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Spain, Alex
by Terry Clavin
Spain, Alex (1932–2012), businessman, was born on 1 October 1932 in Lower Baggot Street, Dublin, one of three sons and two daughters of Alexander Spain, an obstetrician, and his wife Eibhlín (n&e O'Meara), who later ran an antique shop. His father won one rugby cap for Ireland and was in some respects a dynamic and modernising master of the Holles Street Maternity Hospital in Dublin (1942–8), but gained posthumous notoriety for re-introducing symphysiotomies into Ireland in 1944. Long considered too dangerous, except in the most primitive operating conditions, this was a swift and economical procedure for dealing with obstructed pregnancies that was liable to permanently impair the mother's health. Symphysiotomies were routinely undertaken in Holles Street and in several other Irish hospitals during the mid to late twentieth century.
Alex enjoyed a comfortable upper middle-class upbringing, as his family moved to Stillorgan, Co. Dublin, and then to Fitzwilliam Square, Dublin. He was an excellent student at Willow Park School and Blackrock College, both in Blackrock, Co. Dublin. A speedy, try-scoring wing-forward in rugby, he won two Leinster junior cup medals (1947–8) and two Leinster senior cup medals (1949–50) with the Blackrock schools team, captaining the seniors in his final year (1951). He also played for and captained the Leinster schools team. While studying in UCD, he played for and in 1953/4 captained the university rugby team.
On graduating B.Comm. from UCD in 1954 with first-class honours, he joined the small Forsyth & Co. accounting practice, qualifying in first place in his final exams with the Institute of Chartered Accountants in Ireland (ICAI) in 1957. He became company secretary of the Irish Industrial Bank and in April 1958 married Maureen Murphy of Sorrento Road, Dalkey, Co. Dublin. After spending a brief period in London with the Price Waterhouse accounting firm, he returned to Dublin in 1960 to become a partner, effectively the managing partner, at Forsyth & Co. He standardised audit procedures and introduced time controls and rigorous billing practices – all radical innovations in Irish terms. He settled with his wife in Mount Merrion Avenue, Blackrock, Co. Dublin; they had four sons and two daughters.
Despite the opposition of its elderly incumbents, he was elected to the ICAI council in 1967, continuing there for ten years. Through the ICAI, he became friendly with Niall Crowley (qv), managing partner of the larger Kennedy, Crowley & Co., which culminated in the merger between their firms in 1969. Spain's administrative skills enabled Kennedy, Crowley's pioneering focus on recruitment and training. The quality of its staff improved enormously, instigating a period of rapid growth, accelerated by the 1972 merger with Stokes Brothers & Pim. Spain anchored the renamed Stokes Kennedy Crowley (SKC).
From the early 1970s Kennedy, Crowley/SKC referred many of its wealthiest clients to the Guinness & Mahon Bank, which devised sophisticated tax evasion schemes for them using illegal offshore accounts. In early 1972 the Guinness & Mahon Bank established one such account for Spain, though no money was ever transferred into it. That September he headed a consortium that tried but failed to purchase a small, publicly-quoted bank. Many of his SKC colleagues regarded this aborted foray as inappropriate, and believed he would be forced out. (His close links with businessmen and willingness to sit on company boards also met with disapproval.) He survived by recommitting himself to his work with SKC and the ICAI, serving as the ICAI's president for 1975–6. Under his influence, the formerly low profile and unassertive institute blossomed into a formidable professional lobby. In 1982 he became the only Irish representative on the committee that promulgated accounting standards for Britain and Ireland.
Succeeding Niall Crowley as SKC's managing partner in 1977, he proved himself a skilled diplomat within a practice divided into catholic (Kennedy, Crowley) and protestant (Stokes Brothers & Pim) cliques. Although he could exhibit an off-putting mix of shyness and confrontation in some social settings, he was dauntingly driven and self-assured on first impression, but bereft of ego, with a knack for putting subordinates at ease and getting the most out of them. Aside from family holidays in Dooks, Co. Kerry, he relaxed by hillwalking in the Wicklow mountains and by golfing in Dublin at Milltown and Portmarnock. The captain of Milltown Golf Club for 1973, he was a member of the Royal and Ancient Golf Club of St Andrews in Scotland, going there twice a year.
He continued the SKC policy of prioritising training and of using a relatively permissive audit process to develop more lucrative lines in consultancy and recruitment. He also pushed against the accounting profession's ban on advertising by having SKC sponsor scholarships, publish financial guides and display its name prominently in recruitment ads. With SKC scattered across various offices on Harcourt Street, he guided the firm's move in 1983 to a spacious site at the bottom of the street, dubbed Stokes Place. When he stepped down in May 1984, SKC had become Ireland's largest accounting firm, having grown since 1977 from a firm of 30 partners and 450 staff to one of 40 partners and 800 staff.
