You would have thought this would be a quiet week for news reporting at NAMA, but it seems the Irish Independent has discovered a few nuggets which seem to cast NAMA in an uncharacteristically benign light. But stick the nuggets under a microscope and they start to look just a leeettle suspicious.
Yesterday the Independent reported that NAMA had “tipped-off” the Revenue Commissioners (Irish tax authorities) about “possible tax evasion” by “dozens” of the 850-odd developers whose loans NAMA is managing. Dig a little deeper and you will see that NAMA was doing no more than its duty in notifying suspicious transactions or assets to the Revenue; some or indeed many, of these suspicions might previously have been notified to the Revenue by the original banks – NAMA is not saying and the Independent doesn’t include such detail.
Of course, if you were of a cynical persuasion you might think that NAMA was trying to resurrect a weapon in its original arsenal – the sharing of information by the Revenue with NAMA. The EU “decommissioned” that particular weapon because if the Revenue was to share information with NAMA, that would place NAMA in a better position to recover debts than other banks and institutions in the State – credit unions, guaranteed banks like AIB and non-guaranteed banks like Ulster Bank – and the EU was keen to minimise NAMA’s effect on competition in Ireland.
And today, it is reported in the Independent that NAMA “has reversed or is close to overturning” more than €160m of asset transfers by NAMA developers. “Wowaweewa” as Borat would say, very nice! Except in his pre-Christmas (2010, that is, 12 months ago) update NAMA chairman Frank Daly said that “as a result of the Agency’s insistence, a number of borrowers whose loans have been acquired by NAMA have reversed or are in the process of reversing transfers of over €130 million worth of assets which they had previously sought to transfer beyond the reach of NAMA or the relevant Banks. These assets will now be used to support the execution of the agreed business plans.” So in the past 12 months, despite completing the acquisition of billions of euros of loans and examining hundreds of business plans, NAMA has managed to “reverse” or “get close to reversing” a measly additional €30m of asset transfers.
But there’s more: NAMA is reported to have secured €221m (a very precise figure I must say!) of additional security on its loans to developers. This additional security according to the Independent “was largely achieved from the agency’s biggest clients, and involved cases where borrowers were compelled to grant NAMA charges over unencumbered assets in exchange for the agency’s support.”. Again very impressive. But hang on a second – “in exchange for the agency’s support” – is this the support which involves the agency advancing an additional €950m to the developers? So – to get this straight – NAMA may have advanced €950m to developers who offered up €221m of assets as additional security? Surely that’s not right.
And lastly the Independent today reports that “a spokesman for the toxic loans agency confirmed the figures’ accuracy and said the combined €380m [€160 reversal of asset transfers and €221m additional security] benefit to NAMA would cover “most” of NAMA’s €500m running costs over its ten-year lifetime.” Now hang there a second! €500m running costs over its ten-year lifetime? Whatever happened to the €1.6bn operating costs that NAMA referred to in its official business plan in June 2010? Here was what NAMA told us last year about its €216m projected costs in 2011 (that is, the 12 months of 2011).
The implication from today’s reporting is that NAMA’s Herculean efforts will to a large extent offset its cost. Hmmm. By the way the €500m referred to in today’s report is likely to represent the staffing costs at NAMA for its 10 years life (particularly if it doubles in size to a staff of 400, as seems likely), though that’s not stated in the Independent.
And to think that most of us were going to get back to the gym and the spinning classes next week!
NAMA Wine Lake 
@ NWL There was an obligation in the NAMA legislation to pass on details to the Revenue and that information has been supplied from day one. Section 204 of the NAMA Act obliges them to do so and Section 212 of the Act obliges the Revenue to supply tax information to NAMA.
One area of particular interest to the Revenue was loans backed by hidden assets held overseas, for example bonds or other financial assets owned by a developer but held through say a Jersey branch of an Irish bank. The Irish manager giving out the loan would be made aware of those assets by way of a telephone call from his colleague abroad. If he was made officially aware of those assets he would have been obliged to make a Suspicious transaction disclosure to the Revenue. Banks were notorious for not sending in meaty disclosures on their richer Irish customers.
Notes of some of those foreign holdings have turned up in documents and these have been or are being investigated
In many cases due to slovenly legal & tax work, there is a need to stamp documents or pay VAT on property transactions. Without the co-operation of the Revenue substantial additional bills for interest and penalties on top of tax bills would accrue.
@Niall, thanks for that. But I disagree with you.
The European Commission, when granting approval to the NAMA scheme in February 2010 said the following:
“The Irish Tax Authorities commit that NAMA will not use the power to request tax information (as per section 204 (3) of the Act) from the Revenue Commissioners”
https://namawinelake.wordpress.com/2011/01/25/is-nama-breaking-competition-law-in-its-dealings-with-the-revenue-commissioners/
Section 212 does not refer to the Revenue at all
“Provision of tax
information to
NAMA.
