Thursday, 26 Mar 2015

Written Answers Nos. 80-89

IBRC Operations

Questions (80, 81)

Catherine Murphy

Question:

80. Deputy Catherine Murphy asked the Minister for Finance if records were kept of the meeting or meetings he or officials of his Department held with the Irish Bank Resolution Corporation in respect of a sale (details supplied); if so, if he will include these records in his response; if not, the reason; if not, the questions he raised in respect of payment to directors of the company in view of the large debt that was being written down, and the answers he received; the questions he raised in respect of the number of tenders considered; the reason the bid was more advantageous to the State; the questions he raised in respect of those who were involved in the tender process in the various entities; and if he will make a statement on the matter. [12546/15]

Catherine Murphy

Question:

81. Deputy Catherine Murphy asked the Minister for Finance if the former Irish Bank Resolution Corporation extended a €10 million credit facility to an entity which was already heavily indebted to it (details supplied) at any point between 2010 and its sale in 2012; if he will confirm that all due diligence procedures were followed in advance of the forwarding of this line of credit; if this €10 million or outstanding portion thereof was specifically recovered through the sale of the entity concerned or if the money was written down entirely at that point; and if he will make a statement on the matter. [12621/15]

Written answers

Minister for Finance

I propose to take Questions Nos. 80 and 81 together.

As way of background on the transaction referred to in the question, following a meeting between officials from my Department and senior management of IBRC held on 31 May 2012 it was agreed that my Department would review this transaction to better understand the decisions taken by IBRC. This review took place, by way of a meeting between officials from my Department and senior management of IBRC, on 11 June 2012. Following this review, a further meeting was held on 25 July 2012, which I attended along with officials from my Department and senior management from IBRC. At this meeting, the transaction referred to in the question was discussed further, along with a number of other topics. A further meeting between the former Secretary General of the Department of Finance, John Moran, and the then CEO of IBRC took place in August 2012 at which this matter was further discussed.

The file notes, minutes and other records regarding these meetings are currently the subject of Freedom of Information requests and will be released in due course as part of these Freedom of Information requests should officials in my Department consider their full release to be appropriate. The Deciding Officer will make the materials released under these Freedom of Information requests available to you upon their release.

Until those decisions are made by the Deciding Officer, I can confirm that at the meeting which I attended on 25 July 2012, it was put to senior management of IBRC that officials in my Department had concerns with a number of decisions taken by IBRC in relation to the sale of the company referred to in the question including the decision to allow the sale process to be led by advisors of the company referred to in the question, the decision to exclude trade buyers, the timing of exclusivity and the payment to shareholders. Senior management of IBRC confirmed to me at this meeting that the transaction involving the company referred to in the question was thoroughly assessed by the Board of IBRC prior to them approving it and that the transaction was managed in the best manner possible to achieve the best result for the State.

In relation to the Deputy's query on a €10 million credit facility extended to the company referred to in the question between 2010 and the sale of the company in 2012, I am advised that it would not have been typical for decisions around credit facilities to be disclosed or discussed with Department of Finance officials unless required under the Relationship Framework which governed interactions between the Bank and the Department of Finance as these activities typically would have been within the ordinary course of business for the Bank.

Officials in my Department have also contacted the Special Liquidators but they are unable to comment on individual cases as the information requested is confidential and it would not be appropriate for them to release such information.

This being the case, I am unable to comment further on this matter.

IBRC Operations

Questions (82)

Catherine Murphy

Question:

82. Deputy Catherine Murphy asked the Minister for Finance if he will confirm the recent media reports which state that the board of the Irish Bank Resolution Corporation turned down a reportedly higher offer for an entity (details supplied) because one element of that proposal included a mandatory eight week due diligence exercise; if his attention has been drawn to the fact that had the board chosen this reported bid, the new framework agreement would have been in place once the said eight week period had expired; if he has considered that the sale of the entity was rushed in that respect; if he has invited any explanation as to what end such a rush was undertaken for; and if he will make a statement on the matter. [12628/15]

Written answers

Minister for Finance

As part of parliamentary question 97 which was answered on 12 March 2015, the Deputy is aware of the process which was undertaken to introduce a revised Relationship Framework for IBRC and the reasons behind this.

