RTE transmitted a capable current affairs programme last night which examined the wealth and lifestyles of several top NAMA developers who owe the agency an average €1-2bn. As a close follower of NAMA, I must say that it was the first Prime Time programme on NAMA where I haven’t found myself shouting at the TV screen at the mistakes voiced by presenters, journalists, junior ministers and commentators, and all in all it was an interesting insight into some of the residual private and commercial wealth enjoyed by NAMA developers such as Bernard McNamara, Michael O’Flynn, Gerry Gannon, Seamus Ross, Joe O’Reilly, Sean Mulryan, Derek Quinlan, Paddy Kelly & family and the Treasury duo – Messrs Ronan and Barrett. I couldn’t dispute any of the details.
The programme gave a fascinating insight into the wealth (particularly property wealth) enjoyed by the developers and notably their wives – no interior shots of the houses but the opulence of the properties wasn’t in doubt and RTE made full use of camera masts to provide elevated images of the properties. Transport was also on show – be it Gerry Gannon’s 4-year old silver Range Rover (reg 06-D-7884, shouldn’t RTE be pixelating developer number plates?) and his wife’s red 2008 SL Mercedes (UPDATE: 26th December, 2010 now apparently for sale), Bernard McNamara’s newish S-class Mercedes or Johnny Ronan’s old Maybach (worth about GBP 100k in the UK today where there is a second hand market). And speaking of second-hand values, Michael O’Flynn’s AgustaWestland 8-seater helicopter was valued at €3.5m+ by RTE.
All in all though,I found it difficult to understand the point of the investigation. That developers still have access to immense wealth? That developers made substantial transfers to spouses? That developers still collect impressive rents on their properties? That developers employed offshore companies to manage risk in their businesses? All with an over-arching implication that developers are stiffing NAMA (and by extension the nation). None of this was really new and we didn’t need what looked like expensive covert filming or vaguely threatening background music , not to mention what is now the usual imagery of wealth, the upturned Bollinger champagne bottles, the crystal cut glass champagne flutes, cognac glasses and a bunch of well-fed developers playing Monopoly on the top floor of an unfinished office block – no we didn’t need any of this to confirm what has been reported elsewhere in detail. It is just about noteworthy that 12 months after NAMA finally came into being, developers whose debts are now owned by the State, still enjoy fantastic wealth whilst the citizens have contributed billions to recapitalizing the banks after losses on these loans.
So you would have expected the programme to have given NAMA a hard time, particularly since the NAMA chairman Frank Daly did provide an interview. But for whatever reason the questioning was pretty light, for example
(1) Yes NAMA may have initiated the voidance of the transfer of €130m of property (are those peak values or today’s by the way and are those properties subject to substantial non-NAMA mortgages and liens?) by three (yes, just three!) developers out of 850 developers whose loans have been absorbed. The value of this property is not to be used to set off against the debt now due though, it is to be used for future development. And by the way the €130m of property hasn’t all been transferred back yet – how long does it take to execute a conveyance? Seven days? Prime Time say there was “no evidence” of property being transferred to avoid creditors or NAMA.
(2) NAMA has taken action against one developer (Paddy Shovlin’s partnership with the Fitzpatrick brothers). One action?
(3) On the other hand NAMA is reported to have taken over all the rent rolls it can. The programme made much of the fact that NAMA occupies Treasury Buildings in the centre of Dublin and pays rent to its landlord (Treasury Holdings/Paddy McKillen) but is NAMA not using that rent to offset debts owed to it by the developers. Ditto with the Office for Public Works buildings including those owned by Liam Carroll and Bernard McNamara. The programme’s implication was that developers were still pocketing substantial rent whilst debts to NAMA went unpaid. But is that really the case?
(4) And Prime Time could certainly have dug on the question of business plans. My information is that none have been signed by NAMA *and* the developer. NAMA say that 30 have been “approved”. What does that mean?
Possibly the most newsworthy segment of the programme and it was over in a flash was a comment by Simon Kelly, son of Paddy Kelly who said (35:30 in to the recording)
“I suppose I personally owe the banks about €200m on all the properties that have gone into NAMA. The Kellys will be, you know, €900m so like again under half of that portfolio, just under half of that portfolio will be on our combined shoulders. It’s a vast amount of money. We signed for the loans personally and that’s meant now our day of reckoning has come.”
