NAMA plans legal pursuit of debtors over asset transfers
Up to 20 of 'top 30' developers' interests in spouse's name
Published 14/01/2011 | 05:00
NAMA is planning to use legislation which is almost 400 years old to pursue property developers who transferred assets to their wives and families.
According to the agency, around 20 of the "Top 30" developers who have billions in loans between them have carried out such transfers.
NAMA chief executive Brendan McDonagh confirmed it could use legislation as old as the 1634 Conveyancing Act to pursue developers who carried out transfers before the NAMA legislation came into force.
And he said the penalties for developers who supplied false and misleading information about their assets to NAMA were five years in jail and fines of up to €5m.
"Where we do come across that, we will pursue it in the relevant way," he said.
It had been thought that property developers who transferred assets to their wives before NAMA was set up in November 2009 could not be forced to reverse them.
But the 1634 Conveyancing Act, which was replaced by a new Land and Conveyancing Act in December 2009, can still be used to reverse fraudulent asset transfers prior to that date.
Mr McDonagh said most property developers were voluntarily transferring back their assets in return for getting their business plans approved by NAMA.
"We have only had reason to initiate one (court case) to date but there could be more in the pipeline," he said.
NAMA chairman Frank Daly said it would be possible for the courts to infer that a person was intending to defraud future creditors by transferring assets to their spouse.
"A person doesn't have to be insolvent," he said.
It comes after a recent RTE 'Prime Time Investigates' documentary uncovered evidence of widespread asset transfers to spouses by top developers going into NAMA.
Labour TD Roisin Shorthall said there seemed to be no sense of urgency in NAMA about tackling developers who seemed to be still enjoying a "superior lifestyle".
"Justice demands that those developers be brought to book very quickly," she said.
The meeting of the Public Accounts Committee yesterday heard that the "Top Ten" developers in NAMA had given personal guarantees which covered 60pc of their total loans of €16bn -- which NAMA has acquired for €8.5bn.
Mr Daly said the developers had to co-operate with NAMA because they needed the agency to help tackle their debts.
"It's not easy for them, I can assure you. The engagement with the top 30 to date, it is working," he said.
But at the meeting, Mr McDonagh came under pressure to take a voluntary reduction to his €430,000 annual salary yesterday.
He was subjected to a stinging attack by Fianna Fail TD Ned O'Keeffe, who said it was a "crime" for a public servant to be paid so much at a time of economic crisis.
"It's absurd, it's shameful in this climate we live in. I'd advise you to have a re-think," he said.
Mr McDonagh is also entitled to a bonus of 60pc of his salary -- dependent on performance -- which could bring his overall pay up to €688,000. However, no such bonus has been paid yet.
Mr McDonagh made no response to Mr O'Keeffe's attack.