Monday 14 October 2019

Finance Minister Paschal Donohoe criticised by Public Accounts Committee for failure to stop defaulting debtors from buying back assets from Nama

Sean Fleming, chairman of the Public Accounts Committee
Sean Fleming, chairman of the Public Accounts Committee
Finance Minister Paschal Donohoe. Photo: Gareth Chaney, Collins
Catherine Murphy spoke out

By Hugh O’Connell, Political Correspondent

The Public Accounts Committee has criticised Finance Minister Paschal Donohoe’s refusal to insist that defaulting debtors are not involved in repurchasing assets taken over by Nama.

Nama - the state’s bad bank - believes it would a time-consuming and costly process to verify written declarations by developers that they are not involved in the repurchasing of bad loans taken over by the agency during the financial crash.

It also warned that “comprehensive verification” of purchaser declarations would imply “many purchasers of Nama-secured assets are wilfully breaking the law”.

Mr Donohoe told the Public Accounts Committee that Nama had informed him that verifying developers’ claims, as the committee recommended, “would give rise to a number of serious practical difficulties which could have an adverse commercial impact on its sales activities”.

PAC Chairman Sean Fleming said this morning that the committee had “never suggested that Nama clients were wilfully breaking the law” and that it was only recommending “some verification”.

The Fianna Fáil TD pointed out that Revenue made similar checks of self-assessing taxpayers. “Just because they do spot checks doesn’t mean a presumption that all taxpayers are wilfully breaking the law,” he said.

Social Democrats TD Catherine Murphy said that Nama legislation in this area was “flawed” when it comes to preventing developers from re-purchasing their loans. “I have no doubt that there are people back in control of their assets,” she claimed under parliamentary privilege.

Section 172 of the Nama Act stipulates that the agency is prohibited from selling loans or property to defaulting borrower or connected parties. Those purchasing Nama assets usually make a written declaration that they are not in breach of this clause.

However, in its periodic report earlier this year PAC said it was unacceptable that there was a “lack of systemic and routine verifications” of these declarations and recommended a system be put in place.

Mr Donohoe told Ms Murphy in a parliamentary answer in February that An Garda Síochána were investigating an alleged breach of this rule.

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