Business Irish

Sunday 21 September 2014

'Nama is like North Korea'- developers are afraid to speak

Flynn claims state agency is an 'evil 
empire' and a 'cancer on the economy'

NIAMH HORANEXCLUSIVE

Published 03/08/2014 | 02:30

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Leona (Lee) Flynn (L), wearing sunglasses, of Palm Beach, Florida, leaving court. Her husband, John Flynn, is seen also.
John Flynn

Property developer John Flynn has launched an 
unprecedented attack on Nama, comparing the state agency to North Korea and describing it as a "cancer" on the Irish economy.

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In an exclusive interview with the Sunday Independent, the developer also told how some developers are too afraid to speak out against the agency for fear of repercussions.

But he says he is going to continue standing up to the agency. He declared: "I have no intention of ever bending over for them and handing them the jar of Vaseline."

Mr Flynn made the comments after a judge ruled the state agency acted "unlawfully" against him by calling in €22m worth of loans.

Judge Brian Cregan found the agency had breached its statutory duty of transparency by giving "inaccurate and misleading" reasons for calling in the Flynn debt.

The judge said Mr Flynn was not afforded his "right to be heard" and instead of giving the "real reasons" for calling in his debts, the agency's explanations were "misleading or spurious".

This weekend, Mr. Flynn described Nama as akin to North Korea: "They are an evil empire, a cancer on the economy and on the country and I believe that, honestly. They are answerable to nobody.

"They have sold assets and told people to sell assets without hearing them and those assets must be worth more now. So the question is: if they did it and acted unlawfully in doing that - are they going to be liable for damages?

"I would sue the ass off them for anything I could. I intend to make a career of it for the next ten years," he said.

"They have been found by the courts to be acting unlawfully, acting unfairly and it's the first time that that has been exposed."

In his High Court judgement, Judge Cregan also referred to a case brought by Treasury Holdings against Nama when it was found that Treasury had not been given their right to be heard.

In that case, Ms Justice Mary Finlay Geoghegan ruled that Nama was "in breach of that obligation by reason of its failure to hear Treasury" and, crucially, "investor interest in the acquisition of Treasury loans."

Judge Finlay Geoghegan ruled that the board of Nama should have been informed about potential investors: "Nama has failed to establish as a fact that the potential availability of third-party investors to purchase the Treasury loans was considered 
by the board members prior to taking the decision to enforce."

Treasury Holdings was immediately put into receivership following the sale of the Battersea Power station, which the future of the company ultimately rested upon. The sale of the station for €600m has since been called "the deal of the century" for its Malaysian buyers who hope to make billions from the investment when they redevelop the site.

Speaking about the similarities between the two cases, Mr Flynn said he "would be sick" if he was with Treasury Holdings and saw how prices rose in London following the sale of their most valuable asset: "Nama went and sold before the market rose in London and anyone who is operating in London would know that the market there had been dormant for the last ten years, the property market is cyclical, and it was time to hold but they sold because that's all they do." He went on: "They are given a bunch of goodies to sell and they can't even make a profit on it. I wouldn't employ them if they were the last ones looking for the job."

He said: "I am a commercial animal and I understand that you win and you lose and you take your losses on the chin but I expect those people who are standing against me to act morally."

He also pointed that most other developers are "afraid" to speak out because they fear their loans will be called in as a result. But he said many are privately questioning the agency's sale of assets:

"There is a second sale of the assets of Ireland happening as we speak. The first sale was when the Government sold out to the bondholders. The second was to Nama - and Nama got all this stuff in for nothing. Nama are selling it off to a bunch of carpetbaggers. Vultures. Instead of actually working through the assets as they should be and maximising their return. They are just selling it off wholesale."

The US-based developer also hit out at Nama's announcement that it plans to redevelop Dublin's Docklands:

"Nama got handed a load of property and loans as a gift and they are lucky if they are going to be able to make anything out of it. The civil service are incapable of building a children's hospital or anything on time or within budget. If the children's hospital had been given to either Jimmy or Joe Sheehan to do it, it would be up and running at this stage.

"To think that a bunch of civil servants who have never taken a risk in their life are capable of bringing in a project to produce 40,000 houses and God knows how many square feet of office space on time and within reason is risible."

In response to the claims, Nama told the Sunday Independent: "The matters at issue between the debtor and Nama have been determined by courts in a number of jurisdictions and Nama has nothing further to add."

Meanwhile, in the US, Mr Flynn is now appealing a decision in a case against Nama. Judge Lewis A Kaplan ruled in the southern district of New York last week that a civil case being taken by Mr Flynn and four members of his family should be dismissed on the grounds that it related to Ireland more than the US.

This weekend Mr. Flynn said: "We are going back to New York and taking the Irish elements out of it. We will go back and amend it and make it more American. We will do that within the next week."

Sunday Independent

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