Archive for December 15th, 2011

Although frustration is frequently expressed on here at the national obsession with NAMA developer salaries to the neglect of oversight of NAMA’s asset management role which sees an average of €500m of assets disposed of a month, every month, it remains the case that the public is fascinated by how much developers, who rely on the State (through NAMA), get paid. And if you were to ask the NAMA chairman, Frank Daly how much they get paid, he would presumably tell you “generally between €70-100,00” though in two cases, there are salaries of €200,000; the higher salaries are justified by those developers being responsible for multi-billion euro portfolios. At least this is what Frank told the Oireachtas public accounts committee in October 2011.

But have a look though at the accounts of the Northern Irish residential development and construction company, Monnaboy Limited which were signed off last week and are available here. It’s part of the Derry-based McGinnis group, associated with John McGinnis. The company lost GBP 25m (€30m) last year and GBP 35m the year before and now has a balance sheet with a negative value – assets less liabilities – of GBP 55m . It owed its banks, understood to be Bank of Ireland only, GBP 61m in 2010. It says its loans have now transferred to NAMA. Oh, and the highest paid director received GBP 237,059 (€282,000) in 2010.

Now this is no multi-billion euro company; according to the accounts, its assets are valued at just GBP 20m. And yet a director drew down the equivalent of €282,000 in 2010 – 40% more than NAMA says it will pay at the upper limit for those managing multi-billion portfolios.

NAMA was created in 2009 – December 2009 to be legally exact – though it was in May 2009 when Brendan McDonagh was named the interim managing director of the as-yet unformed Agency. And it spent most of 2010 acquiring loans from the five so-called Participating Institutions – AIB, Anglo, Bank of Ireland, EBS and INBS. So there was a transitionary period in 2010 before NAMA would have acquired these loans from Monnaboy when payments may have been made to this director. But surely NAMA had a protocol in place to prevent large salaries being paid at companies where there was a good possibility of the loans getting into difficulty?

NAMA has been asked to comment on the specifics of this case, and more generally what protocols (if any) it had in place during the transitionary period to cap developer salaries. The period covered by Monnaboy’s accounts is October 2009 to September 2010 so NAMA might say that it wasn’t in legal existence for part of the accounting period. As the young people might say “whatever” – NAMA has ended up with loans today at a company which is GBP 237 059 worse off as a result of the salary paid to a director in 2010. NAMA might say that in 2009/10 the loan was the responsibility of Bank of Ireland, but it is NAMA that has ended up with a company GBP 237,059 worse off, not Bank of Ireland.


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