Misc

The National Digital Research Centre (NDRC) is the successor to the now departed MediaLab Europe in Dublin’s Digital Hub.

Like all good corporate entities, it has a mission statement.

“NDRC’s mission is to create market capital by accelerating ideas to income in a sustainable, ongoing and enduring way.”

“Accelerating ideas to income” is what we might otherwise call helping to start a successful company.

The company is a joint venture between Irish Universities and is funded, almost entirely, by a grant from the Department of Communications, Energy and Natural Resources. It has been accepted by the Revenue Commissioners for favourable tax treatment as a charity.

Last year, I wrote about the peculiar assertions regarding the return on investment to date in the Annual Report produced for 2011 by the NDRC.

Previously on the NDRC…

Researching Return on Investment (ROI) at the National Digital Research Centre

National Digital Research Centre responds to my post on ROI 

National Digital Research Centre: Making Investments or “Investments”? 

There were two main questions at issue in those posts. Firstly, there was the cryptic claim made in the 2011 Annual Report that the NDRC had achieved “1.2x return on investment”. And secondly there was the mystery of the shareholdings taken in exchange for the public money invested in all the NDRC’s companies. They appeared not to be referred to at all in the financial records filed with the CRO.

The first question was answered in the 2nd post: Effectively, “1.2x return on investment” didn’t refer to any return to the NDRC on its investment at all.

But there remained the question of why there wasn’t any reference in the financials to the shareholdings the NDRC receive in return for their investments.

Ch-ch-ch-Changes

A few things happened after the publication of my third post exploring this issue. Firstly, the NDRC’s Auditors, Ernst & Young, resigned on the 21^st December 2011. Secondly, a new Company Secretary was appointed in May 2012.

PriceWaterhouseCoopers became the new Auditors for the company. This year the NDRC Annual Report for 2012 broke with its predecessors by including financial data and Statements from the Directors and the Auditors.

For the first time, those financials included an valuation of the shares in the companies the NDRC have invested in over the previous 4 years. It explained that valuation as follows;

“Follow-on investment in the shares of companies to commercialise intellectual property generated by an entities research activities is recognised on the balance sheet at cost, less allowance for impairment losses.”

If, like me, you are borderline innumerate, that means they have assessed the shares in the 48 companies in their Portfolio (listed on page 45 of the 2012 Annual Report) as having no value at all.

Zero. Nothing. No value assigned to any of them. They appear nowhere as an asset on the balance sheet with any value at all.

Nothing out of Forty Eight.

Actually, out of Forty Seven. Because there is one company investment which is recorded as an asset. The Annual Report makes quite a big deal about this.

“[There is] one such an enterprise having matured for the first time to the point of being recognised as an asset on the company’s balance sheet. This latter development is a key developmental stage in the progressive maturing of the company’s investment and engagement activities to date.”

An asset! A hit! Send home the blindfolded monkeys! We don’t need their investment skills.

Wait.

What kind of asset are we talking about here?

“During the year, as part of a collaborative translational research investment, the company invested €60,000 in lingleOnline limited, a spinout created for the commercial exploitation of intellectual property developed.”

And what is this investment worth now?

“Investment in unlisted company  €60,000”

OK. So the cash is still there. As we can see, these investment activities really are maturing progressively.

The Brewster’s Millions Investment Model

To be clear, the NDRC has spent 18.5 million euro of public money. It expects, by July of 2013 to have pushed that figure to €25 million. In return for its investments it has taken shares in 48 companies.

The financial statement says the NDRC’s share in one of those companies is currently worth exactly what was paid in. The rest aren’t worth anything at all.

It seems like a bonfire would have been a quicker and easier way to receive the same return on investment.

And yet.

There’s just one more thing.

Because, in a pull out box on page 5 of the 2012 Annual Report, there’s something surprising.

“€28.8 m Valuation of Portfolio Companies who secured Follow-On Investment”

If some or all of those 48 companies are collectively worth €28.8 million why aren’t the shares held in those companies listed as assets of NDRC? Not for the first time, I’m mystified.

The NDRC were allotted €25 million from the Department of Communication, Energy and Natural Resources to be drawn down over five years. From the Annual Report, it appears that, as they come to the end of their fifth year, they are eager to continue in existence.

“having proven the success of our model, NDRC is poised and ready to scale.”

When that model is based on spending scarce public money, it is reasonable to expect a financial return on the investment.

Citing the jobs created in the companies is not sufficient to justify the NDRC’s model, if that model is predicated on taking shareholdings as a method of ensuring a return to the taxpayer for their money.

