Wednesday 13 December 2017

Nama defends destroying notes from boardroom on €1.6bn Project Eagle sale

Frank Daly, Chairman of NAMA arriving for the meetng of the Dail Public Accounts Committee at Leinster House. Photo: Tom Burke
Frank Daly, Chairman of NAMA arriving for the meetng of the Dail Public Accounts Committee at Leinster House. Photo: Tom Burke
Cormac McQuinn

Cormac McQuinn

NAMA has defended the destruction of notes used to prepare the minutes of board meetings in the run-up to the controversial £1.3bn (€1.6bn) Project Eagle loan sale.

Chairman Frank Daly insisted that "nothing of consequence" was discussed at two meetings in the lead-up to the 2014 sale that was not reflected in the official minutes.

He told TDs at the Public Accounts Committee (PAC) that it was "best practice" to dispose of the secretary's handwritten notes once the finalised minutes had been signed off by the board.

Discussions were held at two board meetings in December 2013 and January 2014 on the minimum price that Nama would accept for its Northern Ireland loan book. A figure of £1.3bn was decided upon. The PAC is examining Project Eagle after the Comptroller and Auditor General (C&AG) found that a probable loss of £190m (€223m) was incurred in the sale. Nama has rejected this finding.

The C&AG report questioned why a 5.5pc discount rate was not applied to the sale as opposed to the rate of around 10pc ultimately used by Nama in the deal. Nama has argued that the report puts forward no external evidence to support 5.5pc and insists the 10pc discount was a market rate.

Mr Daly was questioned by TDs about a lack of explanation in Nama's minutes over how the board decided on the £1.3bn price. PAC chairman Seán Fleming said it was a "surprise" that the handwritten notes of the meetings weren't kept and pointed out that the decision on the "famous 10pc" was not recorded in the minutes.

He said that while TDs were not doubting the word of Nama executives on what occurred, "it would have made life very easy" if the notes had been kept.

Mr Daly conceded that if there had been a specific reference to the 10pc discount rate, Nama officials may not have had to give such lengthy evidence to the PAC. But he said several of them had given an explanation for why the rate was used.

Fine Gael's Josepha Madigan asked Mr Daly if he understood why some might have difficulty in accepting Nama's valuation "when there's no documentary evidence to back it up".

Mr Daly said he accepted it was not specifically recorded in the minutes, but also referred to the "many questions" answered by Nama officials on the matter.

He insisted there was no unofficial record of the board meetings

Earlier Mr Daly outlined how it was the fifth time he had appeared at the committee to answer questions on Project Eagle and that overall Nama representatives had answered almost 2,000 questions.

On the issue of the notes used to prepare the official minutes, he said: "There is no reason why the secretary's handwritten notes should be retained."

He said he understood the same thing happened throughout the public service and referred to guidance from the Institute of Chartered Secretaries and Administrators that stated such notes should be "promptly destroyed" once minutes were approved. He said Nama's procedures were "very much in line with recommended best practice".

Irish Independent

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