April 16, 1999, CITY EDITION
Galway-based entrepreneur courts world investors
Declan Ganley is said to have interests in Dublin, London, Brussels, New York, Eastern Europe and Central America in ventures from telecommunications to forestry but these interests are hard to pin down
BYLINE: By COLM KEENA
SECTION: BUSINESS & FINANCE; IN FOCUS - DECLAN GANLEY, ENTREPRENEUR; Pg. 56
LENGTH: 1760 words
Either 30-year-old Galway-based entrepreneur Mr Declan Ganley is one of the richest Irishmen of his generation, or he isn't really very rich at all. It depends on who you talk to.
Some who know him and his business dealings say he has a great ability to charm and create enthusiasm, but that this soon wears thin as you discover that you never really know what's going on. Others, like Mr Don de Marino, chairman of the US Arab Chamber of Commerce and deputy assistant secretary with the US Department of Commerce during the Bush administration, who has known Mr Ganley since 1991 and is involved in the bid for Irish Fertilizer Industries (IFI), are more supportive.
When asked, a spokesman for Mr Ganley said the Galway businessman had interests in Dublin, London, Brussels, New York, Eastern Europe and Central America. These include a telecommunications company based in Brussels called Broadnet, which is 60 per cent owned by Comcast and is targeting Europe for wireless broadband operating licences.
He is a shareholder of a company "that holds rights to TV stations in six Central American countries", the spokesman said. He added that Mr Ganley had a "controlling interest" in the largest on-shore gas field in Europe, which is in Albania, and is the chairman of the largest private forestry company in Russia. He is chairman of Anglo-Adriatic, an investment fund company set up to invest in the privatisation programme in Albania.
Yet, inquiries have yielded no clarity about the nature of Mr Ganley's interests in Central America or Russia and suggest that his involvement in the Albanian gas field is simply one of being in negotiation for rights there. During an interview, the only operation that emerged as a possible generator of profits was timber exporting businesses Mr Ganley said he had in Latvia, something not mentioned by the spokesman.
Mr Ganley says he began shipping metals from Siberia through Latvia in about 1990 (when he would have been 21 years old). Most of the shipping was done through the Latvian capital and port, Riga.
He says he was appointed a foreign economic adviser to the first Latvian government after independence in 1991. He began to build up a timber exporting business and within a couple of years his business was "contributing 4 per cent of Latvian GDP".
Yet contacts in Latvia who have in the past made inquiries about Mr Ganley have never been able to locate his business activities there. Sources say the Irish embassy in Warsaw, which is accredited to Latvia, became aware of reports in the Irish media concerning Mr Ganley and Latvia, and made discreet inquiries. Again it could find no evidence of business dealings in Latvia involving Mr Ganley, or anyone who had heard of him being an adviser to the Latvian government.
When this was put to Mr Ganley his response was: "Good". In markets like Latvia in the early 1990s, he says, it was best to use local nominee companies and shadow representatives.
"In some countries you need to run silent and deep, because there may be social or political sensitivities to significant foreign ownership, and indeed from a security standpoint - high-profile foreign companies have been subjected to pressure from the so-called mafia in former Soviet Union countries - so in these type, of markets, such as Latvia was then, we operate through locally established companies with local staff complemented by ex-pat staff where necessary."
Mr Ganley was born in London of Irish parents. He and his family moved to Glenamaddy, Co Galway, when he was 13 and he finished his secondary education there. He says he moved to London after school and took night classes in insurance. This led to work with a Lloyds insurance syndicate and, through that, to contacts with deals involving satellites and the Russian aerospace sector. He developed contacts with some Russians and through these contacts sourced metals in Siberia which he began exporting through Riga for sale on the London Metal Exchange.
His timber exporting business in Latvia spread to include forestry and mills in Estonia, Lithuania and Russia. Mr Ganley was quoted in the Timber Trades Journal, in October 1997, in relation to his Russian involvement: "The old Soviet forestry husbandry was flawed in some areas. We've revamped it." The controlling interest in the operation at that stage was held by Moscow-based Renaissance Bank. How much the Moscow bank paid and how much Mr Ganley received from the sale, are not known.
Meanwhile, Mr Ganley had begun exploring opportunities in Albania. In April 1996, he told Reuters in London that the Albanian government had granted its first ever licence to a fund to invest in Albanian privatisation vouchers.
"Albania is a rough diamond at the moment but after the elections in May things will really take off," he said. The fund was Anglo-Adriatic, a venture Mr de Marino is involved in with Mr Ganley.