With NAMA taking over loans at an average 58% haircut, the clear implication is that the developers feel they are in debt to NAMA for what NAMA paid for the loans and no more. Perhaps that was the real revelation from last night’s programme but alas it went unexamined.
NAMA Wine Lake 
For people on this blog who have an intense interest in Nama a lot of the stuff was (as you suggest) old hat.
But for people who don’t have the time or the inclination to read big pieces in the SBP or whatever it will have laid out some of the issues.
And of course a picture paints a thousand words – the image of Gerry Gannon filling the boot of the Range Rover with goodies from BT will live long in the memory.
I’m not sure that RTE have any obligation to redact his number plate – its attached to his car which he drives in public and is therefore not private or a secret. If he was a Guard or he did a senstive job there would be a security issue. But he’s just a plump builder so there isn’t.
Further to my point about laying it out for a mass audience:
At its peak, almost 900,000 people (874,000) were watching the programme – and the average figure for the hour was 803,000
Hi JP, yes I’d agree with you that like any good current affairs programme it needed to take account of its audience. I think Rita O’Reilly deserves huge credit for producing a capable and fascinating programme – as you say the image of Gerry Gannon (reputedly owing NAMA €1-2bn) and wife stuffing the back of the Range Rover with Brown Thomas shopping bags will linger. However the programme left most people thinking that developers who owe NAMA an huge sums are still living the high life (true for many, not for all) and have transferred significant assets to spouses with the implication that NAMA cannot get at them to repay debts (the NAMA Act has strong though untested provisions in this area and transactions undertaken to avoid creditors can be voided though the programme was careful not to level this allegation directly) and that developers still collect significant rent rolls despite having debts with NAMA (NAMA says that it now collects the rent and uses it to manage/offset developer loans). The programme might have used a small part of the 55 minutes alloted to it to progress these issues.
And if that average figure of 803k for the audience is correct, that is a blinding achievement (if I understand the ratings correctly the Top 3 programmes in 2009 were The Late Late Toy Show with an audience of 1.115m, The Rose of Tralee with an audience of 0.701m and The (normal) Late Late Show which averaged 0.675m)
“With NAMA taking over loans at an average 58% haircut, the clear implication is that the developers feel they are in debt to NAMA for what NAMA paid for the loans and no more. Perhaps that was the real revelation from last night’s programme but alas it went unexamined.”
Not sure if I posted this before but I wrote to the EU a few months ago about the importance of Nama keeping its eye on the ball as regards seeking maximum feasible repayments from borrowers. It would help greatly if Nama would publish proforma accounts based on the nominal value of loans. These would give a much fuller picture of its real performance. More at http://www.planware.org/briansblog/2010/11/nama-and-creative-accounting.html
I agree with you Brian, that the real test of NAMA is how much of the outstanding debt they can recover, however this is not NAMA’s objective according to 3 sources that have had discussions with officers who said the primary objective was recovery of the NAMA value and the secondary objective was any surplus on that. And because they are under-resourced and under-incentivised there is little hope of objective 1 and much less of objective 2
BR
Your sources are correct. Section 10 of the Nama Act deals with the purpose of Nama and refers back to Section 2 which states that the Act’s purposes include protection of the taxpayer and contributing to social and economic development. Frank has stated (CPA’s Annual Conference on 4th June 2010) that “NAMA’s core commercial objective will be to recover for the taxpayer whatever it has paid for the loans in addition to whatever it has invested to enhance property assets underlying those loans. This objective has not been determined by NAMA; it has, in fact, been set for us by the legislature under Section 10 of the NAMA Act”.
I propose that for the avoidance of doubt and to make matters crystal clear, the Government should be requested to amend the Nama legislation to indicate that maximising the recovery of original debts, over and above the actual cost of acquiring loans and recovering expenses, is an explicit objective under Section 10 Subsection (2) (c).
Ah, NWL, slight correction. It’s Michael O’Flynn with the helicopter – not John O’Flynn.
