BUSINESS OPINION:There is nothing terribly unfair about asking someone who benefited more than most from the boom to suffer the 'stigma' of Nama, writes JOHN McMANUS

IT IS possible to have a certain sympathy for Paddy McKillen. Despite apparently treading a far more careful path than his peers, the property tycoon is being sucked into the National Asset Management Agency (Nama) all the same.

The agency will this morning seek to have a challenge from McKillen to his inclusion in Nama fast tracked into the Commercial Court.

The businessman has claimed that – in respect of a “fully performing” €80 million loan from Bank of Ireland which is earmarked for the agency – he has not be given a chance to argue that his loans do not qualify for Nama and has also been denied the chance to query the values put on the loans.

McKillen also says he has been denied the opportunity to refinance his loans – presumably with non-Irish banks – in order to take them outside the scope of Nama.

All of this breaches his property rights under the Constitution and European Convention on Human Rights, it is claimed.

The Commercial Court will decide whether he is right. But McKillen’s decision to challenge Nama has already highlighted the inevitability that something as fundamentally crude as Nama was going to produce winners and losers.

The basic premise of the agency is to strip the banks of their entire portfolios of land and development loans, good, bad and indifferent. In theory the good and the bad will net out over time, possibly returning a small profit.

Thus, if you had an exposure in this area that was greater than €5 million, you are going into Nama, regardless of whether you are servicing your loans or not. Not only that, all your related borrowings go in as well.

McKillen would appear to be one of the losers, but even that is debatable. The first point is that if McKillen is as resolutely solvent as he says then he surely has little to worry about. In theory Nama steps into his bank’s shoes on the same terms and conditions and as long as he keeps paying his debts things continue as normal.

There is a possibility that Nama might take the view that he is not as strong as he thinks he is – hence the issue over valuations – and put pressure on him to sell assets to reduce debts.

But again, it’s hard to see how they can make him do anything if he is complying with the terms of his loans.

What McKillen seems to be most upset about is the stigma of being a client of Nama, which he believes will affect his ability to raise money in the future.

It is around this point that one starts to run out of sympathy with him and what might be seen as a certain myopia.

Nama is the solution to a banking crisis that threatened the very solvency of the Irish state. We have become conditioned at this stage to talk of billions but it is worth remembering that on a per capita basis it is part of the biggest and possibly most expensive bank rescue ever attempted. Even if everything works out there will be a bill somewhere north of €25 billion for plugging holes in Anglo Irish Bank and Irish Nationwide Building Society.

The burden of all this falls not on the individuals who were in a position to exert real influence over events.

Neither does it fall on those who benefited most from the boom. It falls instead on backs of every citizen and will be felt for a generation. If we did not have to find the money to rescue the banks the tax hikes would not have been so large, nor the cuts in Civil Service pay and social welfare benefits so deep.

In effect McKillen is simply being asked to shoulder a bigger part of the burden. And leaving aside the legal issues that will be settled by the court it’s pretty easy to argue that there is nothing terribly unfair about that.

He may, as he said, have stopped investing in Ireland as long ago as 1998 but he still benefited more than most – both directly and indirectly – from madness that infected Ireland.

We do not actually know that much about McKillen’s business, but one suspects we will find out more.

It will be interesting to find out the extent to which his empire was built on the back of the crazy tax breaks and reckless behaviour by Irish banks for which the taxpayer is now picking up the tab. McKillen might have only been drinking glasses of shandy but he was at the same party that Bernard McNamara, Derek Quinlan and the other Nama-bound property tycoons got wasted at.

Leaving all that aside, McKillen might also wonder how many meals were bought in his Wagamama’s or Captain America’s restaurants on the back of the boom which has now burst so spectacularly.

Equally, how many punters whose euros paid the rent on the shops in the Jervis centre were doing so with money they didn’t have, but now have to repay.

The idea that he can now escape any of the consequences of the collapse – which by his own analysis seems to amount to little more than somereputational damage – somehow seems wrong.

What is worse is the implication that at the same time the rest of us should not only suck up our punishment in the form of tax hikes and pay cuts but also keep frequenting his shopping malls and buying his noodles and burgers.

A question that McKillen might care to answer is: if he does not have some obligation to help pay to clean up this mess, then who exactly does?