NAMA allows small group of developers to earn €200,000
Chairman defends policy as best way of ensuring co-operation and getting a return for taxpayers
Published 10/09/2011 | 05:00
NAMA is allowing a small group of developers to draw salaries of up to €200,000 a year in order to secure their co-operation with the agency.
NAMA chairman Frank Daly defended the policy, saying the agency was trying to work with developers long term so they could return money to the taxpayer.
Most developers are on salaries of between €75,000 and €100,000, Mr Daly said, significantly down on what they earned during the boom.
Mr Daly said some of the larger companies were managing assets worth several billion euro, so making sure these assets were safeguarded and developed was worth paying the money for.
Some developers, meanwhile, are facing legal action after moving their assets into the ownership of their wives and children. While €70m of these transfers have been reversed by developers, another group has refused to unwind the transfers and NAMA is going to take legal action imminently, NAMA chief executive Brendan McDonagh told the Irish Independent.
He said the transfers were mainly houses and apartments given to spouses, but, in a small number of cases, cash was also transferred, he revealed.
Mr Daly mounted a strong defence of NAMA's salary plans. He said if NAMA didn't take this approach it would have to liquidate 800 developers or put them into receivership.
He said the assets they owned would then be managed by a receiver or liquidator who often charge €180 an hour.
The largest developers in NAMA are Sean Mulryan, Gerry Gannon, Joe O'Reilly, and Johnny Ronan and Richard Barrett of Treasury Holdings.
It is not known what salaries any of these developers are drawing as they run private companies. NAMA doesn't reveal individual salary details.
Mr Daly was speaking at a meeting of the Oireachtas Public Expenditure and Reform Committee.
He said in many cases the salaries being drawn by developers were not directly controlled by NAMA. The agency simply ordered the developers to cut their overheads by 50pc to 70pc and then pay themselves a salary out of whatever amount was left.
"It's a hard decision,'' said Mr Daly about what developers should be paid. But he said the main aim of NAMA was to make a return for the taxpayer and developers were worth propping up.
"They are the people who know the business,'' Mr Daly said. "I'd love to tell you we could walk away from these 800 developers, it would be popular,'' he said, "but it would not work."
Mr Daly confirmed an Irish Independent report from June that developers were able to join in profit-share arrangements with the agency.
If developers managed to sell assets and bring in cash beyond NAMA's targets, the extra proceeds were split between the two sides. Developers would get 10pc of the extra amount, with NAMA getting 90pc, Mr Daly explained.
However, he strongly rejected a charge from Sinn Fein TD Pearse Doherty that NAMA was giving developers "debt forgiveness''.
"We haven't forgiven any debt,'' said Mr Daly. But he admitted that in many cases a developer could have no more assets to give over and after that it would be a waste of time and money to pursue that developer.
NAMA paid €30.5bn for its portfolio of loans, but Mr Daly said getting back more than this amount directly from developers was going to be difficult. "Every €100m is going to be a struggle,'' he said.