Monday 19 March 2018

McNamara says Nama receivers recruited his staff after crash

Bernard McNamara
Bernard McNamara
Shane Phelan

Shane Phelan

Senior staff who worked for Bernard McNamara were snapped up by Nama receivers and rival building firms after his empire collapsed, the Longboat Quay developer told the Oireachtas Banking Inquiry.

The controversial builder, who went bankrupt in 2012 with debts of €2.7bn, defended the quality of his companies' boards and the structures of his former businesses.

"Directors were mainly qualified and experienced accountants, engineers and chartered surveyors," he said.

"As I understand it, almost all of them have since been recruited to senior positions by Nama receivers, banks, venture capital funds and top construction companies."

At the outset of his submission, he questioned the inquiry's powers to ask questions about the "internal workings and business affairs" of his companies. In response to several questions about the scale of his business and its debts, he replied: "This information is no longer available to me."

When asked what due diligence financial institutions carried out when giving loans to his businesses between 2001 and 2008, Mr McNamara said the banks "sometimes" commissioned their own valuation reports. The collateral required was "usually 20pc plus".

On the issue of corporate hospitality from the banks, Mr McNamara said he had rarely accepted any and had no details of whether his senior management had.

Mr McNamara, who was a Fianna Fáil councillor before he became a developer, said that to the best of his knowledge, contributions were made to political parties, but, again, he had no records of these available to him.

Meanwhile, two submissions from Nama's head of relationship management Martin Whelan, in which he took issue with allegations made by developers Johnny Ronan and Michael O'Flynn, were also published.

Mr Whelan rejected a claim by Mr Ronan that Nama set out to "take down" Treasury Holdings and said that the agency had at all times dealt with the developer and his company "objectively, commercially and professionally".

He said that Nama did not expect to be popular with debtors, given its mandate.

Enforcement action was taken against Treasury because "it was clearly insolvent and, in Nama's opinion, past the point of commercial rescue".

Mr Whelan also noted that ultimately the liquidation of Treasury was triggered by a petition from KBC Bank, although Nama did support the petition.

Mr Whelan also rejected claims by Mr O'Flynn, head of the O'Flynn construction group, that Nama dismissed his business plan without considering it. The group's loans, believed to have been worth €1.8bn, were sold to global investment firm Blackstone for €1.1bn last year.

Mr Whelan also described as "risible" claims by Mr O'Flynn that the "unpublished objective of Nama [is] to demonise and destroy developers of scale and that this at times overshadowed its statutory objective".

He said that the fact the majority of Nama debtors continue to work consensually with Nama disproved Mr O'Flynn's claim. Mr Whelan also disagreed with Mr O'Flynn's view that Nama lacked asset management experience.

A claim that the O'Flynn Group was subjected to pressure to sell a property in London to a bidder at a lower price than was being offered by another bidder, was also rejected.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business