Dáil Éireann Debate, Wednesday - 17 April 2019
44. Deputy Mick Wallace asked the Minister for Finance if he has had discussions with NAMA officials or his officials with regard to the UN special rapporteur letter on Ireland which stated that 93% of NAMA assets have been sold to foreign investors; and if he will make a statement on the matter. [17801/19]
View answerThe question relates to the UN special rapporteur's letter on Ireland which states that 93% of NAMA assets have been sold to foreign investors. I am not sure where the UN rapporteur got his figures but I would expect NAMA to know exactly how much it has sold and to whom. It appears that this is not the case. In a press release last week, NAMA stated that 69% of its asset sales went to Irish companies but, last November, NAMA told the Committee of Public Accounts that 69% of its assets were sold to foreign companies. The Minister might be able to provide a definitive answer.
I am advised that the formal response to the UN joint communication relating to housing will be delivered by the Tánaiste in early May and that input for this response is currently being gathered, including in my Department.
In the context of the UN communication relating to NAMA, I wish to clarify a number of points. First, I am advised that the reference to a figure of 93% in the letter refers to loan sales only and does not include sales of property assets securing NAMA’s loans. To date, in excess of two thirds of NAMA disposals have been sales of property assets or refinancing arrangements. Therefore, loan sales relate to less than one third of NAMA disposals. As regards the purchaser profile of Irish properties sold by NAMA debtors and receivers, I am advised that almost 70% of the purchasers were Irish.
Second, the sale of loans by NAMA does not result in a change in the ownership of the underlying properties. This means that the purchaser of the loans does not become a property owner or a landlord; rather, that individual or entity becomes a secured creditor. The registered owner, be they Irish or foreign, retains ownership of the secured property.
Third, foreign assets have accounted for approximately 45% of the assets included as collateral for loan sales undertaken by NAMA. Thus, it is incorrect to infer that loans purchased by foreign investors are secured by Irish assets only. I can assure the Deputy all those points will be made to the UN.
There is a play on language here. Of the €74 billion that went into NAMA, what percentage ended up with foreign entities? The Committee of Public Accounts report into Project Eagle from 2016 showed that NAMA had sold 20% of its entire debt of €74 billion to one company, Cerberus.
This works out at €14.5 billion, whether one calls it loans or assets. This included Project Eagle, Project Arrow, Project Gem and Project Shift. I will not go into the fact Project Gem and Project Arrow were sold to Cerberus after the Project Eagle debacle surfaced and were sold at knockdown prices.
Can the Minister defend the agency selling a fifth of its entire portfolio to one vulture fund? I would expect NAMA to know to whom it sold its loans and assets. There appears to be some discrepancy in its statements, although the Minister may disagree with me on that.
Under section 172 of the National Asset Management Agency Act, a person who is a debtor or debtor-connected party, in relation to an acquired bank asset, is prohibited from acquiring from NAMA any acquired bank assets in relation to which default has occurred. Is the Minister concerned that the Project Nantes loan sale, which I raised with him before, is an example of this? NAMA was not aware that the purchaser, Clairvue, was based in Luxembourg nor was it aware that purchaser and the debtor, Avestus, share a director. It had to go back and investigate because it never verified its original section 172 declarations.
The figures I have shared with the Deputy are figures that have been shared with me by NAMA and put into a different light the statement made by the United Nations on the operation of NAMA. By sharing this information with the Tánaiste, I have no doubt at all that these perspectives will be shared with the UN in response to the communication that it has issued.
The Deputy referred to a number of specific matters on the operation of NAMA and I want to tell him that despite our difference in views on the matter, I am fully satisfied that NAMA has acted in accordance with its mandate on the disposal of its assets. The Deputy will be aware of the different pieces of work that are under way on the operation of NAMA and I await their outcome. I remain satisfied in the matters that have been raised with me that NAMA has operated in line with its mandate.
Some €352 million was owed on the Avestus assets and it got them back through a shell company based in Luxembourg for €26 million. How can the Minister stand over this?
On a different issue, the Minister might be aware of a recent case in the United States involving a NAMA debtor versus NAMA and the National Asset Loan Management, NALM, it was argued by NAMA that NALM was a sovereign and, therefore, subject to the foreign sovereign immunity Act, which prevents lawsuits been brought against other countries. The US Court accepted NAMA's argument that NALM was a foreign sovereign but this is now being challenged.
As the Minister is aware, NALM is a private company. The Minister's Department has indicated to the IMF, the World Bank, the ECB and EUROSTAT that NALM is 51% privately-owned, which was done to get around the state aid rule. I am checking if the Minister's Department has any involvement in the US court case or if he is concerned that NALM is being portrayed as a State entity, when it is a private entity, of which the Government made sure.
I am not involved in the detail or decisions that are made in individual court cases. The Deputy will be aware as to how NAMA has been set up. I am responsible for setting its mandate and for influencing and setting the objectives it wants to fulfil but it has independence as to how it goes about that. That firewall is also in place to ensure that it is able to fulfil its mandate in a proper way, which is what it is doing.
I am not aware of the detail of the individual American court case the Deputy referred to but I will get some information in relation to it.
The Deputy always raises matters like this because of his interest in the common good and public interest. I note his decision not to use any posters in the European Parliament elections and I wish him good luck in his efforts in the coming weeks.
