Department of Finance Office of the Minister
UpperMerrion Street, http://www.irlgov.ie/finance
Dublin Ireland.Our Ref: 11/0035/MF 29 September 2011
Dear Mr Clarke
The Minister for Finance, Mr Michael Noonan TD, has asked me to thank you for your e-mail of 13 September regarding the media reports about the High Court case between the Dalys and NAMA, which seemed to suggest that NAMA was cutting a sweetheart deal in this case. While the facts set out hereunder may or may not assuage your concerns in this matter, it is important to explain these facts to set some context at the very least.
The first point is that NAMA can only operate in accordance with the law in general and the provisions of the National Asset Management Act 2009 in particular. Section 211 of the NAMA Act was included specifically to deal with cases where assets were being transferred into the names of relatives in an attempt to hinder NAMA. This section providesthat in certain circumstances the High Court may, upon application by NAMA or a NAMA group entity, declare disposals of assets of debtors and guarantorsetc. to be void if the Court is satisfied that (i) the effect of that disposal is prejudicial to the acquisition by NAMA or a NAMA group entity of one or more bank assets and (ii) it is just and equitable to do so.
The second point is that Mr Frank Daly, the Chairman of NAMA has stated that as the agency is charged with maximizing the commercial return to the taxpayer, i.e., making the highest amount it can on the loans it is handling, it is regularly faced with difficult choices to make between working with a developer on his loans or foreclosing through the appointment of a receiver. The option selected by NAMA is whichever is likely to generate the higher return for the taxpayer. That is the basis for engaging with a borrower. It is certainly not corruption. This particular case was one where the borrower was resisting the attempts of NAMA (and also AIB) to appoint a receiver after attempts to reach a working agreement with the borrower had failed.
The third point is that to date NAMA has secured the reversal of a significant number of asset transfers as part of its business plan agreements with debtors. The Minister understands from NAMA that only a minority of debtors engaged in asset transfers to spouses, relatives or other parties but, in cases where it did occur, the reversal of such transfers is a key requirement imposed by NAMA before it can agree to a debtor’s business plan. Failure by a debtor to accept this requirement is likely to lead to enforcement action.
The final point is that the media reports have glossed over the fact that this was afailed attempt by the Dalys to prevent the appointment of receivers to their assets by NAMA and by AIB. They sought a High Court injunction against the appointment of the receivers and the Court refused their application. NAMA has confirmed that it is now examining all options for the repayment of the Daly loans and that any proposals made prior to the time of the appointment of receivers to the properties have been taken off the table.
Private Secretary to the Minister for Finance
Dear Mr. Sean Kinsella,
May I ask you to pass on to the minister my thanks for your prompt and indebt response?