“BB [Barclay Brothers] have now been told that the bank has chosen a path to work consensually with you rather than to deal with them, I understand they are not happy.” and “Please keep that confidential I cant have board positions like this leaking out” Two text messages reportedly sent by the chief executive of IBRC, Mike Aynsley to developer Paddy McKillen in January 2012
If you don’t have the chance to experience at the High Court this morning the spectacle of two state-owned agencies, NAMA and the Information Commissioner, battling over the issue of transparency at NAMA, then you can always ponder the contradiction in having two state-owned agencies, NAMA and IBRC in competition with each other, and the delicious paradoxes that this throws up from time to time.
Take the developer Paddy McKillen who largely escaped NAMA’s clutches after a Supreme Court ruling in 2011. Paddy is one of Anglo’s – or IBRC as it is known these days – largest scale borrowers. Paddy is also suing a raft of people in London’s High Court, and NAMA is one of the parties being sued after NAMA decided to sell loans in a company connected to Paddy, to Paddy’s rivals, the Barclay brothers. If Paddy wins his case against NAMA in London, then NAMA will face substantial legal costs and potentially substantial damages. It came as a surprise therefore to find another state agency, Anglo offering support to Paddy – in the ongoing court case in London it was revealed that Anglo’s CEO, Mike Aynsley texted Paddy in January 2012 both assuring Paddy that Anglo would not undermine Paddy by siding with the Barclay brothers and, in an unsettling display of closeness between Mike and Paddy, asking that the communication be kept confidential as Mike “can’t have board positions like this leaking out”.
If NAMA and IBRC were to be merged, then presumably NAMA would consider calling in Paddy’s outstanding loans and/or selling those loans to the Barclays, so as to undermine Paddy in his legal proceedings. Yet because NAMA and IBRC are not presently merged, despite having an almost identical remit in the run-off of legacy lending, we have a situation where NAMA is being sued by Paddy on one hand, and is being offered support by IBRC on the other.
On Tuesday, Minister for Finance Michael Noonan responded to a question from the Sinn Fein leader Gerry Adams on the potential for dysfunctional competition between NAMA and IBRC, and the Minister said
“IBRC is a separately regulated State entity with a specific mandate to ensure the maximum return to the Irish taxpayer in the management of its business. The bank’s decisions are based on its total client exposure and the optimum re-structuring of its loans to secure maximum recovery for the State. IBRC therefore does not and should not, in normal course business, make decisions based on independent courses of action chosen by NAMA.”
The Minister distanced himself from the actions of IBRC and claimed those actions had the support of the IBRC board.
The Sinn Fein leader asked Minister Noonan to “confirm the reason NAMA and IBRC are adopting competing positions when both institutions are in wind down and the sole objective of both institutions is to sell assets and minimise losses for the taxpayer”
Minister Noonan didn’t have any answer.
There is a blogpost on here on the potential to merge NAMA with IBRC.