The rationale for the decision by NAMA to appoint accountancy firm Grant Thornton as receivers to companies controlled by NAMA Top 20 developers, Ray and Danny Grehan, is slowly becoming apparent. Yesterday the Irish Independent claimed that NAMA had tried to install a non-executive chairman to Glenkerrin as a condition for the continued co-operation from the agency. And today the Irish Times reveals the identity of NAMA’s man – Harry Slowey (pictured here). The reporting suggests the Grehans were not happy with the appointment though it seems the matter did not get as far as to be discussed by the Glenkerrin board, Glenkerrin being the flagship company owned by the twoGalway developers.
Harry is a fellow of the Instituteof Chartered Accountants in Ireland. He is currently the chairman of Barnados charity in Ireland. He was a director of Bank of Scotland (Ireland) for 13 years until he stepped down in 2006. He has held “senior positions” in the Guinness Peat group and KPMG. He is currently a director of Dublin-based financial services company, FinanceOne. He is a non-executive director of the Thornsett Group, the Irish owned property development group, which in 2006 had schemes in development valued at €400m inIreland, theUK and Belgium.
The NAMA tactic of forcing developers to employ a NAMA-selected individual slipped below the radar on here. In January 2011, the Irish Times reported that NAMA might seek a role in approving the appointment of staff at developers’ companies, but that seems to be weaker than its present position of apparently forcing the appointment of a specific individual.
Presumably at the root of the NAMA tactic is the desire to ensure that NAMA’s financial interests are protected. In the Grehan case, it seems that in addition to the reported €650m currently owing by the brothers, there was a request for additional funding by the Grehans from NAMA to complete an extension to the Crowne Plaza Hotel in Shoreditch in east London. So NAMA has a very clear interest in ensuring the Grehans delivered on whatever plan was agreed.
NAMA’s reported choice of the role of “non-executive chairman” for their appointment seems puzzling as chairmen are typically removed from all but the most significant decisions of the company. Why didn’t NAMA seek appointment to the Finance Department or an executive directorship? Also puzzling is how NAMA justifies the appointment of any individual unless there has been some competition for the role. And as there was no advertisement for the role on the NAMA website, how can NAMA ensure it has secured the best person for the role?
UPDATE: 29th April, 2011. A NAMA spokesperson has stated that the appointment of Harry Slowey as chairman was in fact agreed by the Glenkerrin group, which is at odds with the reporting in this morning’s Irish Times. It is also worth pointing out that FinanceOne where Harry is presently a director has an existing relationship with NAMA. According to NAMA’s tenders, the agency appointed Finance One (sic) Limited to provide services in connection with the review of developers’ business plans. This is confirmed on the FinanceOne website which says “FinanceOne Ltd has been appointed to a panel for the provision of Advisory Services in connection with the review and evaluation of Borrowers’ Business Plans to the National Asset Management Agency (NAMA).”
An interesting point, NWL, but the deal fell through because of NAMA’s requirement regarding the family home.
@WSTT, Neil Callanan in the Irish Independent two weeks ago wrote “Several sources also said that the family home the developers end up in must be worth less than €700,000, or €500,000 in some cases. The only exception will be in the case of a separation, where a wife will be allowed retain a residence.” So the €450,000 residence requirement has a ring of authenticity to it, but a 3-bed semi presumably in Maynooth? That seems less credible – although there is an ordinary looking semi on DAFT at present asking €450,000 that is a prominent outlier and sub-€300k seems like the going rate in Maynooth.
http://www.independent.ie/business/irish/rivals-fret-as-nama-moves-on-quinlan-2621788.html
@ NWL,
Are the duties/responsibilities of directors in Irish companies enforced? I’m thinking of fraudulent and reckless trading. It seems that many directors of construction companies should be investigated. Equally many bank directors (BOSI included) and directors of other financial services companies could be charged. Perhaps Quinn Insurance directors should be looked at.
