Tuesday 22 October 2019

Nama's lack of checks on buyers 'unacceptable'

Nama CEO Brendan McDonagh
Nama CEO Brendan McDonagh
Laura Larkin

Laura Larkin

Ireland's 'bad bank' Nama has been urged to verify all so-called 'section 172' declarations that claim buyers of assets are not connected to the original developers by the Dáil's powerful Public Accounts Committee (PAC).

Section 172 of the National Asset Management Agency Act 2009 bans any buyer of an asset from the agency having a connection to the debtor who'd originally borrowed against it.

Buyers must sign a declaration to that effect.

But the PAC described as "unacceptable" a lack of "systematic and routine verification of section 172 declarations" by the agency.

The legislation was designed to ensure no conflict of interest arose on the sale of Nama assets.

However, there was a "lacuna" in the legislation, PAC chairman Seán Fleming said.

The Fianna Fáil TD said that it was not envisaged at that time that the rules would need to apply to loan sales and not just assets. It also did not automatically assume that a director of a company is a connected person.

However, he said that a "practical view" had been taken by the committee that with 90pc of its work complete, it did not need to legislate at this stage. The issue was discussed privately by the committee and it was decided to make its recommendations on cases going forward only.

The Comptroller and Auditor General (C&AG) reviewed the sale of 80 assets and found that 78 of these were required to have a Section 172 declaration, but that no verification process was carried out on these declarations.

Committee member Catherine Murphy said that Nama should be obliged to look back on cases if there is a complaint made.

Ms Murphy was previously informed via a parliamentary question that there had been a Garda complaint under the section - which carries criminal sanctions - but that that investigation appeared to be ongoing.

Separately Nama - headed by CEO Brendan McDonagh - also examined an alleged breach of the rule in another case, but no issue was found.

She said the issue was a "point of frustration" for people and claimed there was "anecdotal evidence" that more declarations may require investigation.

She also questioned whether gardaí had sufficient resources to pursue such cases.

Nama declined to respond to queries about what the PAC had said when contacted by the Irish Independent.

During its examination of Nama's remit the PAC also looked at its functions in providing housing.

PAC also said that the acceptance by local authorities of just 40pc of the 7,000 residential units and sites suitable for housing needed to be looked at again due to the housing crisis.

It has recommended that those housing units and sites which are suitable for housing be re-offered to councils as the country struggles to meet housing demand.

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