Business of Committee (Resumed)

We will resume in public session. We are joined this afternoon by the Comptroller and Auditor General, Mr. Seamus McCarthy, and he is accompanied by Ms Maureen Mulligan, deputy director of audit.

Before we get into the afternoon's business, I want to comment on the private session we had before the break. Two items came up in the private session and I want to put the result of that on the public record.

The first item dealt with correspondence Nos. 1923, 1924 and 1929. One was from the Chairman of the Joint Committee on Justice and Equality, and the other two were from the Ceann Comhairle's office in respect of the same letter. The Joint Committee on Justice and Equality wrote to us saying that they believed we went outside our remit in our discussions on the Vote for the Irish Prison Service three weeks ago. I informed the committee that I had spoken to the Ceann Comhairle yesterday evening on the matter. The Ceann Comhairle has indicated that the matter is being considered by the Committee on Procedure and Privileges, CPP, I think next week. I am satisfied, as Chairman, that we were within our brief and remit when we discussed the Vote. Without further discussion, and to inform people, I expect the CPP to deal with the matter appropriately and that the Committee of Public Accounts will continue its work within its remit, as we always do.

I shall move on to the next item. We had legal advice from the Office of the Parliamentary Legal Advisor, OPLA, in Leinster House. On 28 November 2018, the committee agreed to seek a briefing from the office in respect of section 172 of the National Asset Management Agency Act 2009, following the committee's discussion in respect of NAMA's correspondence on the topic regarding Project Nantes. We had a detailed briefing. This follows on from the letter from NAMA, No. 1761, which we published last December. Essentially, the parliamentary legal advisor advised us that she agrees with the interpretation of section 172, as outlined in the NAMA letter before Christmas. We received a detailed briefing but that is strictly privileged so I am not in a position to publish or distribute that.

A clear distinction was made between when NAMA sells property over which it has a charge and when it can separately sell a loan or a loan book. The parliamentary legal advisor said section 172 applies to where NAMA sells a property over which it has a charge but does not apply in respect of a loan sale. I will ask the Comptroller and Auditor General to correct me if I say anything wrong on this because he is familiar with this issue. A section 172 declaration is not required in respect of a loan sale even though NAMA has been seeking one in many situations. It was not legally required, however. It was probably an extra element of assurance for NAMA but it was not legally required. It is another day's work but not for this committee. The legislation did not specifically deal with the sale of loans. Only the sale of property was dealt with when the NAMA legislation was being established, all of ten years ago. The legal advice to us stated a director of a company that was involved in purchasing a property or even a loan book from NAMA is not necessarily a connected person. A person is only a connected person under the strict criteria laid down in the Act. In layman's English, that is if one is an associated debtor, or if the organisation buying is a corporate body, a subsidiary or a related company, or if the person is a nominee of the debtor. A director of a company can be a director of a company that is involved in these transactions that may not be a nominee of the original debtor. There was a presumption because a director was involved in this that it was in contravention of the NAMA legislation. NAMA is satisfied it was not and the parliamentary legal advisor has confirmed that view to us today. I am just putting this on the public record because many people have been asking us for the up-to-date position on it. This committee accepts the position as set out by NAMA and as now confirmed by the OPLA.