Wednesday 17 January 2018

Banking inquiry: Former CEO of Anglo Irish Bank David Drumm 'offers to give evidence via video link'

Leinster House. Photo: Getty Images
Leinster House. Photo: Getty Images

Clodagh Sheehy

Former CEO of Anglo Irish Bank David Drumm has reportedly offered to give evidence to the banking inquiry via video link from America.

A number of banking inquiry members have voiced their opposition to the offer, RTE reports.

The inquiry committee will now determine if the video link appearance will meet Mr Drumm's obligations to assist the inquiry.

Today, property developer Joe O’Reilly responsible for some of the biggest developments in Dublin said he hopes to pay back €2bn worth of loans in full.

Mr O’Reilly said his companies Castlethorn Construction and Chartered Land have paid €600m so far to NAMA and expect to pay back the principal on personal and corporate borrowings in full.

Questioned at the Banking Inquiry by Deputy Michael McGrath, Mr O’Reilly said the €600m was made up of €400m actual asset repayment and €200-250m in rental cash flow for NAMA from the properties.

Developments by Mr O’Reilly’s companies Castlethorn Construction and Chartered Land  include Grand Canal Square, the Facebook European headquarters in Dublin, the Bord Gais Energy Theatre, the Dundrum Town Centre, ILAC Centre and Pavilions shopping centre in Swords, Co Dublin.

Mr O’Reilly said the borrowings of the two companies amounted to €2bn by September 30th 2008.

Castlethorn was primarily financed by Ulster Bank and AIB and Chartered Land by Anglo Irish Bank and Bank of Ireland.

The developer blamed the crash on too much debt, too freely available to too many borrowers which led to a glut of inexperienced developers, many of whom traded with a short term horizon.

“This caused an unsustainable peak in the values of virtually all property segments and particularly in secondary properties in provincial areas”.

He referred to the significant number of new developers “who lacked experience and expertise, many of whom were over exposed to over-priced secondary assets.”

Mr O’Reilly also said that many people who became property developers seemed to be able to get loans overnight.

Some people referred to these as part-time developers and he thought that was probably a very fair assessment.

Asked by Deputy Sean Barrett about donations to political parties, Mr O’Reilly said his companies had contributed €74,000 in political donations to the main political parties and some independent politicians between 2002-2008.

He said they had always been asked for the contributions and “did so in small amounts when asked”.

Mr O’Reilly said he believed the recovery in property values was most apparent in Dublin at the moment with the rest of the country lagging behind by perhaps a number of years.

With the benefit of the experience of the collapse, the property and financial sectors “must in future act with greater prudence, responding to market demand with product that is economically sustainable”.

He felt the biggest mistake by the country was that in joining the Euro we had not put in place measures to control inflation.

He regretted he did not foresee the extent of the property crisis and if he had his time over again he would do things differently.

Deputy Pearse Doherty asked about the four historical buildings on Moore Street owned by Mr O’Reilly’s company which had been allowed get into a state of disrepair.

Mr O’Reilly said the opposite was the reality. When his company had taken them over there was planning permission to have them demolished but his company kept them.  When they took possession of the buildings in about 2008 the roofs had caved in.

NAMA had supported them in spending money to stabilise and maintain the buildings and they had done so since so he believed their intervention was positive.

The buildings are being taken over by the State to provide a 1916 commemoration centre.

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