In relation to the sale of the company referred to in the question, it was after representations made by an unsuccessful bidder in the process and subsequent meetings between that party and officials in my Department that my officials met with IBRC and undertook a review of this transaction. Following this review, my officials were made aware that the transaction involving the sale of the company referred to in the question was run by the company referred to in the question along with its advisors. This review raised concerns with the quality of some of the decisions taken in respect of this transaction, including, among others, that a higher bid for the company referred to in the question was received after entering into an exclusivity agreement with the ultimate winning bidder.

In light of concerns stemming from the review of the transaction by officials in my Department, I subsequently met with IBRC's Chairman and CEO to discuss this transaction. The Chairman and CEO confirmed to me that the transaction process and its terms had been thoroughly assessed by the IBRC Board and that the transaction was managed in the best manner possible to achieve the best result for the State.

The file notes, minutes and other records regarding the review of this transaction by my officials are currently the subject of Freedom of Information requests and will be released in due course as part of these Freedom of Information requests should the Deciding Officer consider their full release to be appropriate. The Deciding Officer will make the materials released under these Freedom of Information requests available to you upon their release.

Tax Rebates

Questions (83)

Michael McGrath

Question:

83. Deputy Michael McGrath asked the Minister for Finance when refunds of deposit interest retention tax paid by first-time buyers will be paid; and if he will make a statement on the matter. [12629/15]

Written answers

Minister for Finance

I am advised by the Revenue Commissioners that Finance Act 2014 inserted a new section 266A into the Taxes Consolidation Act (TCA) 1997.  That section provides for a repayment of Deposit Interest Retention Tax (DIRT) on certain savings held by a qualifying first time purchaser prior to the purchase of a home, where that purchase is made between 14 October 2014 and 31 December 2017.

A qualifying first-time purchaser is a person who, at the time of the purchase, has not previously purchased or built any other dwelling, either individually or jointly with any other person.

The section provides for repayment of DIRT paid in respect of interest earned by a first-time purchaser in the 48 months prior to the purchase of a dwelling for use as his/her place of residence. This repayment is limited to DIRT relating to deposits of up to 20% of the purchase price of the home.

Revenue is developing an online system to facilitate applications for these DIRT repayments. This is currently being finalised and Revenue will publish further details in the coming weeks.

NAMA Expenditure

Questions (84)

Michelle Mulherin

Question:

84. Deputy Michelle Mulherin asked the Minister for Finance the amount that has been paid by the National Asset Management Agency in legal and other fees to consultants and advisers for each year from 2010 to 2014 and in 2015 to date; and if he will make a statement on the matter. [12630/15]

Written answers

Minister for Finance

A breakdown of the professional fees sought by the Deputy is set out by category of expense for each year from inception to end-2014. The figures for 2015 will be collated and reported in accordance with NAMA's scheduled financial reporting. 

Legal, Consultants and advisory	€'000	€'000	€'000	€'000	€'000	€'000
	Actual 2010	Actual 2011	Actual 2012	Actual 2013	Actual 2014	Total
Portfolio Management fees	5,087	15,992	6,882	5,549	3,775	37,285
Legal fees	3,311	9,478	4,634	2,975	8,574	28,973
Due diligence (further breakdown below)	29,605	44,505	4,086	-	-	78,196
Other internal audit fees	-	-	288	-	-	288
Tax fees	463	562	531	1,223	754	3,533
Cross operational organisational project	-	-	-	193	43	236
Total	38,466	70,537	16,421	9,940	13,146	148,510
Less due diligence costs recovered on loan acquisitions*	-29,605	-34,505	-	-	-	-64,110
Due diligence breakdown	8,861	36,032	16,421	9,940	13,146	84,400
Legal	7,062	7,053	85	-	-	14,200
Loan valuation	9,295	20,900	2,187	-	-	32,382
Property	4,419	7,607	513	-	-	12,539
Audit	8,829	8,945	1,301	-	-	19,075
Total non-recurring due diligence costs	29,605	44,505	4,086	-	-	78,196*

* The difference between maximum amount recoverable of €64.11m and actual cost of €78.196m was expensed to NAMA's P&L.