"Citizens were given vouchers to be converted into shares in companies when they were privatised," Mr de Marino explains. "We collect vouchers and issue shares in the fund to the voucher holders." Several thousand Albanian shareholders have become involved to date, and the fund is still the only such fund in Albania. The fund is in negotiations with the Albanian government in relation to companies to be privatised, and is trying to purchase companies through a combination of vouchers and cash. A percentage of the privatised companies would then belong to the shareholders in the fund. "The process has been stymied by events in the country in the last number of years."
In relation to the gas field, which is in Delvina, Albania, Canadian-based Grande Portage Resources is in negotiations where it would acquire some of the field, and the rest would be acquired by the fund, according to Mr de Marino. Mr Ganley has an interest in Grande Portage Resources. The company is connected to the bid for IFI and is quoted on the Vancouver Stock Exchange.
In April 1998, Grande Portage announced in Toronto that it and the Anglo Adriatic Fund had been "granted a six-month exclusive period to negotiate" the acquisition of an Albanian fertiliser plant. The announcement stated that Grande Portage was also in negotiations concerning the Delvina gas field. There has been no announcement to the stock exchange of the negotiations having been concluded. So the company's interests in the gas field as far as the stock exchange is concerned, remain aspirational.
Mr Ganley says that as part of his interests in wireless broadband operations in a number of locations around the globe, he has been involved in exploring opportunities in Central America. His spokesman said he had holdings in six Central American TV stations. However, Nicaraguan businessman Mr Eugenio Lacayo says he was involved in setting up a deal with Mr Ganley involving six TV stations, but it never went ahead.
Mr Lacayo says a representative of Mr Ganley's was in Central America looking for suitable "emerging market projects. I created the project and I suggested it to him. We started working together." According to Mr Lacayo, he got a commitment from six TV stations in six Central American countries, that they might create a single or co-operative network. "He failed to bring up the money for the channel and people lost interest in Mr Ganley." This happened in the middle of last year, Mr Lacayo says. "I was supposed to be his partner. I was in Ireland twice, I was in his house."
Mr Lacayo says Mr Ganley is "a straight guy and very hard-working but I think he wanted to do too much and he lost focus". Mr Ganley says he looked at a range of Central American options and the one proposed by Mr Lacayo was only one of these. It was one he rejected. He is still pursuing a broadband project for Central America but it is at a "sensitive stage" and he cannot divulge the details or the name of his "potential strategic partner", he says. "It's live, it's happening, it has financing, it's very much moving forward."
Mr Ganley, through an Irish-registered company, GCI Ltd, was a 13 per cent shareholder in Cellstar, an unsuccessful bidder for the Republic's second mobile phone licence. The other partners for the bid were Comcast, RTE, and Bord na Mona. Mr Ganley initiated the formation of the consortium.
The board of GCI included Mr de Marino and Mr Gerald Manolovici. Mr Manolovici, who could not be contacted, was for several years head of emerging markets investments at Soros Fund Management and has a reputation for investing in difficult situations. "A shadowy figure once known on Wall Street as the Prince of Darkness for his secretive style", the Institutional Investor said of him in November 1994. The journal quoted a senior investor commenting on Mr Manolovici: "Gerry's theory is, the most money is made when things go not from bad to good, but from terrible to merely bad."
Mr Ganley says Mr Manolovici has invested in projects he was involved in, but is by no means his main investor. He says most of his investors come from the US, where people tend to be more "entrepreneurial". He seems to share some of Mr Manolovici's nerve in relation to business in difficult regions. The present turmoil in the Balkans is bound to lead to increased stability in Albania, he says, as NATO and the west are now committed to the region.
Whatever his business interests are or have been, Mr Ganley seems to have done well. When in Ireland he lives in a large old house on its own lands at Moyne Park, near Tuam, Co Galway, formerly the residence of the folk singer, Donovan, and at another time a seminary. According to those who have been there, the house has been meticulously restored and lavishly decorated. It has its own oratory. Mr Ganley dresses well, "like a London city banker, pin-stripes, monogrammed shirts, that sort of thing," according to one acquaintance. He drives big expensive cars and is known as a generous host. During the Galway races he holds major functions and foreign businessmen and senior Fianna Fail figures are known to stay in his home and in the converted stables at the back. He is an open supporter of Fianna Fail and knows the former party fundraiser Mr Des Richardson.
A few years ago at a 70th anniversary dinner for Fianna Fail in the Pierre Hotel on Fifth Avenue, New York, attended by the then leader of the opposition, Mr Bertie Ahern, Mr Ganley's was the second-largest donation registered. He gave $ 25,000 (E23,063). Mr Ganley is not tax resident in this State but will not say where he is tax resident.