Also, I think RTE edited Simon Kelly’s contribution and in doing so caused some confusion. The Kellys have often stated that the total liability of partnership portfolios in which they have an involvement amount to two billion euro. Hence when Simon makes reference as follows, I believe that he is making referece to the overall liability of those partnerships – not to their (the Kelly’s NAMA) haircut.
“The Kellys will be, you know, €900m so like again under half of that portfolio, just under half of that portfolio will be on our combined shoulders.”
Hi WSTT, thanks for pointing that out and that is a plausible explanation (though without that information on partnership finances the implication was that NAMA was focussing almost, not 100% perhaps but almost, exclusively on the sum paid by NAMA for the debt which is on average 42c in the euro. And the second reference to Mr O’Flynn now has the correct first name, thanks!
I think the Simon Kelly comment was in relation to loans oowed to Irish banks, as opposed to total loans but I might be wrong.
There were a number of minor things wrong – wrong landlords, wrong banks etc – but overall good piece.
Having watched Prime Time it is ironic that Jayfield Investments Limited (owner of the Treasury building that houses both the NTMA and NAMA, which in turn is owned by Paddy and J. Ronan) has not submitted it’s accounts to CRO (30/09/10 being it’s last annual return date). One can only wonder why ?
@Neil.
The Kellys were very loyal to Anglo and rarely borrowed from other banks. I would say that 80% of their borrowings were from NAMA banks. There was very little from non NAMA banks.
@ Neil, P.S.
The comment that “just under half of that portfolio will be on our combined shoulders.” would not fit with any reference to a distinction between NAMA banks and non Irish banks – because all of that is on their combined shoulders. Logic points to it more likely being a reference to their responsibility in relation to a percentage of an overall portfolio.
If they took ALL the money from the developers and spread it around to every taxpayer in the land, within 10 years (assuming they all survived that long) it would be back in the same hands. It’s all derives from the inherit nature of the scorpion that has survived millennia to remain in our genes.
(For the few who have never heard the tale: The Scorpion and the Frog is a fable. The story is about a scorpion asking a frog to carry him across a river. The frog is afraid of being stung, but the scorpion reassures him that if it stung, the frog would sink and the scorpion would drown as well. The frog then agrees; nevertheless, in mid-river, the scorpion stings him, dooming them both. When asked why, the scorpion explains, “I’m a scorpion; it’s my nature.”)
It is often quoted to illustrate the purportedly insuppressible nature of one’s self at its base level.
People won’t change their nature. To expect the developers to change is naive. They are programmed to be the way they are. They can’t help it.
Nice thing about people is their predictability – the developers are closest to the scorpions – doing what they are used to doing, even if it causes them harm. It’s just their nature. Same as “rattle the cage” Frank , the two Brians or the civil servants. They have their programmed nature too. They can’t help it either. We, the frogs, are the ones that suffer from these pre-neanderthal genetic throwbacks.
WSTT,
These developers negotiating with the Brians, the civil servants, the bankers, and NAMA are like wolfs negotiating with sheep about what to have for lunch.
Nobody would lend their own money to a speculator at 3-4%. These developers were greatly skilled at persuading idiot Irish bankers to lend them vast sums of money at ridiculously low interest rates. That was their ‘key’ skill, not creating wealth. They’ll dance rings around NAMA and its consultants.
It’s very easy for it to end up back in the same hands when they rig the game!
Burning obscene amounts of taxpayer money on the never-ending funeral pyre that is the Irish banks in order to preserve the nest of scorpions will do that.
Refusing to exterminate them (through the proper legal channels) will do that.
Leaving dead carcasses around to be picked clean by them will do that.
Some of us prefer to leave the vermin outside the door.
@Brian
I know that you are like a dog with a bone on this one, but NAMA will never publish the figures that you are looking for because those headline levels will never be achieved again in our lifetimes. It would require another huge bull market in property and lending at levels that would make the FED blush to achieve it. It would also show NAMA in a negative light – that they could not recoup par value for the loans.