212.—(1) In this section “the Capital Gains Tax Acts” and “the
Corporation Tax Acts” have the respective meanings given by
section 1(2) of the Taxes Consolidation Act 1997.
(2) Where shares in a company are acquired by—
(a) NAMA,
(b) a company referred to in section 616(1)(g) of the Taxes
Consolidation Act 1997, or
(c) a NAMA group entity,
and, as a consequence of the acquisition, the provisions of the Capital
Gains Tax Acts, the Corporation Tax Acts or the Stamp Duties Consolidation
Act 1999 as amended or extended impose a charge to tax
or duty on the company by virtue of a clawback of a relief, the person
from whom the shares are acquired shall inform NAMA, the acquiring
company or the NAMA group entity of the charge and the
amount of tax or duty due.”
@ NWL Apologies I had left by the time of the EC ruling. I wasn’t aware of the ruling.
So basically NAMA is complying with the law,hmm great to eh hear that.Playing to the cheap seats as usual,just makes NAMA look small minded,insular,unfocused and easily distracted.They extended BPS loans to REO twice,as the market in London was detoriating into a full on liquidity crisis.The premise was “partners” Russians,Shieks,Aisans, well NAMA where are they,huh,gone hit the road or were you sold a load of BS from Treasuary.
Eagerly awaiting REO report,it will be scandalous, ridiculous ,disastrous if NAMA advanced funds under false pretentious,almost criminal,hope there was no false representation.REO valued BPS at 500mil,they were granted two very expensieve loan extensions to nail down the fictious JV,they are out,what’s the delay … where are ALL those partners gone,and nice work NAMA the market headed south while you were preparing these ridiculous press releases.No way Treasuary got paid fees by Irish taxpayer during this,no way that would be obnoxious,right !
Easier to chase nickels and dimes,issues self congraluations press releases than actually “manage” or achieve something.
The amount owed to the Irish taxpayer on BPS exceeds the assets reversed by NAMA according to its in house newsletter the Indo.
@JW I always get a good laugh when I read the REO/Treasury press releases – they must employ a good fiction writer. They usually involve great flights of fancy -Arab Sheiks and their many wives, turning stud farms into casinos, russian football club owners and mystery Malasian investors. Looks like he/she is now double jobbing for NAMA though they need to get more inventive, revenue is boring but they could develop the trophy wives storyline , Reading about wives cars, jewels and paintings being confiscated may keep the workers/proletariat happy … I wouldn’t count on it !
@NWL
Off topic. What is the legal structure of the Vita Cortex company that is ‘unable’ to pay redundancy.
I note there is a Jack Ronan involved somehow.
Does this company or the directors have any connection with the Johnny Ronan / Barret controlled Treasury Holdings???
@Joseph, there is blogpost on the Vita Cortex dispute which may escalate next week if SIPTU follows through on its promises
https://namawinelake.wordpress.com/2011/12/14/the-vita-cortex-plant-in-cork-is-nama-being-unfairly-portrayed-as-scrooge/
No I don’t have the corporate structure, but three companies have been mentioned in the context of the dispute – A,B and C. A is Vita Cortex, B is a sister company in which there is a €2.5m deposit and C is a parent company which has loans acquired by NAMA which are in part secured by the €2.5m deposit in B.
NAMA won’t identify Company B or parent Company C.
What is confusing is the suggestion that there are other companies related to Vita Cortex, such as the one in Athlone to which equipment is scheduled to be shipped.
@Despero from recent REO report,expect to hear a lot from them this year they are insolvent,need to be closed.The fee gouging by Treasuary on BPS and REO makes NAMA look fatuous and incompetent,they were exposed as amateurs,its just not acceptable,made NAMA look naive and imprudent,banks have frozen or are no longer funding spec.development in London.
NAMA/Irish Taxpayer is paying the taxes,security,repairs and maintenance on this London folly,feeding Engliish firms for the pleasure of owning and maintaining an ego trip.It was always too big for REO.
Throw in the reputation risk of doing business and no one was ever going to touch a JV,except perhaps fictional cartoon characters from far flung places.
“The Group continues to engage with prospective investors identified during the global
investment roadshow with the aim of introducing a long term equity partner(s) into the newly
formed Battersea Power Station vehicle. After generating a significant degree of interest from prospective investors, the process of identifying the development partner(s) for Battersea Power Station and agreeing terms is approaching finalisation of a shortlist of potential investors. Successful completion of this process and the subsequent capital injection will allow the Group to repay and/or refinance the OLNs and the existing Battersea Power Station loan facilities and facilitate the procurement of development finance.”
http://www.realestateopportunities.co.uk/PreliminaryReport2011.htm
Yeah,really,significant interest,finalizing,potential investors……two loan extensions plus lots and lots of fees courtesy of the Irish Taxpayer.
