Not for the first time, or indeed the second time, but for the third time today NAMA is flailing about, trying to defend the sale of a property which was not placed on the open market. And this time, the buyer is a NAMA employee who is now according to some reports, an ex-employee. John Mooney in the Sunday Times broke the story this morning – the article is here behind a paywall.
NAMA has already sold two substantial landbanks, both on the outskirts of Ireland’s second city, Cork in controversial circumstances. In the first reported in January 2012, the sale of 125 of land for €3-4m merited a “for sale” sign stuck up in a field. The second – 450 acres sold in April 2012 for around €7m – didn’t even warrant a “for sale” sign and was sold off-market to a private buyer. Despite there being a paucity of transactions in the State, NAMA unconvincingly assures us that it achieved good prices for both sales.
Fianna Fail’s flaky senator Mark Daly has been trying to get a new Bill introduced in the Seanad which would force NAMA to make sure all property for sale under its auspices was publicly viewable and transparent. Alas, his Bill was shot down by parties who have a majority in the Seanad and those same parties failed to propose an alternative.
Today’s news is that NAMA sold a five-bedroom house to an employee. NAMA is reported to be claiming that “at this stage” there is no evidence that the house was sold below market value.
And frankly, were it not for the fact that the property didn’t come onto the open market where its price might have been tested, this would probably not have made the headlines. After all, what is wrong with a NAMA employee using part of his average salary of €103,000 to buy an Irish property?
But yet again, NAMA is on the ropes defending its procedures and says that it has ordered its internal auditors, Deloitte, to investigate the matter. Apparently the focus of the investigation will be whether or not the employee, or ex-employee, disclosed the purchase, which seems a lot like closing the stable the door after the horse has bolted.
NAMA claims generally that it cannot offer its developers’ property for sale as this would mean NAMA was disclosing confidential information – after all, if you borrowed €10m from Bank of Ireland to develop a property which you were now offering for sale, you wouldn’t want Bank of Ireland advertising the fact that you had a loan. What NAMA conveniently overlooks is that these sales will generally mean there is a shortfall or default on the repayment of the loan. And the shortfall is being picked up by you because you are paying for the bailout of the banks. And in those circumstances where there is a shortfall, we want to know that NAMA and the developer did their level-best to get the best price.
So there is little sympathy for the Agency here today, because it might have facilitated the development of procedures to avoid these accusations of chicanery. But the main blame must lie with our legislators – TDs and senators – who have failed to help NAMA demonstrate it is operating so as to maximise the returns from its assets.
UPDATE: 6th August, 2012. The employee at the centre of the above storm is Enda Farrell, a portfolio manager at NAMA who left the Agency in April 2012. It is said that he, together with his wife Alice Kramer bought the property from a NAMA developer, Thomas Dowd (Tom Dowd), an associate of Derek Quinlan. The property is called Ladywell in Lucan west Dublin. It was bought for €1.2m by Tom Dowd “about 10 years ago” and the purchase price “earlier this year” is said to have been €410,000. According to the Irish Independent today “He denied yesterday using insider information to target the house owned by Mr Dowd, saying it was public knowledge that the property was in NAMA. He added that the house was unoccupied and in bad condition, so it was reasonable to assume it was for sale. He then approached Mr Dowd directly.” Sounds fishy because the property is not apparently on the January 2012 NAMA foreclosure list.
NAMA Wine Lake 
Isn’t the only one. Property has also been sold to current employees. One employee bought a property in drumcondra for €200,000 when it was €750,000 in the “boom”
The apathy and complacency of the Irish masses will allow this to continue. What we’re witnessing now are the makings of a future tribunal. And we won’t care then either.
Sounds more like a rouge xemployee than any master plan by NAMA.
It happens in most organizations,as much a statement about human nature as a reflection on NAMA,given the cast of chancers they deal with daily,it’s a surprise there have not been bigger more eloberate schemes.Tiny labour pool to pick from,easy to prevent this,stop selling off market.
If they guy got a mortgage the bank would have looked for a reference, NAMA management had no SOP in place to request the employee disclose the details considering the possibility for insider trading that is yet another management failure of this growing parasite
@Rich,the ST artice is silent on any mortgage,NAMA actually does not have any employees,they work for the NTMA.
Perhaps,the NTMA needs to take a look at its practices and procedures here.
@John
I guess your point is factual if somewhat pedantic, best practice in internal governance would have seen our banks, insurance companies, building standards etc regulated properly – this is an an unforgivable avoidable disaster
All…. Is this a sighting of the first (or second) swallow? As a general statement, there is no single field of activity, not a single institution, free of corruption. Just look at the clergy. Ireland is breeding a new world-class mafia.