No, that’s not the yardstick that will be used to measure NAMA’s performance. It will be a question of “Can we make a profit on the cost of the loans to NAMA?” The rest will be lost in the mists of time. Cries of “Nothing to do with us, ask the originating banks.” – not many of whom will be around to ask. It would be nice to know though.
@ Frank,
The banks were easy targets and also very willing lenders. The bank executives were paid HUGE bonuses to make the loan. Hence the massive competition between them to get out as much money as possible. The bonuses were not linked to performance – just to making the loan. This was a crucial fault in the banks’ “business plans”. That’s if they ever had any real plans other than to lend.
The only money available at present is at 15%. It is available from vulture capitalists. That’s the main reason NAMA will fail. There is no funding available at a cost that will allow the market to regain a level where NAMA can make a profit.
Regarding the Kelly’s commitments, according to Paddy Kelly as reported in today’s Irish Times, it seems that two-thirds of their debt is in NAMA banks.
http://www.irishtimes.com/newspaper/ireland/2010/1222/1224286077033.html
Strange, but the whole argument and the tone of several sources and blogs, has ventured away from business plans and into the realms of personalities, emotions, nature, even fate.
In 2011 Irelands economy is first and foremost about poisonous creatures fighting for “their” lives.
Comparing the situation in Ireland to that abroad, many are struck with the emphasis and significance of individuals as oppose to groups or committees, be those individuals career family dynasty politicians, bankers or developers.
A few months ago it sounded like cynical psychobabble, but is it not true that Ireland is screwed, now and in the future, as long as ‘individuals’ and their emotions/motives have so much say over the big picture?
The new bank law is a good example.
The practically secret negotiations between NAMA and developers are a good example.
When the ‘wealth’ of 4 million individuals is at a hostile bargaining table, with only a handful of power brokers, business plans matter less and personality traits matter more.
Sad but true.
For Ireland right now very sad and very dangerous.
It’s time to take the babble out of psycho and take the unequivocal out of mathematics.
In 2011 Irelands economy is first and foremost about poisonous creatures fighting for “their” lives.
Watch out.
@wstt
“The bank executives were paid HUGE bonuses to make the loan. Hence the massive competition between them to get out as much money as possible. The bonuses were not linked to performance – just to making the loan.”
The above has been repeated so often that it is now conventional wisdom. But is it true ? Has it been verified by any document or by reliable oral testimony in the public domain ?
I have an open mind as to the answer. Help me out.
Fergus,
I don’t know if they were paid HUGE bonuses but I’m sure there were other perks. I can’t remember the exact numbers, perhaps someone else can help, but the loan provided to a senior Anglo banker to buy his home in Brookline, Mass, was written down by a couple of million in the 2008 annual report. The original loan amount was more than the purchase price. Now I don’t know the exact details of the transaction but I know Brookline, Mass, has not sen any house price depreciation.
In addition, a lot of the bankers were close relatives of politicians, developers, and auctioneers.
A good analogy would be Sicily. Imagine if Sicily became a country, joined the Euro, and gained access to the ECB. Imagine what they could pull off before the Germans woke up. Do I need to say any more?
My question is not directed at the payment of bonuses, but at the basis on which bonuses were paid i.e. was it, as claimed by who_ shot_the_tiger, on the basis of the volume of lending alone ?
(See also my response to his/her answer below)
Hi Fergus,
I can confirm that in at least 3 of the banks property lending teams bonuses were correlated to lending targets (i.e. the more you lent the bigger your bonus). In the case of AIB this was exacerbated by the fact that branches had their own internal targets without reference to a regional strategy. So you would have 2 branches in adjacent parishes lending to the same individual without recourse to eachother. It was all driven by managers seeking bonuses. Sorry WSTT if that was what you would answer.
Hi NWL,
just read this…
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1765&format=HTML&aged=0&language=EN&guiLanguage=en
as redirected from here…
http://www.independent.ie/opinion/columnists/david-mcwilliams/david-mcwilliams-lastgasp-bluff-is-now-a-debt-sentence-for-us-all-2470049.html
Worryingly this is the first I have heard of “derivatives, clearing transactions and transactional arrangements” being specifically mentioned in an official communication.
