The recent return to the family firm, by NAMA asset manager Kevin Nowlan has raised concerns that the former NAMA insider may now be in a position to exploit his detailed knowledge acquired in the bowels of NAMA. Kevin has returned to WK Nowlan and Associates where his father, Bill Nowlan remains active. The company is understood to be growing it asset management and advisory business and the concern is that knowledge acquired by Nowlan junior at NAMA might be used in a manner that gives WK Nowlan or its clients an unfair advantage in dealings with NAMA or with NAMA developers.
One specific concern is WK Nowlan’s work in valuing Treasury Holdings UK portfolio of property and there now appears to be a concern that Nowlan junior is in a position back in the private sector surroundings of the family business to use both NAMA insider information and WK Nowlan insider-information on Treasury’s properties, to secure an unfair trading advantage. No evidence has been produced to elevate that general concern.
This week in the Dail, the Fine Gael backbench deputy for Mayo, Michelle Mulherrin asked the Minister for Finance Michael Noonan a series of questions about Nowlan junior and the family business. Minister Noonan refused to confirm or deny if Nowlan junior had recently left NAMA to return to the family business, but thankfully, the Irish Times did confirm exactly that recently. We then had Deputy Mulherrin asking about the work undertaken by WK Nowlan with valuing Treasury’s UK portfolio, and herein lies a problem – NAMA engaged Deloitte to examine Treasury’s business plan but Deloitte seemingly subcontracted some work to WK Nowlan, and NAMA says that this subcontracting relationship between Deloitte and WK Nowlan has practically nothing to do with it. Though to anyone with half a brain, it should indeed be something of concern that the Agency potentially lost control over information and conflicts of interest in subcontractor relationships.
Deputy Mullherrin also asks if there is presently a conflict of interest between Nowlan junior’s former role in NAMA and the work currently undertaken by WK Nowlan on Treasury’s portfolio. This gets a little confused because at this stage, you would expect WK Nowlan’s work on Treasury’s portfolio to be at an end, but there is plainly the potential for WK Nowlan to have an unfair advantage in any dealings or consultancy with Treasury property. WK Nowlan can be assured that its dealings with NAMA property or property associated with debtors of NAMA, will be scrutinised very closely.
Deputy Michelle Mulherin: if a person (details supplied) has left the National Assets Management Agency to take up employment with their previous family business; and if he will make a statement on the matter.
Minister for Finance, Michael Noonan: The National Treasury
Management Agency (NTMA), which assigns staff to NAMA, does not comment on individual employees.
Deputy Michelle Mulherin: if a company (details supplied) has won the contract to value Treasury Holdings UK and Irish assets on behalf of the National Assets Management Agency; if so, the value and the duration of the contract; and if he will make a statement on the matter.
Minister for Finance, Michael Noonan: I am advised by NAMA that there is not, nor has there been any such contract between NAMA and the firm concerned. NAMA advises that the Deputy is most likely referring to the Independent Business Review (IBR) that was carried out in respect of all debtor business plans from 2010. NAMA advises that Deloitte was one of a number of firms appointed, following a competitive public procurement tender process, to its IBR panel and that in June 2010 Deloitte was selected from this panel to independently review the Treasury Holdings business plan. NAMA advises that Deloitte completed this work in October 2010. NAMA advises that, as with any other IBR firm, it was a matter for Deloitte to determine where they sourced the property expertise required to complete the assignment. Typically, the input required from property specialists in IBR assignments was to comment on the debtor’s asset strategies as submitted in the draft business plan and to put forward their own expert views on asset strategy and the optimal timing of any proposed sales. NAMA is satisfied that Deloitte had sufficient property expertise available to them to complete this assignment in Ireland and overseas and understands that they engaged separate property advisors for each country. Any property expertise employed by Deloitte involved a contractual arrangement between them and the two separate property advisory firms concerned and NAMA was not a party to such contracts. The fee payable by Deloitte to secure such expertise was a matter between them and the firms concerned.
Deputy Michelle Mulherin: his views on whether a conflict of interest exists when a person (details supplied) joined the National Assets Management Agency as a portfolio manager in March 2010 has now left NAMA to resume work with their family firm which has won a lucrative contract to value Treasury Holdings UK and Irish assets on behalf of NAMA; and if he will make a statement on the matter.
Minister for Finance, Michael Noonan: NAMA advises me that, given its remit under the NAMA Act, it must recruit staff with the requisite experience and expertise and that it would not therefore be possible to recruit only officers who have not worked with firms on NAMA panels. The key issue, however, is that NAMA takes steps to ensure conflicts of interest do not occur. Under Section 42 of the NAMA Act, before he or she is assigned to NAMA, each officer is required to provide a statement of his or her interests, assets and liabilities to the Chief Executive Officer of NAMA and the Chief Executive of NTMA. Furthermore, a key item for any NAMA evaluation group for procurement of services is a declaration by each member that they have no conflict of interest. NAMA advises me that this enables the Agency to ensure that potential conflicts of interest in the management of the loan portfolios are managed effectively; and that staff do not participate in decisions which may involve the allocation of work to companies for which they worked previously.
I am satisfied that NAMA have procedures in place to avoid conflicts of interest.