Stockholm syndrome, or capture-bonding, is a psychological phenomenon in which hostages express empathy and have positive feelings towards their captors. These feelings are generally considered irrational. The FBI’s Hostage Barricade Database System shows that roughly 27% of victims show evidence of Stockholm Syndrome.
Has NAMA discovered the Reverse Stockholm Syndrome, soon to the be known all over the world as the NAMA Syndrome? This would be recognised where the jailer adopts the character and traits of their inmates, after having experienced too much exposure to ex-developers.
Corruption is like a snowball, once it’s set a rolling it only increases. Don’t you just adore the inevitability and magnificence of it!
This is Corrigan’s,or Mr Teflon’s mess from NTMA,looks like Frank inherited this fellow.Is NAMA the dumping ground for incompetent NTMA employees.
“Enda joins from NAMA, Irelands property work out vehicle, where he was made one of the first officers there in 2009 and was responsible for the property due diligence on a EUR74.2bn portfolio of property related loans acquired from a number of Irish financial institutions. Prior to NAMA, Enda worked for the National Pensions Reserve Fund of Ireland. He has also worked for Pramerica Real Estate Investors and Hammerson.”
http://www.propertyfundsworld.com/2012/03/07/163242/forum-partners-appoints-enda-farrell-representative-ireland
The NPRF is a division of the NTMA,just like NAMA.
“The Commission performs its functions through the National Treasury Management Agency, which is the Manager of the Fund.”
The timing of the story is curios,only big event this week that I am aware of is KBC V Tresaury,on Wensday,can’t really figure out if this will have any impact there.If the reporting is accurate he certainly displayed lots of initiative.
He clearly identified his target,tracked down ownership,knocked on doors,made acceptable offer that got approved and closed.Odd that a sophisticated busisneman would deal with a “randomer” who claims not to have identified his employer.Strange story,NAMA looks a bit idiotic here,given their public statement when Enda joined Forum.
If only…..
“A Nama spokesman told the Sunday Independent that no properties are sold without a competitive bidding process and that all properties are independently valued before any sale. All sales are also reviewed by the Comptroller & Auditor-General’s office.”
http://www.independent.ie/business/irish/nama-says-its-not-worried-as-manager-quits-for-fund-3067656.html
When you take a bunch of people who think they are Demi-Gods out of their previous existence, where they were bankers and fund managers in an environment where SIVs, Libor manipulation, Eurobor manipulation, Swap mis selling, interest & fee overcharging were commonplace and give them a position of absolute power, what do you expect !
Regarding x employees this is all very strange,are Anglo employees not civil servants.If not why not,they should be excluded from this type of employment for at least a year.This is a very murky situation indeed.Was getting over 220,000 a year at Anglo,heading up the NAMA unit,now negotiating for debtors before same team he assembled and ran.Apparantly there was a redundancy payment involved too,you really can’t make this sh*t up,only in dirty little Ireland.
Warren Private was extremely active in the US,at the very top off the market,appear to have navigated the downturn very well.This hiring will certainly assist them,Niall,must be intimate with all the procedures,valuations,deals,personalities at NAMA.Warren even boats about his impeccable connections and expertise with NAMA.
“Niall is a Director of Warren Private having joined in May 2012. Niall has over 20 years of varied lending experience and joined Warren Private from Irish Bank Resolution Corporation (formerly Anglo Irish Bank) where he spent almost 8 years. In his most recent role, Niall established and headed up the dedicated Anglo/IBRC NAMA Unit, which manages circa €35bn of loans for NAMA, giving him unique insight into, and understanding of, NAMA. Prior to joining Anglo Irish Bank, Niall gained broad experience in a variety of lending roles in Ulster Bank and AIB Group spanning the SME, large corporates/plcs and property finance sectors.
Niall is responsible for Warren Private’s Banking and Debt Advisory Division. In his banking and debt advisory roles he assists individual clients in framing, negotiating and implementing large-scale debt management strategies with their lenders (including NAMA). Niall also plays a significant role in managing Warren Private’s existing loan portfolio.”
http://www.warren.ie/people.html
Piece in yesterday’s IT regarding this.
“THE FORMER joint head of the National Asset Management Agency unit at Irish Bank Resolution Corporation who was due to join AIB after leaving the former Anglo Irish Bank has dropped his legal action against AIB over a new job….”
http://www.irishtimes.com/newspaper/finance/2012/0807/1224321630579.html
Any update on the investigation into Farrell and Kramer ???
@2Pack, nothing from NAMA, there has been reporting the Deloitte has spoken with Enda Farrell. I am sure it is a subject that will be picked up by the TDs when they return on 18th September, but alas it is a feature of Irish public life that there is next to no oversight of public administration for the two months of the summer recess.
Damn Right there NWL, no way of getting a PQ down for answer in the mid July- mid September window.