Off topic: anyone have a good article on what Liberty Mutual is being offered and what they’re offering? I’ve heard Alan Dukes is expecting to reduce Anglo losses which should infer Quinn Ins is worth something. So is Liberty paying some money or putting in some capital? I wonder if the “State’s Insurance Compensation Fund” comply with EU competition rules. I’ll hold my hand up and admit not really understanding how this fund works. It appears that Quinn Ins will receive money without the owners being diluted. If only the Irish sov. had access to such a fund :(
@Ahura, the Quinn story was really only covered on here from the point of view of the property portfolio on which a reported €600m is owed. I know that many people are eyeing up that portfolio as it consists of what are understood to be valuable performing assets. As regards the insurance deal itself, I have not been following the matter very closely but one of the better pieces I read was by the specialist insurance industry reporter, insurancenewsnet.com
http://insurancenewsnet.com/article.aspx?id=258397&sms_ss=twitter&at_xt=4dba8627a1365967,0
Thanks NWL,
This Sunday Business Post article gives some more detail, though it’s still a little hazy.
One thing that seems certain is Liberty is getting 51% ownership of ‘new’ Quinn Ins for €101million. http://www.sbpost.ie/newsfeatures/sifting-through-the-wreckage-of-quinns-anglo-legacy-56025.html
Now I refer to ‘new’ Quinn purely because the article refers to some money coming from ‘old’ Quinn. And “The old Quinn Insurance company will remain in administration, and it will manage down the legacy claims and the British business. Those legacy claims could take over a decade to run down.”
I don’t have enough detail to say with certainty; but it’s possible that ‘new/old’ could be read as ‘good/bad’. If most of the risk remains at ‘old’ Quinn, Liberty might be getting a very sweet deal. What do the people who pay the €600million insurance levy get? It seems they’re paying 6 times more than Liberty Mutual and get nothing. There’s also the issue of who owns ‘old’ Quinn and what the ownership structure and balance sheet looks like.
I accept this diverts from the property portfolio aspect, but it can’t always be amount the bricks and mortar.
Actually, it’s ironic. Most developers that I’ve spoken with have little or no problem with working with an informed non executive director or chairman. They welcome the skill and expertise.
The brakes slam on and the rubber grips the road when Frank wants into the wife’s knickers.
Maybe Frank doesn’t get it – too much time spent lying in the long grass waiting to catch pig smugglers or chasing widow’s mites in IOM bank accounts. He refuses to differentiate the commercial from the personal and that issue is at the heart of the impasse.
There is no more emotive painting in the Irish psyche than the one painted by Henry Jones Thaddeus showing a tenant farmer standing in the doorway of his home protecting his family from the bailiffs.
But, back to directors; the imposition of the pals of NAMA as directors, while maybe irrelevant to the developer, could be useful if it brings expertise to concluding a project.
The NAMA actions to date (rather than the talk) that I have observed, show that its objective is the expedient disposal of property rather than taking the difficult option of working the asset to obtain the maximum return for the taxpayer. You only need a receiver in order to dispose. But therein also lies a risk. If the maximum return is not obtained, both NAMA and the receiver leave themselves open to be sued. And that will be make for some very interesting reading when it happens.
Will it be the stake that NAMA impales itself on? London should be easy, but NAMA has already made some bad disposal decisions. The decision that it makes in relation to the Grehan hotel will be interesting. Will it complete it to get the best return, or just dispose of it at whatever price the “masonic friends” will pay?
Whatever…. IMO, it gets a 3/10 for its performance in London to date.
The real losses and recriminations will come with the Irish assets where the locals can relate more to the prices and rate the disposal performance in a more transparent forum.
NAMA needs a few commercially minded directors imposed to itself.
@NWL, €450,000 was the figure given to me by both parties.
Given Grant Thornton’s role as both receiver/administrator for Quinn and the Grehan companies (prospective) – how does one ensure that the best minds are put to work on the reorganisations? The 2 named receivers looked pretty tired on RTE. Is there only so much receiving a company can do before performance drops off due to capacity issues?
@Barry, I am assuming that the named receivers at Grant Thornton are being backed by an army of support staff. As far as I can see Simon Coyle of Mazaars, Kieran Wallace of KPMG, Declan Taite of FGS, Tom Kavanagh of Kavanagh Fennell, the other Martin Ferris, Billy O’Riordain at PwC, David Hughes at Ernst and Young, Aiden Murphy at Horwath Bastow Charleton and James Luby from McStay Luby seem to do 99% of property company receiverships in this country.