NAMA Staff Data

Questions (85)

Michelle Mulherin

Question:

85. Deputy Michelle Mulherin asked the Minister for Finance the staffing numbers at the National Asset Management Agency for each year from 2010 to 2014 and in 2015 to date; and if he will make a statement on the matter. [12631/15]

Written answers

Minister for Finance

Under section 42 of the National Asset Management Agency Act 2009, the NTMA assigns staff to NAMA. Accordingly, as the Deputy is aware, all NAMA staff are employees of the NTMA. I am advised that the number of staff assigned by the NTMA to NAMA is as follows: End 2010 - 100; End 2011 - 193; End 2012 - 224; End 2013 - 331; End 2014 - 369; End February 2015 - 363.

NAMA Staff Remuneration

Questions (86)

Michelle Mulherin

Question:

86. Deputy Michelle Mulherin asked the Minister for Finance the number of staff at the National Asset Management Agency who were paid in excess of €100,000 for each year from 2010 to 2014 and in 2015 to date; and if he will make a statement on the matter. [12632/15]

Written answers

Minister for Finance

Under section 42 of the National Asset Management Agency Act 2009, the NTMA assigns staff to NAMA.  Accordingly, as the Deputy is aware, all NAMA staff are employees of the NTMA.  I am advised that the number of staff assigned by the NTMA to NAMA that were earning over €100,000 at each year end for 2010, 2011, 2012, 2013 and 2014 are as follows: End 2010 - 51; End 2011 - 87; End 2012 - 92; End 2013 - 110; End 2014 - 112.

Details in relation to 2015 will be published in accordance with the NTMA's scheduled financial reporting.

Mortgage Lending

Questions (87)

Michael McGrath

Question:

87. Deputy Michael McGrath asked the Minister for Finance his views that the Central Bank of Ireland should review the requirement that a property valuation supplied for the purposes of obtaining a mortgage must not be more than two months old at the time when the loan is being drawn down, on the basis that the vast majority of loan applications take three months to complete; and if he will make a statement on the matter. [12633/15]

Written answers

Minister for Finance

I am informed by the Central Bank of Ireland that the basis of the new macro-prudential mortgage lending regulation (S.I. 47 of 2015) is dependent on the value of the property and therefore due consideration must be given to ensure the accuracy of the calculation of the 'Loan-to-Value' of the loan at the date of drawdown. The shorter the time differential between the date of valuation and the date of drawdown will ensure the accuracy of the regulation.

Given that the majority of housing loans are initially sanctioned on an 'approval in principle' basis and that it is possible for a material gap (6-10 months depending on individual banks) between the date the initial valuation is provided and the date of  the loan drawdown, this amendment serves to bring consistency to the industry by seeking that the valuation at drawdown is dated within two months and is reflective of open market value.

NAMA Debtor Agreements

Questions (88)

Michael McGrath

Question:

88. Deputy Michael McGrath asked the Minister for Finance the number of borrowers who have entered arrangements with the National Asset Management Agency that will allow them to reduce their personal exposure on company borrowings if they meet agreed targets; and if he will make a statement on the matter. [12635/15]

Written answers

Minister for Finance

As set out in detail in NAMA's 2010 Annual Report, the outcome of the review of some debtor business plans included possible incentivisation arrangements which would only be triggered if the debtors met very ambitious or 'stretch' financial targets which were set for them.  Such arrangements include amendment to or release of personal guarantees where maximum value has been extracted from the workout and realisation of debtor assets and therefore better-than-expected financial outcomes are achieved on behalf of the State.  I am advised by NAMA that, in this context, it has approved amendments to or the release of personal guarantees in the case of 33 debtors which will only be triggered where a debtor meets the stretch financial targets which have been set for him/her.

NAMA Debtors

Questions (89)

Michael McGrath

Question:

89. Deputy Michael McGrath asked the Minister for Finance for the remaining borrowers on the National Asset Management Agency’s book, the number who have personal guarantees attaching to their loans; and if he will make a statement on the matter. [12636/15]

Written answers

Minister for Finance

I am advised by NAMA that of the 178 remaining NAMA-managed debtor connections, which make up 89% of NAMA debt, 146 connections have personal guarantees in place.  The remaining NAMA-managed connections comprise mainly Special Purpose Vehicles (SPVs).

  As regards the debtor connections managed on NAMA's behalf by AIB and Capita, I am advised that there is widespread personal recourse and cross collateralisation across the entire portfolio.