Reverting to being a partner, he left SKC in 1985 upon his appointment as chairman and chief executive of the state-owned B&I shipping line, which was making ruinous losses. The government augmented his salary by paying fees to his expressly formed management consultancy, giving him an overall income of £80,000 a year, well above the £33,600 public sector pay limit. Inheriting deputy chief executives, Brendan Bird and Jim Kennedy, capable of making good his lack of expertise with respect to shipping and to labour relations, he brought a new focus and impetus to recently initiated efforts to overhaul the company.
Benefiting from the government's newfound resolve, he weathered a series of short strikes before securing consent in January 1986 for 425 redundancies (out of 1,800 employees) and sweeping changes to work practices. Most crucially, the Seaman's Union of Ireland surrendered control of hiring, firing and promotions below office level. The government reciprocated by injecting £38 million. He had paved the way for this deal by controversially developing profit and revenue sharing agreements on certain routes with Sealink, B&I's main competitor.
His early initiatives unravelled following the advent of cheap airfares on routes between Ireland and Britain in the summer of 1986. Passenger numbers dropped sharply just as B&I's Dublin port-based freight business began losing out to the better shipping services available from Larne, Co. Antrim. With further redundancies and cutbacks looming, industrial unrest resumed, producing lengthy strikes in early 1987 that had a disastrous long-term effect on its cargo business. These difficulties also contributed to the collapse of the cartel arrangements with Sealink. Instead of breaking even, B&I haemorrhaged losses during 1986–7, becoming technically insolvent by early 1987.
B&I needed to refocus on carrying cars and freight trucks on the shorter Dublin/Dún Laoghaire–Holyhead routes, but was stuck with two ferries designed for carrying foot passengers on longer voyages. One was sold at a heavy loss, as Spain's decision to have these vessels refurbished in early 1986 proved costly. Exasperated civil servants and government ministers contemplated liquidation and blamed him for not being tough enough. But the fraught nature of the restructuring talks that proceeded throughout autumn 1987 showed he had a good sense of what his workers would bear.
With B&I almost out of cash, the last-minute management concessions brokered in December by the minister for labour, Bertie Ahern, delivered an agreement for 590 redundancies (on better terms than elsewhere in the public sector), a three-year pay freeze, more changes in work practices and the axing of the Dublin–Liverpool car ferry and of B&I's haulage service. Although no longer trading at a loss, B&I was hampered by the hard-line successfully pursued by the ships' officers on working conditions and remained a drain on the exchequer due to the interest on its debts. Following the end of his term as chief executive in March 1988, Spain continued as chairman until 1991 when the company was sold, against his advice, to the Irish Continental Group.
Considered to have done well in challenging circumstances at B&I, he was in the mid-to-late 1980s appointed chairman of Prudential Life (Ireland), the National Irish Bank (NIB), Xtravision and Food Industries, having been chairman of Ireland's leading venture capital company, DCC, since 1976. He also held several corporate directorships, sat on the board of the Holles Street Maternity Hospital and was chairman of the Financial Services Industry Association (1988–90). He shared a Merrion Street office with three other boardroom eminences: his old SKC colleague Niall Crowley, and former Aer Lingus executives Gerry Dempsey and David Kennedy; they were later joined by the sometime minister for finance and EEC commissioner Ray MacSharry.
Upon becoming chairman of the Xtravision video rental chain in November 1988, he paid 1.67p a share for 450,000 shares whereas DCC and Davy Stockbrokers simultaneously invested at 28p per share. For eighteen months he did nothing to halt the company's breakneck expansion, as the value of his £7,500 investment soared amid Xtravision's floatation on the Dublin Stock Exchange in spring 1989, leaving him with some £450,000 in paper profits. In summer 1990 he belatedly conducted an internal review, which discredited his earlier optimism by exposing Xtravision as lossmaking and deficient in financial controls. Many small investors had been misled by the flawed policy of depreciating video tapes evenly over three years rather than writing off most of the value within twelve months. The share price collapsed and Xtravision was sold for a pittance that November. Spain was likely nursing losses, having spent £80,000 on 200,000 shares in the May 1990 rights issue.
His reputation took another knock in 1998 when NIB was revealed to have overcharged customers, sold illegal offshore insurance policies and facilitated the evasion of deposit interest retention tax (DIRT). As this story broke, an agitated Spain denied any knowledge of wrongdoing to RTÉ reporters while insisting that he had championed stricter procedures in his capacity as chairman of the internal audit committee from 1989. He was effectively demoted as NIB chairman in early 1999 and left the board in 2000. Appearing in September 1999 before the dáil public accounts committee responsible for investigating DIRT evasion, he pleaded ignorance and suggested that the scale of the fraud was trivial. In its December report, the committee was particularly critical of him, describing his internal audit committee as bereft of effectiveness, influence and direction. The 2004 government report into the NIB scandal exempted the board of directors from culpability and faulted the internal audit committee only for failing to acknowledge potential DIRT liabilities.
