The National Assets Management Agency (Nama) faces further grilling on a deal that TDs believe potentially cost taxpayers up to €29 million.
Nama's sale of debts due from boom-era property player Quinlan Private to Luxembourg-based Clairvue-Nantes for €38.6 million "resulted in a potential loss to the taxpayer of approximately €29 million", the Dáil's Public Accounts Committee has found.
Committee chairman Brian Stanley and members Marc McSharry and Catherine Murphy indicated on Thursday that the agency should return to face further questions on the 2012 deal, dubbed Project Nantes.
The committee’s report also criticises Nama for failing to fully investigate links between Avestus, which was managing the loans for the agency, and the buyer.
One of Clarevue-Nantes’ directors, Mark Donnelly, was a former Quinlan Private employee and a senior figure in Avestus.
No breach of Act
However, the report acknowledges that there was no breach of the Nama Act, the legislation that established the agency.
The committee does not name Mr Donnelly. He was not a partner in Quinlan Private so had no personal interest in the loans. Nor did he owe money to Nama.
The loans totalled €307 million and were secured against on hotels, offices and homes in the Republic, UK and Europe, along with some of the Quinlan partners' personal liabilities, which were tied to properties or shares. Nama bought them for €46.2 million.
The committee’s report blames the potential €29 million loss to the taxpayer on Nama miscalculating the target price for their sale, its failure to get an up-to-date appraisal of the loans and the lack of a competitive sales process.
Seamus McCarthy, Comptroller & Auditor General, told the committee recently that Nama’s errors understated the value of the loans by €16 million. He acknowledged that a higher target would not necessarily have resulted a better sale price.
Ongoing scrutiny
Mr McSharry said that the committee was “limited in what further action it could take” on the issue. He argued that the case illustrated that Nama should have been subject to ongoing scrutiny by elected representatives through its 10-year career.
Mr Murphy described the link between the buyer, Clarevue Nantes and Avestus as problematic. She added that the committee should have Nama back in.
At a meeting in October, Nama chief executive Brendan McDonagh acknowledged the agency’s mistakes with Project Nantes.
He stressed he was “angry and unhappy” with Avestus for not telling Nama that one of its staff was a Clarevue director, saying it would have been better if the firm had been upfront about this.
