Archive for December 3rd, 2012

“The director of the company has complied fully with the requirements of accounting standards in respect of these properties and has valued the investment properties to the best of his ability, at open market value as required by SSAP 19. He has also revalued the units in the Unit Trusts taking into account the values of the properties held by the Unit Trusts. However, in the current market conditions, we were unable to make an assessment of the accuracy of these valuations. Owing (sic) the unstable nature of the current property environment we were unable to obtain sufficient appropriate audit evidence regarding the valuation of investment property in Unit Trusts by using other audit procedures” Qualification by auditors to the accounts of Killultagh Estates Limited for the year ended March 2011

The 2011 accounts for one of NAMA’s biggest developers in Northern Ireland, Frank Boyd’s Killultagh Estates Limited, were published on 30th October 2012 and are available here. The accounts of the company in which Frank is now the sole director show a total recognized loss for 2011 of GBP 80,312,288 (€98.9m) compared to GBP 51m in 2010. If that weren’t concerning enough, the auditors qualified the accounts in the manner shown above, which boils down to a concern that there is little evidence on which to value the property still held by the company.

The group balance sheet shows GBP 154m of fixed assets, mostly property and creditors falling due within one year of GBP 239m, mostly bank loans, and it is understood that NAMA remains a major lender to the company. The group is balance sheet insolvent to the tune of GBP 81m.

The company owns North Quay Developments Limited on this side of the Border, a company whose directors are recorded as Richard Steenson (43), Michael Allen (71), Michael Lamont (53) and John Brick (48) and also has a 52% stake in North Quay Property Company Limited. These companies appear to be associated with the Bridgewater Centre in Arklow. The BBC reports that amongst Killultagh’s property “are the Bowen Square shopping centre in Northamptonshire, the Pavilion shopping centre in Hertfordshire, the White Rose centre in Rhyl” and the Connswater shopping centre in east Belfast.

Frank, or to give him his full title, Alphonsos Edward Boyd (58) – pictured here alongside his wife Rose – is one of NAMA’s biggest developers resident in Northern Ireland, where he resides at the vast Rademon Estate in county Down. Rumour has it that the helicopter has gone and seems now to be registered in the Ukraine, though Frank still holds on to at least one racehorse.  The accounts show directors’ remuneration of GBP 103,000 in 2011.

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NAMA, according to Minister for Finance Michael Noonan is neutral on where one of its borrowers declares themselves bankrupt and so far over 20 of its developers – including Bernard McNamara, Paddy Shovlin and Ray Grehan – have been declared bankrupt in the UK. On the other hand, IBRC or Anglo as it once was, challenged Sean Quinn’s bankruptcy in Belfast and Minister Noonan says that IBRC’s view on jurisdiction where a borrowers seeks bankruptcy is influenced by commercial considerations. AT present, Bank of Ireland is trying to challenge the London bankruptcy bid by the O’Donnells, Brian and his wife, Patricia. Earlier this year, AIB did try to bankrupt Ivan Yates in Dublin, but were unsuccessful on a technicality but there doesn’t appear to have been any challenge to Ivan’s subsequent bankruptcy order obtained in Wales. A private individual, Theresa McGuinness was able to successfully challenge Tom McFeely’s bankruptcy in the UK and given that NAMA is a creditor of Tom’s and didn’t join in the action, you can deduce that what Minister Noonan says – that NAMA is neutral – appears to be accurate.

But today we hear of what is believed to be a first: the Revenue Commissioners – Irish tax authorities, once feared but after the Mick Wallace affair, a bit of a joke – are seeking to reverse a Belfast bankruptcy bid by Longford car dealer, John Kane who is understood to owe €5m to the Revenue. Last week at Belfast’s High Court in a hearing in which the press was excluded due to objections by John Kane, the judge is understood to have rescinded a formally-approved bankruptcy order and set the matter down for hearing on 28th January 2013 when it will be decided if John can indeed seek bankruptcy in Northern Ireland – the Revenue’s case is understood to centre on where John lives and works.

It seems that Official Ireland is having difficulty resolving the issue of Irish nationals seeking bankruptcy in the UK where there is a 12-month discharge period compared with a 5-12 year period in Ireland and a 3-6 year period contemplated in the new Personal Insolvency Bill which is wending its way through the Oireachtas and may be operational by the second half of next year.

UPDATE: 3rd December 2012, The BBC is now reporting the matter and says that John was declared bankrupt in June 2012.

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Again, with apologies to the non-Irish audience who will be puzzled as to why more detail can’t be provided on the following blogpost – our court system is primitive and opaque. On Tuesday last, 27th November 2012, two individuals initiated two separate legal cases at Dublin’s High Court against respondents which include NAMA.

