Ireland’s Comptroller and Auditor General has highlighted issues in a Waterford Institute of Technology licensing deal that garnered low returns when the spinout in question was acquired.
Waterford Institute of Technology has been criticised by Ireland’s Comptroller and Auditor General (C&AG) for retaining €951,000 ($1.1m) from the $82.3m sale of its mobile software development tools spinout FeedHenry in 2014, the Irish Times has reported.
WIT sold its 10.8% stake in FeedHenry to software producer RedHat in 2014. It had agreed to pare back its shareholding from the 15% provided originally provided for in its licence agreement.
C&AG’s report noted WIT had not documented the equity reduction, which contradicted the commercialisation policy adopted by the institute in 2010. C&AG said WIT’s governing body should have had greater active oversight given the value and peculiarities of the FeedHenry agreement.
CAG is also concerned Willy Donnelly, then vice-president of research at WIT and a shareholder in FeedHenry, may have had a conflict of interest in the deal. Donnelly has since been promoted to become president of WIT.
Equity negotiations with FeedHenry were handled by the institute’s then secretary financial controller, who held no equity in WIT spinouts, and Donnelly was not personally involved in the transaction. However, the officials responsible for negotiations had otherwise reported to Donnelly’s office.
Donnelly has previously told the Public Accounts Committee at the Irish Parliament that WIT has protocols to manage conflicts of interest, but the report concluded both the institute’s and national provisions are insufficient in this area.