Nama sale error costs taxpayers at least €10m
THE taxpayer lost over €10million due to a miscalculation by Nama in its sale of loans to a Luxembourg investor firm, the Dáil Public Accounts Committee has found.
The scale of the problem could be far worse as a PAC report released yesterday found the National Assets Management Agency’s failure to conduct an open sale and up- t o - date appraisal of the loans led to a potential loss of €29million.
Its report into the sale comes after the Comptroller & Auditor General published its own report this time last year into the 2012 sale of property to Luxembourg-based firm Clairvue- Nantes Luxco, a sale referred to by Nama under the code-name Project Nantes.
The debt sold to Clairvue originated from a firm called Quinlan Private, which was a major player in the Celtic Tiger property market before its debt had to be purchased by Nama after the crash.
The property loans in the Project Nantes bundle include debt on offices, hotels and homes in Ireland, the UK and Europe. The loan portfolio comprised 165 separate loans in 42 loan packs. Some were property-backed loans and the Quinlan property ‘was widely geographically dispersed’, the C&AG found.
Around a quarter of the properties are in Ireland. The rest are in Europe and the US. In all, the properties included ‘development property, commercial property (office blocks, industrial buildings, retail and hotels) and some residential loans’, the Comptroller found. His report doesn’t list which specific buildings are included.
At a hearing last month, Séamus McCarthy, C&AG, told the PAC it was ‘difficult to conclude’ that Nama got the best possible price when it sold some of Quinlan’s loans to Clarevue-Nantes for €26.7million. He said that errors by Nama, including understating the value of one of the loans by €16.1million, left the target price for the Project Nantes loans about €29million lower than it should have been – findings that are repeated by the PAC in its own report yesterday.
The Sinn Fein chairman of the PAC, Brian Stanley, is in the middle of a storm of controversy about proIRA and allegedly homophobic tweets. Yesterday, he sidestepped the furore to address the Nama issue and said that there was a ‘blatant failure to implement appropriate levels of transparency and good practice’, especially in the lack of documentation about the sale.
On a separate matter raised during the examination of Nama’s 2019 financial statement, the PAC noted that Nama had promised to build 20,000 homes on Nama-controlled lands by the end of 2020. Planning permission has been sought for 7,300 properties that have yet to begin construction.
Mr Stanley said Nama must make sure these properties are built.
‘Members noted Nama’s reasons for construction delays, including Covid-19 and issues such as water infrastructure and access to sites with planning permission. However, the Committee is of the opinion that Nama must continue to work to ensure that the target of 20,000 residential units is met by the end of 2021,’ he said.
Going to press, Nama had not yet replied to a request for comment.
‘Blatant failure on transparency’