It is being reported this morning that NAMA is now asking its developers for copies of tax returns in order to check for inconsistencies between the statement of affairs submitted by developers with their NAMA business plans, with what developers have been reporting to the Revenue Commissioners (Irish tax authorities). The implication is that some developers might have been concealing assets from NAMA, but disclosing the assets to the Revenue Commissioners – so inconsistent as well as dishonest is the suspicion.
It is also being reported that some developers have refused to hand over copies of their tax returns to NAMA. A NAMA spokesman said that the Agency “often (depending on the case) request copies of these returns and, in the case of co-operative debtors, there is usually no difficulty as the returns will corroborate information that they have otherwise provided” If the developer refuses, then the refusal might – and no more than “might” – “cause the Agency to seek further information about a debtor’s financial position – including perhaps the use of credit verification services – in order that the Agency can satisfy itself on the completeness of the information provided to the agency” You might recall that before Christmas, NAMA advertised a tender for a panel to provide “credit verification services”.
Every time I hear “NAMA” and the “Revenue Commissioners” associated together, I think back to the European Commission decision approving the NAMA scheme in February 2010. The decision rejected a term in the NAMA Act that would have allowed NAMA to seek information from the Revenue Commissioners – the concern was that such an extraordinary power would give NAMA a competitive advantage over other banks, Ulster Bank for example. Both NAMA and Ulster Bank are trying their best to get the most back on the bad loans that they both manage, and both are trying to enhance their loans as best they can and in some instances portfolios of loans will be sold. So both NAMA and Ulster Bank, in the eyes of European Commission, should have a level playing field where neither has superior access to the Revenue Commissioners.
It is understood that NAMA’s seeking tax returns from developers is not different to NAMA’s competitors. NAMA is obliged to inform the Revenue of any situation where it believes there has been a breach of the law in relation to tax. And under Section 204 the Revenue are empowered to seek information from NAMA.
So although developers might not like the implication of NAMA demanding tax returns, it seems that NAMA is not acting differently to other banks. So really all we have learned this morning is that some developers are not cooperating and that such non-cooperation might lead to investigations.
NAMA Wine Lake 
Well if NAMA is paying a salary to a developer, they’d need this to calculate monthly payroll :)
I’m a bit lost over this. Why are NAMA making this noise when they know they’ve no basis to make such an ask. What are they really after. Is/could this be an opening gambit.
I really don’t like it when things are opaque. It forces whomever they are dealing with to follow into such convolutions. Who was it said about that he would come in the pantry window even though the front door was open.
Really? Because every time I hear the two together, I think of Frank Daly’s chairmanship of the Revenue during the Ansbacher accounts scandel.
Which brings us back to the current topic? Was anyone prosecuted, jailed, named or even fined for the Ansbacher accounts, and will there be any consequences for developers not cooperating with Nama and refusing to hand over their tax returns?
@OMF, I suppose we might all perform differently with a Rorschach test interpreting NAMA’s association with the Revenue Commissioners.
On the second point, the Independent today reported that developers might face “legal action” if they didn’t hand over copies of tax returns if requested by NAMA, which sounds very serious indeed but if you read on, you’ll see they mean NAMA may foreclose on loans/assets. Presumably even that would only apply if the loans were in default. So the answer to your question is that NAMA may withhold discretionary support for developers if developers don’t cooperate.
For C******s sake, what is going on?
People who are having billions, even hundreds of billions, of debt paid off by the State and are still collecting hundreds of thousands annualy in salary are telling the same State what THEY will ACCEPT and what THEY will NOT ACCEPT.
Is this a joke?
These companies should have been put into receivership or liquidation right from the start.
No. Instead we have BUSINESS PLANS, REVISED BUSINESS PLANS, payroll cheques, FEES.
One has to ask why? Why is this?
What do these people hold over the State? And who in the PS do they hold it over.
@Joseph, NAMA says that those developers with whom it is generally cooperating are handing over tax returns when asked. If they are cooperating with NAMA, presumably that is when they get a salary. If not cooperating with NAMA, then NAMA is foreclosing and appointing receivers – there’s a fairly lengthy list of foreclosures here from 2011 mostly.
https://spreadsheets.google.com/ccc?key=0AlV6jFjykyK6dFJsX21NMzJZOWRxUzFhTDUyOGhxQmc&hl=en&authkey=CP2nmIUN
NAMA isn’t handing out salaries (and performance incentives based on sale values of assets) willy-nilly. It says it is doing it because it is cheaper than appointing receivers.
NAMA controls the loans for some 850 developers and the scale of the operation – acquiring €74bn of loans at face value – means that they still haven’t gotten through all of the business plans. I notice that they have appointed receivers to some smaller-scale developers but I’d guess in most instances, they want to see what the developer business plan looks like and also how competent and committed the developer is, before taking an enforcement decision.
Lacking FICO scores,one would have expected this to be a prerequisite for any personal guarantees.