Q.
do you have a total sums of what each ‘bank’ has received to date i.e. a spreadsheet with the famous five across the top and in the vertical column…
Recapitalisations (with dates),
NAMA bonds (Debit re-fault flip-flops) as payment for loans (existing and future tranches) with dates,
Liquidity provided by CBoI (with dates),
Have I missed anything obvious?
and as an aside…
Existing subordinated debt write downs,
Shareholder losses (market cap) since the ‘top’ of the market from a equity perspective.
I.E. what do we ‘know’ they have cost us to end of 2010 before we go down any derivatives lane-way.
p.s. I expect more depressing press releases between now and year end.
According to the EU document: “Anglo Irish Bank will furthermore receive a guarantee covering certain off-balance sheet liabilities (derivatives, clearing transactions and transactional arrangements) that will ensure that Anglo Irish Bank can continue its daily activities as a going concern.”
A going concern!!! More like a gone concern. What will Anger be left with after its deposits are transferred to another bank and loans to Nama?
Hi JR, thanks for that and there is certainly an emerging story with respect to derivative exposures – emerging on the official government radar, Constantin Gurdgiev has been writing about these exposures for ages and thepropertypin has also been speculating about the level of losses contained therein and examining the issues for some time (links below).
In answer to your question, I’m not sure what you’re getting at. There is a post here which examines what has been “shovelled” into the banks so far and the future forecast (based on the government’s 30th September 2010 announcement and the Fin Reg’s 28th Nov PLAR announcement)
https://namawinelake.wordpress.com/2010/12/15/government-starts-to-shovel-bailout-funds-into-banks/
Remember that much of the recapitalisation so far has consisted of Brian Lenihan running out to the photocopier outside his office, grabbing a blank sheet of A4 from the bottom tray and writing “I owe you [ ] billion, signed Brian” – otherwise known as promissory notes. Of the near €50bn committed to the end of Sept 2010, only c€12bn was in cash. However the real wonga is now being to flow with draw downs from the NPRF and NTMA and possibly the €6bn which was promised by the IMF last week for payment now. There are a few entries on promissory notes eg
https://namawinelake.wordpress.com/2010/11/11/are-promissory-notes-constitutional/
https://namawinelake.wordpress.com/2010/11/07/promissory-notes-and-the-bank-bailout-a-cockamamie-plan-that-doesn%e2%80%99t-even-add-up/
The full exposure is near €500bn (the guarantee) and that excludes derivatives. The numbers are frightening. It is to be hoped that two years into the crisis with a new governor of the Central Bank, a new financial regulator, lots more regulatory staff, public interest directors at the banks etc that we have a handle on derivative exposures. I don’t believe we do and the reason I think this is so, is because the IMF in their Staff Report last week called for a top-down and bottom-up assessment of non-NAMA loan losses and off-balance sheet (derivatives in my book but there may be others) exposures in Q1, 2011. Maybe the IMF were just being thorough but I have a bad feeling about derivatives which I hope is wrong.
Constantin Gurdgiev and derivatives – http://trueeconomics.blogspot.com/2010/12/economics-211210-derivatives-hole.html (this is recent, he has written on this months back – do a search)
The Property Pin – http://www.thepropertypin.com/viewtopic.php?f=19&t=34617&p=456614&hilit=derivatives#p456614 (there are a number of threads which deal with derivative issues, particularly exposures)
@brian
What will Anger be left with after its deposits are transferred to another bank and loans to Nama?
…
happy directors
Hi Frank,
I know that there were huge bonuses paid from alcohol oiled chats that I had with lending executives within Anglo. They told me that they received a percentage of the commitment fee that was charged on the loan. So, large loan = large commitment fee = large bonus. I will talk with some ex-Anglo executives, get the full story and will report back. :-)
Apologies, Fergus. My last post should have been addressed to you.
That’s interesting, but I confess that nothing about Anglo will surprise me at this point.
I was really thinking about the situation in, especially, AIB. Was its their lending staff and higher management incentivised on the basis of lending volume alone ?
Anglo was basically run by people who had no experience, training or understanding of the risks involved in the business of banking, and no corporate culture or memory of near-death events for the institution. AIB did not have that excuse.
