Thursday 21 September 2017

No surprise 'bad bank' has been regularly in hot water over years

NAMA has never been a stranger to controversy.

With so many high-profile individuals involved, it was always going to be in hot water from time to time.

A constant problem at NAMA has been the rapid turnover of staff. The Dail heard last year that around 10pc of employees had left the agency in previous 12 months. This has prompted many NAMA officials to suggest that salaries should be even higher to ensure that employees stay at the organisation rather than defecting to the private sector. Plans to close down NAMA by 2020 don't help the agency's chances of retaining good people.

NAMA has also enjoyed mixed fortunes when it comes to courtroom battles with the big beasts of the Irish development jungle.

Last year saw a victory for the agency over developers Johnny Ronan and Richard Barrett when their Treasury Holdings empire collapsed into a liquidation. However, nothing is final in the world of property. This year, the liquidators were forced to cut a deal with the two men to get control of some units linked to the empire.

NAMA has also struggled with Belfast developer Paddy McKillen, who battled the agency all the way to the Supreme Court in 2011 and won. NAMA was then forced to reverse a decision to acquire €1.4bn worth of loans secured on Mr McKillen's assets and also pay Mr McKillen's costs, which were estimated at between €5m-€7m.

NAMA later sold his loans to his arch-enemies, the UK-based Barclay twins. This triggered yet another bitter battle, this time in the UK courts, between McKillen and the Barclays for control of Claridges, the Connaught and the Berkeley.

In 2011, a row erupted over the salaries paid to senior executives in NAMA. Chief executive Brendan McDonagh's near-€700,000 pay packet was branded "absurd" and "shameful" by the Dail's Public Accounts Committee.

Fianna Fail TD Ned O'Keeffe advised Mr McDonagh to take a pay cut -- something the Kerryman has since done.

NAMA had caused anger in 2010 when it refused to divulge the salaries of senior staff members on the grounds of commercial sensitivity. "I think it's absurd, it's shameful and I'm going to say here in this climate we live in, I would advise you to have a rethink on that salary," Mr O'Keeffe said at the time.

NAMA was again mired in controversy when ex-HSBC banker Michael Geoghegan wrote a report which called for broad and detailed range of changes to how the agency operates. Mr Geoghegan was broadly supportive of NAMA but called for changes to how the agency is run but called for the agency to evolve further to become the "pro-active, externally focused, entrepreneurial, confident business it needs to be."

Recently, it emerged that NAMA is funding a €13m extension of the Charlestown Shopping Centre in north Dublin, which is being undertaken by the Tom and Michael Bailey -- the two brothers behind property giant Bovale Developments. At the time the news emerged, NAMA sources argued that it supported projects with cash based on the return it expects to make for taxpayers.

But it was controversial because the brothers whose project was getting the support had previously made the largest tax settlement in the history of the State back in 2006.

Property is a tough game so it is hardly surprising that NAMA finds itself fighting on so many fronts but it is a reminder once again why NAMA is one of the most controversial organisations in the State at the moment.

Irish Independent

Editor's Choice

Also in Irish News