Paying developers €100,000 each saves money, says NAMA
THE National Asset Management Agency (NAMA) has defended itself for paying salaries of €100,000 and more to a number of its debtors, claiming the strategy is saving the state millions of euro.
The agency was criticised for paying 66 developers who are in debt to NAMA more than €100,000 a year.
Three of those are being paid €200,000 -- the same as Taoiseach Enda Kenny.
However, the state bad bank said the strategy was by far the most cost effective method of managing its property empire, which now stretches into the tens of billion of euro.
A NAMA spokesman said paying its debtors who were co-operating with the agency cost a "tiny" amount "compared to the alternative costs we would face by the use of alternative managers".
Two of the developers earning more than €200,000 a year have been named as Sean Mulryan and Joe O'Reilly.
Mr Mulryan has retained day- to-day control over his Ballymore Properties firm, which originally owed NAMA €1.5bn.
It is understood that Mr Mulryan has reduced that debt by at least 50pc through a mixture of aggressive cost cutting and the sale of assets and is on course to clear all his debts.
His firm still has a multibillion-euro property portfolio, with huge interests in London's docklands as well as in Ireland and Czech Republic.
It is currently promoting a number of developments including the Pan Peninsula in London, which consists of 762 apartments including a private cinema and gym.
Ballymore employs close to 500 staff.
Mr Mulryan, through his spokesman, maintained the work he is doing would command a salary of €1.5m in the private sector. Joe O'Reilly's Chartered Land is best known for developing the Dundrum shopping centre. He is believed to have had debts of €3bn when his loans were transferred to NAMA.
Addressing the Oireachtas Public Accounts Committee a fortnight ago, NAMA chief executive Brendan McDonagh said the agency would have to add another 1,000 staff to its 200 current employees if it were to dump the debtors it was using at the moment.
"If we were to appoint receivers to these portfolios, we would need to build up a knowledge base from scratch or bring new people in and pay them the required private sector rate," he said.
"For a portfolio of upwards of €1bn, you will probably pay a receiver in the region of €500,000 and €1m a year to manage the assets.
Meanwhile a number of developers are said to be using bankruptcy proceedings in the UK to effectively hide assets from NAMA and banks here trying to claim funds owed to them.
NAMA, however, insisted that it was "monitoring these moves very closely".