The first case is taken by Tony Ward who is represented by McCartan and Burke solicitors. The case reference is 2012/ 12018 P and the respondents are named as (1) Gerry Fagan trading as Oceanico Developments (2)  MORGADO DA LAMEIRA EMPREENDIMENTO TURISTICO E GOLFE SA (3) OCEANICO LUSOIRLANSES INVESTIMENTOS IMOBILLIARIOS E TURISTICOS SA (4) IRISH BANK RESOLUTION CORPORATION and (5) NATIONAL ASSET MANAGEMENT AGENCY. As is usual with recently-filed cases, there is no solicitor on record for any of the respondents.

The second case is taken by James Hiney who is also represented by McCartan and Burke solicitors. The case reference is 2012/ 12022 P and the respondents are, as in the previous application, named as (1) Gerry Fagan trading as Oceanico Developments (2)  MORGADO DA LAMEIRA EMPREENDIMENTO TURISTICO E GOLFE SA (3) OCEANICO LUSOIRLANSES INVESTIMENTOS IMOBILLIARIOS E TURISTICOS SA (4) IRISH BANK RESOLUTION CORPORATION and (5) NATIONAL ASSET MANAGEMENT AGENCY. As is usual with recently-filed cases, there is no solicitor on record for any of the respondents.

In the expensive and oftentimes primitive Irish judicial system, third parties – and that includes barristers acting in the case – are unable to access documents from the Court Service. So at this stage, we do not know the nature of the application or remedies sought. NAMA doesn’t comment on individual legal cases.

A year ago, it was reported that NAMA was trying to sell €500m of loans which had been advanced to Gerry Fagan and his Oceanico vehicle, which was planning to build golf resorts in Portugal and the US. There doesn’t appear to be any report of that sale being completed, but such is NAMA’s lack of transparency, we wouldn’t really know if they had been sold – NAMA recently said it had sold €1.9bn of loans, but €800m will be Maybourne’s €250m will be Donal Mulryan’s and €600m will be Cyril Dennis’s.

To date in 2012, NAMA has initiated 37 cases in Dublin’s High Court and has been on the receiving end of eight.

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“ I want to tell you Claire that that is a lie, and it should be nailed once and for all, now over to Stephen and he is an independent journalist, that isn’t true. The Shinners, the Shinners  and the party that negotiated it, Fianna Fail, come out from meetings and say “well, that’s not what they’re saying to us”. I’m saying that that’s what they’re saying to us and that’s what Fianna Fail negotiated”   Minister for Communications, Energy and Natural Resources, Pat Rabitte on 1st December 2012, the Claire Byrne show on RTE – podcast here, from 42:00

He was responding to this comment from presenter,  Claire Byrne.

“But Stephen [journalist, guest], can I ask you a question, has it [the property tax] been imposed by the IMF, because the other political parties who meet with the Troika representatives on a fairly regular basis, say they don ‘t care where the money gets the money from, they’re not saying ”

This is what the Memorandum of Understanding with the bailout Troika says with respect to Budget 2013.


It says “Without prejudice to the minimum consolidation amount referred to in the previous paragraph and to the requirements to achieve the agreed fiscal targets, the Government may, in consultation with the staff of the European Commission, the IMF, and the ECB, substitute one or more of the above measures with others of equally good quality based on the options identified in the Comprehensive Review of Expenditure (CRE). “

In other words, we can identify alternatives and in consultation with the Troika, can implement these instead. The Troika, according to the Opposition, are primarily concerned with the deficit between spending and taxation be reduced, and that the country return to a balanced budget. This rings true, but regardless of Opposition claims, the Memorandum spells it out in black-and-white.

And on Friday last at midnight, the Department of Finance published its forecast of Government receipts and expenditure for 2012 and 2013, the so-called “White Paper”. This is the forecast for voted capital expenditure.


The budget for 2012 for voted capital expenditure is €3.6bn. This is OUR money which the Government agreed to spend in the economy in 2012. Estimates vary but seemingly between 10-17,500 jobs would be protected or created for each €1bn of spend.

It has been obvious in recent months that capital expenditure was being reined in to offset overspends in current expenditure, particularly in health and to a lesser extent, social protection. When challenged on this, Minister for Public Expenditure and Reform Brendan Howlin has repeatedly insisted – for example here and here and here and here and here – that no, although capital spend was running behind the monthly profile of budget spend, that by the end of 2012, we would be back on target.

“Information from Departments indicates that the bulk of their remaining capital budgets will be spent by year end. The spending pattern is in line with trends from previous years which show that the bulk of capital expenditure takes place in the last quarter of the year.” Minister for Public Expenditure and Reform, Brendan Howlin on 20th November, 2012 repeating a statement given in September and October 2012, when the monthly Exchequer Statements showed capital spending lagging behind budget.

Now we see that capital spend is forecast to be down €189m on the €3.6bn budgeted. That’s a loss to the economy of about 2,000 jobs.  And this is at the same time as Minister for Health James Reilly is dithering over a messy overspend in his Department, including on drugs and consultants.

Labour  and Fine Gael , together face a rotten set of choices on Wednesday next, and regardless of the bank bailout and bank debt, we must make progress with balancing our budget, but such challenges don’t justify bare-faced lies.

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