NAMA is gearing up for loan sales,lacking FICO scores new buyers may request the current tax returns of borrowers.Looks,like some housekeeping,if you provided or are providing personal guarantee current returns appears sensible and reasonable.
FICO
A type of credit score that makes up a substantial portion of the credit report that lenders use to assess an applicant’s credit risk and whether to extend a loan.
Read more: http://www.investopedia.com/terms/f/ficoscore.asp#ixzz1jofAN400
@ John,
I’m not sure about FICO in this context. I’ve only seen the term FICO in an American context mostly for mortgages. Subprime and ALT-A mbs were often defined by FICOs under a certain score, though ‘creative mortgage’ products were also bundled up.
@AM its just a tool to measure credit worthiness or otherwise of borrowers.
Not relevant or used in non recourse situations,only applicable if recourse,or where personal guarantees involved.
NAMA announced that after a beauty parade,it has selected approved loan sellers or advisors recently.The intent is clearly to sell on some loans,in the US we get what’s called the “tape” basically all the data on a loan pool.
Included,on that spreadsheet are the FICO scores of the borrowers.
New loan buyers,epically if enforcement action may be involved to perfect person guarantees would want as much info as possible.
The pricing would be impacted,NAMA I assume will circulate this info. with the loans where personal guarantees involved.
I agree with John. It’s all part of the run up to selling portfolio loans or loan books. Straws in the wind, a bit like the current talk about NAMA preparing to put receivers into three debtors more over the coming weeks.
@OMF, The difference between us (the Irish) and others, in my experience, is that the bottom of the market is registered with the jailing of those responsible and people feel that they can move on with their lives. It never happens here, that’s why we always live in the past – there’s no retribution.
@WSTT in US there is a deduction and incentive to file jointly,husband and wife,promoting the scanity of marriage and all that.
Are joint returns common in Ireland,is NAMA still looking to poke around in the WAG’s knicker drawer,
Shock, horror, some of our fine upstanding developers might be not be telling the truth.
This is truly scandalous.
Is there gambling in the casino?
NWL: Does NAMA demand a Tax Clearance Certificate from the developers who are cooperating? If not. Why not?
@jg, Most married couples file jointly, but there was an incentive to file separately from a tax allowance point of view. I think we lost the “sanctity of marriage” thinking sometime around the “noughties” with our european identity and newly-found promiscuity.
My mother used to say that “you’d think sex was just invented” if you listened to the young generation. I see that stem cells from younger mice doubles the lifespan of the old ones – so maybe I’ll shut up and dream of re-capturing my youth.
@WSTT perhaps NAMA wants to take a sniff at any borrowers joint filings,in some states husband and husband or wife and wife can file jointly and avail any tax deduction,but not federally.
Basically,any gay developers in Ireland would be a better position for NAMA.
@jg, Well, we both know who they are!
@WSTT its a serious blog,but as my kids would say LOL,work to do.
Quick question, apologies NWL,would Aldi be contractually obliged to pay rent on its Irish stores in euros,obliterating the punt nua risk in buying one.
Re Aldi:
In normal times, as we have seen with upward only rent reviews, a contract is contract. If the contract says Arabian Shekels then that’s the deal.
How the Government would handle contracts if we hit the big D is anyone’s guess. You would expect that all Government contracts would change to PN’s (Punt Nuas). Private contracts would probably also convert at the rate on the day of conversion. This would ignore the massive drop after conversion.
In private contracts a key element is which country’s contract law applies. You know the section in most contracts that says the law of X country will apply.
If the contract is subject to Irish law then that would apply. It’s all fine to say Aldi will have the contract subject to German law but how would it be enforced in Ireland in the chaos likely to follow the big D would be a major issue.
The only certainty is that the lawyers would have a ball and demand their usual outrageous fees (probably in gold) with lots of slow contentious work directly proportional to the depths of their clients pockets.
Noticed a nice Aldi for sale in todays IT,The Boulevard,Sandyford.
Rather low end use for the surrounding demographics,interesting what it trades for.
slightly off topic,
I saw the picture of the sunken cruise ship and all the hullabulloo about the absent captain, and I was wondering what Brian Cowen must think of the guy, and if someone could lock both of them in a room.
http://www,sfcawriter.wordpress.com
actually not so off topic in retrospect
woops typo above
http://www.sfcawriter.wordpress.com
Hi wstt
i know someone, sports car, luxury pad, the works, until a few months ago, he knocked on my door to say goodbye. He had all his earthly belongings in a plastic bag over his shoulder. He lost everything on Geron.
While this was a stupid mistake, a lot of these same investors probably got burned bigtime on celera in the 90’s, could be wrong about that, but I doubt it.
So, in short, much trepidation about stem cells as an investor, and as a scientist, jeez that stuff only works in mice and last I looked I was a man, and it’s a big jump in technology from on to the other. Beware.