The eponymous hero of Brewster’s Millions provided considerable employment until the money ran out. His task was to spend millions in a set time period and have absolutely no assets to show for it.

It was a good film. It would be a poor use of public funds.

Some of us, in Dublin, are buying books now, and connecting with the past as we do so, it feels.

One book to catch my eye is The Checklist Manifesto: How to Get Things Right, by Atul Gawande. My enthusiasm fell away when I found no checklist in the book. My fault; the book is a Manifesto, after all. But should Dr. Gawande not have demonstrated the value of checklists, as opposed to asserting it?

He does refer to the use of checklists in the Warren Buffet Berkshire organization. Now my enthusiasm for checklists began to falter. One of Buffet’s lists asks the researchers to confirm that they have read the footnotes in the latest sets of published accounts of the target company. Hmm.

A checklist is an algorithm; so, too, is a cookery recipe and we all know, or should know, of the value of those.

Lawyers are convinced of the value of checklists, but they are not as centralised as the medical profession is, to get the full benefit of them.

Even so, we should not forget that Taoiseach Brian Cowen and Minister for Finance Brian Lenihan are both lawyers (and it doesn’t get more centralised than where they are) and there is, or was, (this writer thinks) no checklist in the world that would have prevented them from wrecking the Irish economy.

Well, there will be, allegedly, a Judicial Council. What complaints will it receive? Possibly not all it should.

It will not accept complaints which amount to an attack on the outcome of a case, nor should it. It will not accept complaints which are calculated to sap the spirit or determination of the judge. This latter class is of interest. After all, any complaint accepted by the Council would sap the determination of a normal person at the receiveing end of the complaint. In reality, only objective evidence of poor standards of judicial conduct will make it to the Council.

What would that be? It is hard to be dogmatic, but there are some events which, when reported, point almost invariably towards bad judicial behaviour as an explanation. (Oddly, and significantly, these events are often not reported by the media; most people try to get along without conflict).
In principle, a judge who issues a warrant for the arrest of the local Superintendent of the Garda Siochana is wrong. This is not to say that the Superintendent is beyond the law, just that the part played by the Garda Siochana in the normal functioning of the court’s business is supportive and could hardly be otherwise. It is more likely that a judge has become a lunatic than that the police function has become a maverick. (If the police function has become maverick, which can and has happened, the judiciary are, inevitably, complicit in that.)
What of other figures of power? Surely the Chief Executives of State bodies should not be permitted to cock a snook at the courts? Should they not be arrested?

Well, no.

What about legal practitioners? Should disruption of the court by defence counsel not be curbed by a timely arrest?

Well, no.

The actual problem, for the future, is to elicit complaints to the Council from the victims of such judicial behaviour. What Superintendent would not prefer to limit the unpleasantness already experienced and avoid a full blown investigation of an embarrassing clash with a judge? Would he/she receive support from the Commissioner in pursuing a complaint to the Council?

Probably not.

Finally, if there exists a Judicial Review list in the High Court consisting of cases from the work of one judge, is it not time to look at the judge, as well as his errors?

Readers of this blog may recall a Freedom of Information request to the Taoiseach and the Minister for Finance for details of the discussion between the Government and the EU Commission relating to the price at which Irish bank assets would transfer into NAMA. That information was never furnished.
It is no surprise, therefore that NAMA has claimed exemption from complying with any Freedom of Information requests.
There is a possibility for some information leakage, however. J K Galbraith records, of German hyperinflation of the early 1920s, in Money: Whence it Came, Where it Went, (A. Deutsch, London, 1975, p. 157):-

“’Zero stroke’ or ‘cipher stroke’ is the name created by German physicians for a prevelent nervous malady brought about by the present fantastic currency figures. Scores of cases of the ‘stroke’ are reported among men and women of all classes, who have been prostrated by their efforts to figure in thousands of millions. Many of these persons apparently are normal except for a desire to write endless rows of ciphers.”

“Ciphers”, here, are zeros.
Now, if we camp outside NAMA HQ, we can check for sick people staggering from the office and possibly relate the number of the sick to the destruction of the Irish economy.

President Kaczynski of Poland died with, among others, his wife in the Smolensk air accident. Death of spouses simultaneously is called Commorientes.

If they had been Irish, probably they would have owned their residence in joint names (in joint tenancy). The effect of this form of ownership is to vest full ownership in the survivor. Significantly, the property never becomes part of the estate of the first partner to die. However, commorientes defeats this process. Which died first?

