Haughey's son Conor told the Tribunal in 1999 that he had learned money to refurbish the yacht had come from the bank account of Freezone Limited. Money from the sale of the Johnston Mooney & O'Brien site had ended up in the same account – a revelation that Conor Haughey said he was "very concerned" about.[23]

The yacht was subsequently given to the Irish Whale and Dolphin Group by the family of Mr Haughey and now operates as a maritime research vessel[24]

Esat Digifone

Desmond was an investor in Esat Digifone through his International Investment Underwriters (IIU) vehicle, ultimately owning 20% of the company. It was reported that he made up to £100 million in profit after selling his stake in Esat.[15]

Football

Desmond is the largest individual shareholder of the Scottish Premiership football club Celtic F.C.. .[25]

Desmond previously held a stake in Manchester United. He sold out to Malcolm Glazer in 2005.

Horse Racing

Desmond's racehorse Commanche Court won the Triumph Hurdle (1997), the Irish Grand National (2000), the Punchestown Gold Cup (2000), the Lismullen Hurdle (1998), the Christmas Hurdle (1998) and the Spring Juvenile Hurdle (1997).

Business holdings

Desmond's past and present business interests and investment holdings include;

gollark: If Epicbot worked, we could use its awful Markov model of Olivia.
gollark: So you should just imagine Olivia yourself.
gollark: So you can presumably predict Olivia messages with less training time than hypothetical GTech™ initiatives.
gollark: Humans are meant to be more sample efficient than neural networks, including language models, yes?
gollark: My total messages added to 11MB some time last year.

See also

References
  1. O'Toole, Fintan (2 March 2010). "Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger". PublicAffairs. Retrieved 27 January 2018 – via Google Books.
  2. "Business Irish Business News - Online Business and Finance - Independent.ie". Independent.ie.
  3. "Dermot Desmond Profile". Forbes. Retrieved 25 August 2011.
  4. McGrath, Brendan (4 October 1991). "Desmond's move is 'sad but inevitable' – Haughey". The Irish Times. Dublin. Retrieved 20 November 2011.
  5. "International Investment & Underwriting Profile". Iiu.ie. Retrieved 25 August 2011.
  6. olympics, unofficial london. "Desmond reaps rewards of London City Airport gamble - Business of the London 2012 Olympics". www.webarchive.org.uk. Archived from the original on 4 August 2010.
  7. "Horse Racing News - Racing News As It Happens - Racing Post". Racingpost.com. Retrieved 27 January 2018.
  8. Boyle, Pat (6 July 2006). "Shares in Greencore surge as Desmond sells his 22pc". Irish Independent. Retrieved 25 August 2011.
  9. Paul, Mark (28 May 2006). "Casino play looks 'bleak' for Desmond". The Times. London. Retrieved 25 August 2011.
  10. "Desmond turns down top Aer Lingus job". RTÉ News. 5 August 2008.
  11. "Dermot Desmond raises bet on Canadian diamond miner". The Irish Times. Retrieved 25 September 2018.
  12. https://www.irishexaminer.com/breakingnews/ireland/--866731.html
  13. Keena, Colm (23 March 2011). "Financier is no stranger to business and political rows". The Irish Times.
  14. "The Glackin Report". Documentcloud.org. Retrieved 27 January 2018.
  16. "Archived copy" (PDF). Archived from the original (PDF) on 19 May 2011. Retrieved 27 October 2008.CS1 maint: archived copy as title (link)
  17. Glackin, John A. "The Glackin Report". Documentcloud.org. Retrieved 27 January 2018.
  18. "Archived copy" (PDF). Archived from the original (PDF) on 11 August 2011. Retrieved 14 November 2011.CS1 maint: archived copy as title (link)
  19. "Day 44 pg 6" (PDF). Archived from the original (PDF) on 4 February 2014.
  20. "Day 44 pg 15" (PDF). Archived from the original (PDF) on 4 February 2014.
  21. "Day 82 Q.272" (PDF). Archived from the original (PDF) on 19 October 2013.
  22. "Day 82 Q.281, Q.286" (PDF). Archived from the original (PDF) on 19 October 2013.
  23. Keena, Colm (8 December 1999). "Haughey yacht paid for from proceeds of site deal". The Irish Times. Dublin. Retrieved 20 November 2011.
  24. Flynn, Pat (14 November 2011). "Haughey's 'Celtic Mist' to take to seas as maritime research vessel". The Irish Times.
  25. "Annual Report : Celtic plc Year Ended 30 June 2015" (PDF). Cdn.celticfc.net. Retrieved 27 January 2018.
  26. "Desmond criticises Bank of Ireland over Boucher". The Irish Times. 3 March 2009.
  27. Bottin (International) Investments Ltd. v Venson Group Plc & Others [2004] EWCA Civ 1368 (22 October 2004), Court of Appeal
  28. "Daon - Multi-Factor Mobile Biometric Authentication - IdentityX Platform - Daon". Daon.com. Retrieved 27 January 2018.
  29. "Archived copy" (PDF). Archived from the original (PDF) on 4 February 2014. Retrieved 12 January 2012.CS1 maint: archived copy as title (link)
  30. "BLACK GOLD AND GAS: NEWFOUNDLAND AND LABRADOR'S RICHES!". Nlrefining.com. Retrieved 27 January 2018.
  31. "Neovia trading gets physical - FT.com". 13 March 2012. Archived from the original on 13 March 2012.
  32. "Persons with significant control". Beta.companieshouse.gov.uk. Retrieved 7 December 2017.
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