THE former NAMA executive who bought a house from the ‘toxic bank’ last night insisted he had been given permission to do so.
his is despite NAMA’s code of conduct appearing to ban executives from becoming involved in private dealings with property on its books.
Enda Farrell, who was a NAMA executive at the time, said he was given general clearance and ended up buying a house and two acres of land in Lucan from developer Thomas Dowd for €410,000 in a private deal last December.
The revelation that Mr Farrell bought a house on NAMA’s books raises serious questions over how much the so-called ‘bad bank’ knows about who is buying property it controls. It throws doubt on NAMA's ability to keep track of deals, as it sells off swathes of land here and overseas.
The purchase of the Lucan property appears to have gone through without the agency asking any questions. Now NAMA is under intense pressure to explain how such a senior executive was able to do a private deal.
Mr Farrell left NAMA in April and now works for a British investment fund that is trying to buy property and land in distressed sales here.
A spokesman for Mr Farrell insisted yesterday that he did seek permission from the bad bank's head of compliance for general permission to buy a home from NAMA.
But he did not specifically inform NAMA that he had bought the property in Lucan; nor did he register the purchase with NAMA as required.
Mr Farrell strenuously denies any wrongdoing and says he got permission to buy a NAMA property, before approaching Mr Dowd on a private basis. The bad bank had promised not to sell land back to developers at knock-down prices.
But its internal controls don't appear to have picked up on Mr Farrell's transaction, despite it dating back to last December.
It is now probing the purchase -- and may begin a larger scale investigation into compliance amid concerns that it was not limited to just one case.
The law makes it a criminal offence to benefit from inside information obtained while working in NAMA. And the agency's code of ethics makes it clear that executives should avoid any "potential conflict of interest" by dealing with an "individual, firm, company or other entity with which NAMA engages in transactions of any nature or description".
NAMA declined to comment yesterday on Mr Farrell's claim. The toxic bank is one of the most secretive state organisations and is specifically excluded from the Freedom of Information Act.
NAMA did confirm that auditors Deloitte are investigating the matter, without naming Mr Farrell, and may take action including a wider probe into compliance at the agency. The initial probe aims to establish the facts of the case, it added.
NAMA declined to confirm or deny yesterday whether Mr Farrell had been given permission to buy NAMA properties for his private home.
But the agency did say that it had already established that there was no evidence the property was bought below market value or that Mr Farrell had any part in authorising the deal from within.
Mr Farrell and his wife Alice Kramer bought Sundaywell in Lucan at the end of last year from Mr Dowd, who was a former business associate of international property developer Derek Quinlan.
Mr Farrell, who is in his 30s, had previously got planning permission in order to do up the five-bedroom house.
He denied yesterday using insider information to target the house owned by Mr Dowd, saying it was public knowledge that the property was in NAMA.
He added that the house was unoccupied and in bad condition, so it was reasonable to assume it was for sale. He then approached Mr Dowd directly.
Mr Farrell says he simply approached Mr Dowd and offered to buy the house and land, which had previously been sold for €1.2m about 10 years ago.
Mr Dowd, for his part, obtained permission from NAMA to sell the land.
But the deal apparently went though without NAMA knowing that property it controlled was sold to a NAMA executive.
Mr Farrell left NAMA in April to work as the head of the Irish operations of UK-based Forum Partners, which is a €5bn real estate investment management firm that is scouring the Irish market, and other markets, for distressed debt deals.
NAMA rejected concerns back in March that Forum Partners might benefit from Mr Farrell's inside knowledge.
A NAMA spokesman said then that no properties were sold without a competitive bidding process and that all properties were independently valued before any sale. All sales are also reviewed by the Comptroller & Auditor-General's office.
NAMA's code of ethics makes it clear that executives should avoid "any conflict, or potential conflict of interest arising by virtue of any interest, shareholding, business or professional or other business relationship or other possible conflict of interest an officer has with any individual, firm, company or other entity with which NAMA engages in transactions of any nature or description".