Governance shortcomings in Waterford Institute of Technology spinout firm deals
Governance shortcomings have been identified at Waterford Institute of Technology in a review by the taxpayers’ watchdog of how it disposed of intellectual property in new technology to a campus spinout company.
The report published last night by Comptroller and Auditor General Seamus McCarthy said WIT could not find a signed copy of a 2005 agreement under which it paid €147,000 to a financial institution following the €63.5m sale of FeedHenry Ltd to a multinational company in 2014.
The deal led to 80 staff of the Telecommunications Systems and Software Group (TSSG), an internal research body at WIT, receiving bonuses from a €492,000 package that included employers’ PRSI. Some of the staff also benefited from the sale of shares they held in the company.
The mobile telecommunications technology had been developed by TSSG researchers, and subsequently received Enterprise Ireland financial support. Following the sale in 2014, Enterprise Ireland received €4.5m for its interest in the company, and WIT received €1.6m.
A focus of the C&AG review was on how the college’s share in the company was set at 10.8% when it transferred ownership of the IP in the technology to FeedHenry Ltd in December 2010.
Although the college’s governing body had approved an IP policy in February 2010, it was not involved in any key decisions made during the commercialisation and assignment of the FeedHenry IP at the end of that year.
The college’s policy indicated that a 15% equity stake in spinout companies would usually be appropriate in exchange for transferring IP owned by WIT. But there was no documentation by the college of the basis for agreeing to accept the reduced equity share.
The Higher Education Authority (HEA) has been restricted from publishing a report of its review into the matters due to questions over its legal powers to conduct investigations.
The Dáil Public Accounts Committee was told last month that the Attorney General’s office is considering the matter, but HEA officials assured TDs they plan to have details of the work published.
The HEA said last night it will give detailed consideration to the C&AG report.
