I am advised by NAMA that the valuation of loans acquired from Participating Institutions was based on an extensive due diligence process carried out by NAMA on the security held for the loans and the assets securing them. Legal due diligence reports submitted by the participating institutions were reviewed by NAMA's external legal panel with a view to highlighting any issues which would give rise to legal difficulties for NAMA in managing the loans or in engaging in enforcement actions in respect of them. Arising from these reviews, questions were raised about the enforceability of security in certain cases and as a result, it was necessary to impose appropriate legal discounts. To account for these and to account also for financial obligations identified during the course of legal review, downward adjustments aggregating to €477m were made to the acquisition value paid by NAMA on these loans. As a direct consequence, the consideration paid to the participating institutions was duly discounted to take account of poor documentation.
The question of taking action against auditors of institutions for the poor standard of documentation at those institutions is a matter for the institutions themselves.