@JR their is a separate division in the Treasury owned building,the Irish Taxpayer pays rent on for NAMA,it’s called the “Moe,Curly and Larry” corner,adjacant to the garbage.Jack R.according to most reporting is the “cousin” and uncle of the gormless and obnoxious James R.,reporting had him NAMA bound completing the trifecta.
Johnny R.has limited personal guarantees, NAMA would be negligent in not perfecting them this year,REO is bankrupt and can not service debt.
What incompetent stooge at Anglo lent 8,000,000 to a DIT student,hope Daddy signed something,close REO down stop paying Treasury outrageous insulting fees,it’s a national disgrace.NAMA has to be embarrassed on BPS,once is a mistake twice is a habit.
The mail did great piece on this,linked it.
http://www.dailymail.co.uk/news/article-1293783/Builder-Joe-OReilly-friend-Fianna-Fail-frolics-sun-NAMA-takes-Anglo-debts.html
@NWL apologies it’s the John R. that,completed the trifecta not James R.So many of them in NAMA hard to keep track.
@JG A little nugget to send the blood pressure up.
Discussion with FÁS Thursday, 1 December 2011
Venue: House of the Oireachtas EXTRACT
“Mr. Paul O’Toole(Director General, FÁS) called and examined.
Chairman: What is FÁS’s plan with regard to the offices in Birr? I understand the agency has offices at a number of locations there. Is that correct?
Mr. Paul O’Toole: In Birr, we have one temporary facility. That was taken on to house an advance party of personnel. The idea was that decentralisation was to occur and the site was bought with a view to its being developed. FÁS took on a temporary premises in Birr for an advance party of staff. This was originally set up to accommodate 40 to 50 personnel. Matters have moved on considerably and the operation is now a great deal smaller. There are now fewer than 20 staff – perhaps 15 or so – housed at the facility in question. There is a break clause coming up in respect of the premises next April and we intend to invoke this. In other words, we will vacate the premises.
Chairman: What is the year-on-year cost of the lease relating to the premises?
Mr. Conor Dunne: The rental cost is €100,000 per annum.
Chairman: The premises originally accommodated 40 staff but there are now fewer than 20 there.
Mr. Conor Dunne: There are 14 staff working at the facility. We have put in place there a jobs club and an employment service clinic.
Chairman: Mr. O’Toole stated that it is intended to invoke the break clause relating to the premises next year, regardless of whether the decision to relocate to—–
Chairman: . In the context of the current headquarters, who is the landlord?
Mr. Conor Dunne: I think it is a company controlled by Treasury Holdings.
Chairman: So FÁS is locked into an agreement with Treasury Holdings which, I presume, includes an upward-only rent review of €1 million. That is fine. To clarify what was stated earlier, FÁS is continuing to engage with Treasury Holdings in respect of the rent.
Mr. Conor Dunne: We are negotiating with Treasury Holdings at present.
( Good luck with that Government – the rest of their tenants have had no success. Remind them that you are giving them a dig out with Battersea park site and mention the rent roll on the Treasury building or as Richard Barrett remarked jovially to Bertie Ahern at the opening of the national conference centre “keep pulling for us “.)
Gosh that was so nice of him to fly in and visit,I reviewed ALL publicly available REO and Opera documents,silent on any personal guarantees from that oenophile and well renowned wine collector,Richard Barrett.Two loan extensions on BPS and only ‘god’ knows how much cash was advanced to REO and BPS to pay Tresuary fees.They would also be one the main beneficiaries of the abortion that UORR became.Well actually the holders of the Commercial Backed Mortgage Securities or CMBS,OPERA,that is ahead and in first on REO Irish assets.
They should be closed down, but a top priority before ANY more funding is getting Barrets personal guarantee.Failure to do that MUST be career ending for whoever has the file at NAMA.Cut off the cash,they are and have been a national embarrassment,no institutional investor or public company was ever going to JV the BPS deal with that clown Johnny Rowan.WTF was NAMA thinking.
@Despero
It certainly sent the blood pressure up. What a sham of a Republic that allows this.
I think it would be a good idea to deduct the annual rental cost from McCreevy’s pension. He was after all the person that insisted on the disastrous stroke that gave rise to the cost in the first place.
Ireland needs to start getting tough with the people that wrecked the country.
The Indo was just rehashing an article of mine from nearly a year ago, mentioned previously here.
https://namawinelake.wordpress.com/2011/01/25/is-nama-breaking-competition-law-in-its-dealings-with-the-revenue-commissioners/