FG and FF TDs unite in call for change in Nama strategy
The battle between Michael O'Flynn and Blackstone for control of the O'Flynn Group empire has prompted TDs representing Fine Gael and Fianna Fail to call on Nama to ensure the public interest continues to be protected by the private equity giants who buy the loans on its books.
Fine Gael TD Michael Creed and Fianna Fail finance spokesman Michael McGrath - both of whom represent constituencies in Mr O'Flynn's native Cork - voiced their concern that in seeking to accelerate its disposal of loans, Nama is focussing too heavily on the maximisation of profit in a strategy which they believe may be inconsistent with the long-term economic interests of the State.
While Deputy Creed readily accepted Nama had a duty to obtain the best price for the loan books it was selling, he said the subsequent behaviour and strategy of those who acquired the debt underpinning to assets and businesses located here in Ireland needed to be taken into account too.
He said: "At the moment, it appears the overall requirement in terms of accelerating the wind down of Nama is to simply sell the loan books to the highest bidder. That's not sufficiently protecting the public interest in the current climate.
"How private equity acts after they buy the loans may not be in the public interest. The public interest now is as much about the developer's capacity to meet public policy requirements subsequently as it is about the price his loans are sold for. There are public policy requirements to build houses and infrastructure."
The Fine Gael TD said he would now raise the issue of Nama having a clear objective with prospective loan buyers in relation to their future intentions for Irish assets at the Dail's Finance Committee. He also stated his intention to pursue the matter with finance minister Michael Noonan through questions in Dail Eireann.
While Fianna Fail deputy Michael McGrath welcomed Nama's recent commitment to deliver new housing and office space in areas where they are most needed, he called for a debate on the current strategy whereby Nama appeared to be under "considerable pressure" to dispose of its loans as quickly as possible.
He said: "The real question for Nama is if it, for example, is selling a bundle of loans worth €1bn tomorrow and it suspects the fund buying the loan bundle may shut down the business, strip the assets and tell workers they no longer have a job - does Nama go ahead and sell the loans to that fund even if some of the competing bidders involve supporting the jobs in place? It seems to me that Nama is interpreting its mandate in too narrow a sense.
Mr McGrath added: "It has a wider economic responsibility and this should be reflected in its disposal strategy. It is not good enough for Nama to simply sell to the highest bidder without asking any questions and then wash its hands of the consequences.
"As it moves in to the final phase of its work I believe Nama needs to take into account not just the price it is offered for a particular bundle of loans but also the nature of the prospective buyer and their long-term intentions for the assets acquired. The highest bid in the short term for a portfolio of loans may not always be in the best long-term interests of the citizens of the State."
The Fianna Fail finance spokesman said he would be looking to have Nama appear before the Dail's finance committee in the new Dail term to address the matter of how it intends to deal with the issues thrown up by the O'Flynn case.