When I worked as a banker from 1972 to 1988 (not for any of the NAMA banks), it was a cliché that pressure to lend money carried with it the risk of a fall in credit standards. This must have gone out the window while I was doing other things in the 20 years following.
sf ca writer wrote:
“Strange, but the whole argument and the tone of several sources and blogs, has ventured away from business plans and into the realms of personalities, emotions, nature, even fate.”
We Irish have a genetic trait, which is to attack the individual rather than solve the problem. Our current ad hominem obsession is akin to the dog who is so fixated on attacking the car wheel that it is oblivious that the juggernaut, of which the wheel is only a part, is about to flatten them.
We need to address the main problems which are the supply of credit from our banks leading to liquidity, a rebased market and the creation of jobs. Until we stop navel gazing and the blame game and address the real issues we will never have a solution.
But it’s an impotent wish… it’s just not in our nature.
I can give you all some clarity here. The figure that I refer to as €200m in my interview for the show is the total amount of debt that I have going into Nama, not the written down haircut value. As a Nama Client, I am not informed of this figure and I can only speculate as to what it is.
vis a vis the overall show and tone. I think that it was factually accurate and I also think that the tone reflects the feeling that people have around the developers. We are not all like Gerry Gannon transferring properties to anybody with a pulse. I did not transfer any property to my spouse as protection. Much like society in general, developers are NOT all the same and we do not think a group ganging up on the Irish people.
I expect that we will now all be tarred with the same brush as Gannon which is a pity.
To dispel any doubts that people on this forum have. Nama is a liquidation process for developers and it is not a bailout. No plans have been signed yet according to NWL, and i expect that this is because the offers from Nama an not real offers in a commercial sense. The vibe seems to be
“here is a gun and a bottle of scotch, you know what to do”
Simon
Hi Simon,
could you explain what you meant when you said “I suppose I personally owe the banks about €200m on all the properties that have gone into NAMA. The Kellys will be, you know, €900m so like again under half of that portfolio, just under half of that portfolio will be on our combined shoulders. It’s a vast amount of money. We signed for the loans personally and that’s meant now our day of reckoning has come” [35:30 into the Prime Time Investigates prog]
There are a few interpretations, for example, around your NAMA v non-NAMA and family v consortium exposures. I took it to mean that you regarded your liability to NAMA at just under half €900m and I further speculated this was because NAMA is only chasing you for what NAMA paid for the loan (varies between loans but on average is 42c in the euro) – if you don’t know what NAMA paid then my interpretation would be wrong. But can you explain what you did mean?
HI,
Our portfolio in Nama totals almost €2b. This figure represents the total gross debt on all the projects that we are involved in, whether our stake is 5% or 100%. I refer to this generally as the portfolio. This was 75% + Anglo.
Of this total figure, we as the Kellys are liable for circa €900m of this debt, and my personal slice of that is under €200m.
I do not know what price Nama paid for this debt but I expect that it was about 35-40% and this is where I currently valued it.
I think that they will make a profit from here if they bought it at this level, because a significant portion of this portfolio is hotel and investment property which will recover over time assuming yields come in a little.
The income on the properties gives Nama a good return in the meantime while they wait for the market.
Simon
Hi Simon, thanks for clearing that up (and WSTT was right again with his interpretation!)
Can I ask you an additional question about a subject raised in the programme? The tail-end of the programme dealt with some high profile buildings eg Treasury Buildings where NAMA/NTMA reside which is owned by a company controlled by at least one NAMA developer (Paddy McKillen of course is still outside NAMA pending the appeal). The implication from the programme was that NAMA developers were still collecting substantial rents whilst owing NAMA billions. But NAMA has said that they will go after rent rolls and presumably other income streams.
In your experience of your own loans, has NAMA taken over the rent rolls or other income streams (not sure what other income streams you have but I heard a rumour (unsubstantiated) that NAMA was now taking the daily cash on car parks, for example).
“I expect that we will now all be tarred with the same brush as Gannon which is a pity.”
Hey Simon – how did Daddy Paddy keep the pad the last time he went bust?
Who’s name is your own house in?
Keep chewing the gum kid!
I should be saving all this for a new book.