Under Section 5 of the Succession Act 1965 simultaneous death is presumed in some circumstances.

Under Section 68 of the Civil Law (Miscellaneous Provisions) Act 2008 a joint tenancy in commorientes is converted into a tenancy in common in equal shares and each share forms part of the estate of the deceased partner.

The Irish Times reports Mr. Seamus Lyons (who, it says, is an assistant city manager) as announcing the intended publication (by him, I think) of a report from the Economic and Social Research Institute.

Amusingly, he is quoted as saying that:-

“The claim that there will not be enough waste available for the incinerator, we refute that, as we believe the ESRI will next week.”

Why bother with the expense and tedium of publishing the ESRI report if the claim is already “refuted”?

The reason is, he does not know the meaning of the word “refute”.

See this blog HERE on the point.

We can be confident, whatever the merits or demerits of the ESRI report, it will not refute “the claim”.

Some law cases are definitely more interesting than others. In 1604 Mr. Belott married Ms. Mountjoy. Her dad promised Mr. Belott a payment in return for the marriage.

That payment, it appears, was not made.

In 1612 the case of Belott v Mountjoy came before the court. Mr. Belott felt that Mr. Mountjoy had shortchanged him.

Interestingly, a witness in the case had acted as matchmaker and, presumably, knew the details of the terms of the settlement.

That witness was William Shakespeare, (“Wilm. Shaksp.”) (Shakspear?). Unfortunately, he could not remember the details of the settlement or dowry. Crucially, he did confirm there had been agreement on a settlement.

Shakespeare had been a lodger in the Mountjoy household in 1604. Belott was the Mountjoy apprentice. How he found time to act as matchmaker is a mystery; perhaps his role extended to a conversation over an evening meal after his return from the theatre. Shakespeare’s life involved acting (the ghost of Hamlet’s father, in Hamlet, for instance), playwriting and, it is believed, directing. The theatres of the time presented five or six plays a week; so Shakespeare was working, probably, six days a week as an actor, writing plays and learning his lines for the forthcoming productions.

When the Belott v Mountjoy case came on for hearing, Shakespeare was in retirement in Stratford on Avon. The court was in London. One wonders about the difficulties confronting Belott in the serving of the subpoena on Shakespeare and what playwriting these events might have produced, but for the retirement of the witness!

Football, (soccer football) is important. It embodies the need for transparency. Thierry Henry’s foul handling of the ball in the Ireland v France match is trivia, but the advancement of FIFA’s interests in having two big nations playing in the World cup final is not. Interest like that cannot be open to transparency; they run counter to the spirit of soccer football.

Ireland was punching above its weight in the game with France. When you are punching above your weight you better know it and you better aim for a knock out blow to win. A win on points will not be vouchsafed to you.

Furthermore, accept the fact of failure, having properly defined it. The failure to comprehensively eliminate France was the failure, and is only made the more painful by the antics of Brian Cowen and Martin Cullen. They will do nothing to correct FIFA’s faults.

What!
In ill thoughts again!
Men must endure/ Their going hence, even as their coming hither:/ Ripeness is all.
Come on.

-King Lear

It is a surprising thing to encounter a witness who, in all honesty, believes that the evidence they are giving or proposing to give is the truth, when it is far from it.

After the battle of Salamanca in the Peninsular war the Prince Regent was so enthused with Wellington’s victory there that he came to believe that he had been present. To accommodate the fact that nobody could corroborate this remarkable claim he suggested that he had been disguised as Major-General von Bock, who not only was there, but had led the charge of the King’s German Legion.

This post is about words. In fact it proposes a conscious effort by the State to preserve some words or at least to promote them.

Perhaps the Royal Irish Academy could leave off running the Irish Secret Service (what else could it be doing, save that?) and discharge the job.

The first word to be promoted, I suggest is “rere”. It is a Dublin spelling of a word referring to the back of something, typically a house. It clings to life, written, I think, only on rubbish bins in Dublin city centre, as a direction to where the bin properly belongs in relation to its building. It dates from Cromwellian times. The UK has forgotten the word (and much else besides of Cromwellian times, and issues).

“Rear” is already carrying too heavy a load in the form of “rearing horses” and “rearing children”.

The second word is “mawkish”. The current Taoiseach, in his fashion, has adopted this concept in his (unattributed) communications to the Irish media. Now he should expressly adopt the word, come clean, and admit that his soulful references to the loneliness and responsibilities of power are mawkish.