Saturday 18 November 2017

O'Flynn to put Nama under fresh pressure

Developer expected to reveal experiences of State's toxic loan agency at Banking Inquiry

WHAT’S THE STOREY: Michael O’Flynn, the developer behind Cork’s Elysian Tower, has privately expressed his annoyance at the poor treatment he believes he received from Nama
WHAT’S THE STOREY: Michael O’Flynn, the developer behind Cork’s Elysian Tower, has privately expressed his annoyance at the poor treatment he believes he received from Nama
Ronald Quinlan

Ronald Quinlan

Nama looks set to come under renewed pressure this Thursday when one of the country's most respected property developers, Michael O'Flynn, appears before the Banking Inquiry.

Sources familiar with the matter have told the Sunday Independent that they expect Mr O'Flynn to make a number of potentially serious claims in relation to his experiences dealing with the State's toxic loans agency prior to its sale last year of the O'Flynn Group's €1.8bn loan portfolio to US private equity giant Blackstone.

The Cork-based developer is also expected by his friends within the property sector to recount for the members of the inquiry team his experience of a particularly turbulent meeting with a Nama official. In the course of that meeting, the official in question is alleged to have been highly critical of the manner in which the O'Flynn Group had conducted its business prior to the crash.

Mr O'Flynn has expressed his annoyance and upset to friends and colleagues on several occasions in recent years in relation to this particular meeting.

"Michael was extremely angry about it and I would be very surprised if he doesn't tell the inquiry," one friend said.

It is widely anticipated within the property sector that Mr O'Flynn, who is perhaps best known for developing Cork's Elysian Tower, will use the opportunity given to him by the Banking Inquiry to detail the poor treatment he and other developers believe they received at the hands of Nama officials. Several developers who have spoken to the Sunday Independent have expressed the view that this attitude was informed by public statements given by its most senior officers, namely its chairman Frank Daly and its CEO Brendan McDonagh, in which they have been critical of developers.

One developer pointed to Mr Daly's appearance before the Banking Inquiry on April 22 last in which he launched a scathing attack on the development sector generally, accusing major borrowers of poor corporate governance and poor financial controls.

Mr Daly said: "The banks were quite clearly lending to individuals and companies that, notwithstanding the massive sums involved, had little or no supporting corporate infrastructure, poor governance and inadequate financial controls."

Friends of Mr O'Flynn say they expect him to address the points made by Mr Daly in some detail when he appears before the Banking Inquiry on Thursday. He is expected to give a robust defence of the manner in which he and other experienced and professional developers conducted their business and banking relationships.

A source familiar with the matter said he would be surprised if Mr O'Flynn does not take the opportunity to tell the inquiry how the O'Flynn Group's business plan was rejected by the agency without any discussion of its contents.

Mr O'Flynn's evidence to the Banking Inquiry will invariably add to the political and public scrutiny Nama is facing following a series of potentially damaging claims made about the agency and its officials by Independent TD Mick Wallace. Last Wednesday, the Wexford politician used Dail privilege to claim that a Nama official had sought and received a payment of €15,000 in a paper bag from a construction company in return for ensuring the firm's exit from Nama. Mr Wallace further alleged the employee in question had demanded and received another €15,000 from the same company. Such was the seriousness of the claim, Nama CEO Brendan McDonagh wrote to Garda Commissioner Noirin O'Sullivan the same day requesting that gardai initiate an investigation into the matter. In a statement, Nama said the allegation that an employee had demanded and accepted a bribe "cast a shadow over all Nama officers".

Several inquiries are already under way both here and in the North on foot of Mr Wallace's claim two weeks ago under Dail privilege that, in the course of Nama's sale of its £4.5bn (€5.7bn) Northern Ireland loan book, £7m had been deposited in an offshore bank account for the benefit of a politician or political party. Defending its handling of the sale, Nama has stressed that the allegation refers not to it, but to the conduct of the purchaser of the Northern Ireland loan book - code-named Project Eagle.

While Mr O'Flynn is one of four major property developers to be called before the Banking Inquiry to give evidence, he is the only one of them to date to have exited from Nama following the sale of his companies' loans to the US private equity giant Blackstone last year. As such, he is viewed by his peers within in the property industry as being free to comment on Nama in a manner that the other three individuals - Derek Quinlan, Ballymore boss Sean Mulryan and Castlethorn chief Joe O'Reilly are not.

Mr Quinlan, for his part, avoided questions on Nama when he appeared before the Banking Inquiry two weeks ago, saying: "I have an ongoing private commercial relationship with Nama. Due to the nature of this relationship, I do not believe it is appropriate for me to comment on the institution at this time."

Given Mr O'Flynn's comments in relation to the cause of the country's current housing crisis in past interviews with the Sunday Independent, he is expected to tell the inquiry of the responsibility he believes Nama must take as a result of its alleged failure to anticipate the shortage in supply which has now arisen in Dublin, Cork and Ireland's other major cities.

Sunday Independent

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