When you signed a loan pre nama, you give the bank a charge over all of the rental income. Nama is a continuation of this because Nama takes over the existing banking arrangements. Therefore Nama is collecting the rents and Prime Time portrayed this badly in my view. Treasury are clearly not walking around with €50m of OPW money in their pockets everyday.
If a developer had a large surplus over interest cost (and not many had), Nama would now be taking this as capital repayments. The banks would have had the same right and may exercised a LTV breach clause in their loans as an excuse to increase interest rates and collection capital on this loans.
In effect, Nama will be sweeping up all of the available cash. This funds their day to day spending and also provides them with cash to lend back to developers to complete projects etc.
The daily cash on a car park sound OTT, but they certainly be collecting it monthly.
If money was not being passed to Nama, a receiver would quickly be appointed.
Well done on the Blog, by the way. you are very accurate and we all wonder who you are?
Many thanks Simon, you seem to confirm NAMA’s official position.
I’m going to have to admit that I haven’t read your book “Breakfast with Anglo” but hope to over the Christmas break – the Independent seemed very impressed with it. http://www.independent.ie/entertainment/books/reivew-breakfast-with-anglo-by-simon-kelly-2415721.html
Well, Simon confirms what I told you so! :-)
Our national TV station is controlled by the government and it shows.
The truth about this program is that it was “sensational” journalism, directed by the producers for a gullible audience to demonize the developers. An easy target.
If they are going to do it, they should report accurately. And the section dealing with the developers’ rental income and NAMA was grossly misreported and inaccurate. It is exactly as Simon outlines – he even understates it, because not only are NAMA taking charge of the developers’ bank accounts, they are also trying to “garnishee” any other income and capital from third party sources unconnected with NAMA loans. Far from buying new Bentleys etc., the developers have to consider whether they leave for a new future elsewhere or stay in a NAMA imposed lifestyle (most developers would consider it penury).
Many developers are now seriously considering the option of the 12 month UK bankruptcy as preferable to the deal being offered by NAMA. Far better to have a 12 month holiday in the Cotswolds and return as a “poacher” (buyer of the NAMA assets at the rebased levels) rather than penal servitude for the next 10 years with an uncertain outcome at the tail end.
The main reason being cited for staying is “pride”… the desire to complete the projects they have started and recoup as much as possible for the taxpayer (there are actually some very moral developers). The deals being offered by NAMA are not conducive to that desire though and most developers WILL reject them.
As Simon probably can confirm this discussion is taking place amongst developers as we blog. And as I have written, they are not coming down on the “be friends with Frank” side. The UK solution is very appealing.
BTW, NAMA should forget their 4 page “confidentiality agreement” that makes up the first half of their offered business plan. It ‘s risible and just proves that the whole thing was conceived in the UK and given birth to by lawyers and civil servants that don’t live in the real world. We live in Ireland and there’s no such thing as “confidentiality”……. Get a grip!
@Michael Wash,
In relation to the money ending up with the same people – it’s a mixture of motivation, experience and entrepreneurial flair. (I don’t expect you to agree with any of that – but we are all entitled to our opinions).
I would refer you to Tony Ryan who went belly up when GPA had to withdraw their IPO. He subsequently built Ryanair with the help of Michael O’Leary into the world’s largest airline. Like I said previously, it all comes down to the nature of the beast.
BTW, ad hominem attacks are an impotent exercise. They achieve nothing.
In relation to GPA, having chatted extensively about it with the CFO John Tierney, it took some super-ego, boardroom politics to snatch defeat from the jaws of victory on that one.
As for Ryanair, taking the Southwest Air model and applying it to the cartels in Europe is a credit – but GPA should have been the business Tony Ryan was remembered for.
BTW, I fail to see anything I wrote, in response to you earlier, that could be construed as “ad hominem” – feel free to enlighten me please!
I was referring to the personal attack on Simon Kelly.
Well then, hopefully Simon, when he’s finished Noshing with NAMA, can take the trouble to pop my bubble and enlighten me on which part is factually incorrect!
[…] https://namawinelake.wordpress.com/2010/12/21/prime-time-investigates-nama-developers-but-exactly-wha… […]