Wednesday 29 January 2020

Estate agents 'conflicted' in Nama sales

Comptroller and Auditor General Seamus McCarthy Picture: Tom Burke
Comptroller and Auditor General Seamus McCarthy Picture: Tom Burke
Ronald Quinlan

Ronald Quinlan

An examination by Comptroller & Auditor General (C&AG) Seamus McCarthy of Nama property sales has found that over one in four involved actual or perceived conflicts of interest on the part of the estate agent handling the transaction.

The finding is contained in the C&AG's second progress report on Nama, which was published last week.

Having reviewed the sale of a sample 70 assets, McCarthy's team found that the estate agents had made disclosures of actual or perceived conflicts of interest in 18 cases.

In one case, the C&AG found the receiver of the property had also acted as the sales agent. The C&AG noted that a conflict of interest disclosure had not been made to Nama before the sale.

Nama's policy dictates that sales agents are required to disclose any commercial relationship with the Nama debtor in the previous five years at the outset of the sale process. Once the sale has been concluded, they are obliged to disclose any actual or perceived conflict of interest between the agent, debtor and purchaser.

While the process followed by Nama in three of the 18 property deals was deemed to be "reasonable" by the C&AG, he said "no evidence of assessment by Nama of the implication of the conflicts [of interest] was available" for the 15 other transactions where conflict of interest disclosures had been made.

Defending its conduct, Nama told the C&AG that the conflicts that had been disclosed "were not deemed material to affect the transaction/performance of the sales agent".

Referring to the case of the receiver who had acted as the sales agent on the same property, Nama said the full par debt had been recovered, and that this had been anticipated when the receiver had been appointed.

Nama said this negated the need for a conflict of interest disclosure when the receiver appointed another division within their own firm to act as the sales agent.

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