Further controversy arose in 2001 when DCC was sued for insider trading after its disposal of a large shareholding in Fyffes. As DCC chairman, Spain defended his chief executive, Jim Flavin, who eventually resigned after the supreme court found DCC liable for €37 million in 2007. Spain retired as chairman and from the board in 2006, receiving €153,000 in directors' fees in his final year. He died on 3 January 2012 in his home in Blackrock, Co. Dublin, and was buried in Shanganagh cemetery, Co. Dublin. His will disposed of €2 million.
GRO (birth, marriage certs); NA, Dept. of Finance (2017/745), 'Financial position of British & Irish Steam Packet Company, 1987'; Dept. of the Taoiseach (2017/11/742), 'British and Irish Shipping Company (B&I) financial situation (1987)'; Ir. Press, passim, esp.; 11 Aug. 1951; 24 Oct. 1986; 5 Mar. 1987; 20, 22 May 1987; Ir. Times, passim, esp.; 11 Oct. 1971; 14 Sept. 1972; 10 Apr. 1976; 14 Jan. 1986; 29 Apr. 1989; 24 Sept. 1990; 16 Dec. 1991; 18 Sept. 1999; 5 Jan. 2012; Accountancy Ireland, June 1975; Feb. 2012 (obit.); Ir. Independent, esp.; 24 Sept. 1975; 3 May 1985; 4 Mar., 9 June 1987; 26 May 1988; 6 Oct. 1990; 5 Sept. 1991; 28 Mar. 1998; 18 Sept., 16 Dec. 1999; 7 June 2002; Hibernia, 10 Feb. 1978; 15 May 1980; Business and finance, 3 Sept., 22 Oct., 24 Dec. 1981; 16 May, 10 Oct., 7 Nov., 19 Dec. 1985; 5 June, 30 Oct. 1986; 15 Jan., 26 Feb., 24 Sept., 5, 12 Nov. 1987; 11 Feb. 1988; 20 Apr., 25 May 1989; 25 Oct. 1990; H. W. Robinson, A history of accountants in Ireland (1983 ed.); Sunday Independent, 5 May, 13, 15 Dec. 1985; 20 July 1986; 19 Aug. 1990; 8 July 2002; 8 Jan. 2012; 22 Sept. 2013; 14 Dec. 2014; Sunday Tribune, 14 July 1985; 19 Jan. 1986 (profile); 24 Jan. 1988; 2 Sept. 1990; 8, 15 Dec. 1991; 27 Mar. 1994; Irish Business, Aug. 1985; June 1987; Phoenix, 6 Dec. 1985 (profile); 6 June 1986; 26 Aug. 1988; 19 May 1989; 21 Sept. 1990; 6 May 1994; Management, May 1986; Margaret McStay, Colin (1986), 108–10; Ivor Kenny, In good company (1987); Sunday Business Post, 26 Aug., 2 Sept. 4 Nov. 1990; 4 Aug. 1991; 8 May 1994 (profile); 1 June 2008; Tony Farmar, Holles Street 1894–1994: The National Maternity Hospital: a centenary history (1994); Gerard McHugh and David Rowe (eds), Financial reporting and auditing: hedging the expectations gap (1996), 104–8; Edward Cahill, Corporate financial crisis in Ireland (1997); George Lee and Charlie Bird, Breaking the bank: how the NIB scandal was exposed (1998); 138, 146; Report of the inspectors appointed to enquire into the affairs of Ansbacher (Cayman) Ltd (2002), i, 31, 422; iv, app. XV (18) (1) (a), 32–3; Report of the investigation into the officers of National Irish Bank and National Irish Bank Financial Services Ltd (2004), 167–9; Sunday Times, 1 Aug. 2004; 24 June 2012; Fiona Reddan, IFSC: a story of global financial success (2008); Marie O'Connor, Bodily harm: Symphysiotomy and pubiotomy in Ireland, 1944–92 (2011); Shane Ross, The untouchables (2012); Tony Farmar, The versatile profession: a history of accountancy in Ireland since 1850 (2013); Ir. Examiner, 22 Apr. 2013; Guardian, 12 Dec. 2014
A new entry, added to the DIB online, June 2019
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Life Summary
Birth Date | 01 October 1932 | |
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Birth Place | Co. Dublin | |
Career |
businessman |
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Death Date | 03 January 2012 | |
Death Place | Co. Dublin | |
Contributor/s |
Terry Clavin |
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