Archive for April 5th, 2013

The Minister for Finance, Michael Noonan has this afternoon announced that he has appointed an ex-IBRC director who lost his job on 6th February 2013, to the board of NAMA. NAMA has been one man short on its board for almost a year with Peter Stewart and Michael Connolly departing in 2011, and just John Mulcahy promoted and appointed to the board in 2012. This afternoon, Minister Noonan has announced that Oliver Ellingham is to join the NAMA board, he was previously from October 2011-February 2013, a non-executive director of IBRC.

Oliver is an accountant and career banker.

Somehow, the NAMA chairman Frank Daly was induced to make the following minimal and bland statement “I welcome the announcement by the Minister for Finance of the appointment of Oliver Ellingham to the Board of NAMA today. He is well placed to make a valuable contribution to the Board of NAMA”

Sammy Wilson, the Northern Ireland finance minister might not be best pleased that there is no Northern Ireland representation on the full board to replace Peter Stewart, and that he must do with a committee. Oliver’s experience in banking probably makes him akin to Michael Connolly, who was NAMA’s most senior banking man and head of the credit committee.

The IBRC annual report for 2011 says this of Oliver “Oliver Ellingham (55), was appointed to the Board on 14 October 2011. He is a chartered accountant and a former Head of Corporate Finance (Europe) at BNP Paribas and a senior executive within BNP Paribas UK. He currently holds Non-executive directorships in a number of companies including Vislink plc and the Naafi Pension Fund and he is Chairman and owner of Woking Storage Solutions. He previously also held seniormanagement roles within Charterhouse Bank (now part of the HSBC Group) and Robert Fleming (now part of the J P Morgan Group).” Oliver is pictured here on his LinkedIn profile.


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We seem to have forgotten that NAMA is selling €500-750m of assets a month, every single month by reference to the original book values of the loans it acquired. Remember that NAMA says it has, so far, disposed of €7bn of assets and this is by reference to NAMA’s values and NAMA paid just 43c in the euro when it acquired the €74bn of loans from the banks for €32bn.  The €7bn of disposals should on average relate to €16bn of loans by reference to their original values, and over the 30 months from mid-2010 to end of 2012, that represents an average of €542m disposals per month, every month.

And the constant question you all want to ask is “how well is NAMA doing?”

And despite this blog being mainly devoted to reporting on NAMA, and therefore should have some special knowledge in the area, the answer is “difficult to tell”

We rarely get individual accounting on NAMA’s disposals. We have a rough idea what happened with the €800m Maybourne loans and the €100m Montevetro building sold to Google in Dublin, but that’s practically it.

Fine, we don’t get individual accounting and NAMA will stonewall you citing “confidentiality” when it is challenged on individual transactions. But surely the NAMA accounts should tell us how it is getting on.

Again no, because there are so many damned accounting convolutions used in the NAMA accounts that we may not really know how NAMA is getting on until we start to approach its winddown in 2020. Some accounting standards mean NAMA doesn’t have to face the full reality of problem loans, whilst other accounting standards prevent NAMA from recognizing all the profit from its disposals. So, we can’t even look at the NAMA profit or loss and say, “that underreports the true profit” or “that underreports the full loss”

So, what we are left with is reporting on snippets of NAMA’s performance here and there in the hope that enough snippets will give us a picture of how well the Agency is doing. That’s how primitive it is and that’s as good as this blog gets.

This week we again get confirmation at how lousy NAMA is with marketing its property.


Take a look at the above listing of a property that NAMA has foreclosed. Here are the errors in NAMA’s record.

(1) NAMA says the property is on Saint Field Road. There is no such place, it is Saintfield Road and if you search for Saintfield Road on the NAMA database, you won’t find this result.

(2) NAMA has two categories of “other” in its type of property, there’s “Other” and “other” and one doesn’t pick up both

(3) NAMA indicates that the property is not for sale. But it is. Here’s the brochure, Colliers International is looking for GBP 1.25 (€1.5m) for it. Here’s page one of the brochure.


(4) Saintfield Road is in Belfast and that doesn’t appear anywhere in the NAMA description.

I know that the NAMA foreclosed list is the most popular feature on the NAMA website, and it is the window by which most people get to see what NAMA has to offer. The above property is noteworthy because it was reported by the BBC in Northern Ireland here.

NAMA’s presentation of its foreclosed property is a disgrace. There have been humorous swipes at the error-ridden database on here before – here and here, for example  – and NAMA has refused point-blank to provide a monthly update of the new properties that it adds to its foreclosure list, so you’ll have to trawl through over 100 screens on the NAMA website to see what is new, and the NAMA email function on the NAMA foreclosure page doesn’t work.

It was the BBC which reported that NAMA had foreclosed the major piece of development land in south Belfast shown above. It belonged to John McCann of McEneany Construction fame. It has, according to the BBC, planning permission for “247 homes comprising 117 townhouses, 68 mews houses, 14 semi-detached houses and 48 apartments” The BBC says that John is Dundalk-based, though the a local Dundalk newspaper said in 2011 that he had an address in Crossmaglen in county Armagh but was based in Switzerland. It is not clear if this is the same John McCann that NAMA sued last month in Dublin’s High Court. The land in Belfast is owned by Brooke Hall Limited, whose last accounts for year ended December 2010 are here, which show a balance sheet insolvent to the tune of GBP 3.8m (€4.4m) and which optimistically suggest the company will be able to meet its liabilities, in part, because of the assessment of “the current status of negotiations with NAMA”.

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The writing is one the wall for the Labour party which saw the reality of voter confidence in Meath East where it secured a paltry 4.5% of the vote, and a couple of days later the scales fell from its eyes when a national poll put the party at 7%. The party is deeply unpopular for a variety of reasons, not least the breaking of election promises but more practically the desertion of weaker sections of society which put their trust in the Labour party to protect their interests.

The outlook is not good either. None of us has a crystal ball to predict the economic conditions in the State in 2-3 years but the official forecasts from the Department of Finance are sobering. There will be 13% unemployment in 2015 and the bailout agreement with the Troika requires €3.1bn of additional budget measures in 2014, followed by an additional still €2.5bn in 2015 and an additional still further of €2bn in 2016 and we’ll still have an annual deficit of €5bn after all that.

Fine Gael has prevailed in the Coalition and the budgets in 2011 and 2012 were regressive and hit the weaker sections of society. The main tax increase in the last budget – the increase in PRSI which the IMF said in Ireland’s case was an income tax – hit the lower paid particularly hard. Right now, we have the Alice in Wonderland of the (Labour) Minister for Public Expenditure and Reform claiming that Croke Park 2 won’t affect the gross pay and allowances of workers on less than €65,000 whilst the 24/7 Frontline Alliance has very clearly shown that it will have an impact of 3-11.4% with the elimination and cuts to allowances. A staff nurse will see a 11.4% reduction in gross pay and allowances, whilst a €200,000 manager will see a 7.3% reduction. What Fine Gael wants, Fine Gael gets.

Does the Labour party think that as the next general election hoves into view that Fine Gael will throw it a few bones at its own expense? Seriously? Fine Gael tantalizingly close to an overall single party majority will suddenly devote itself to Labour’s core constituency in 2015/6? To paraphrase Michael Bailey, “will they fuck”.

This morning, one of Labour’s three MEPs resigned from the Parliamentary Labour Party. Nessa Childers has frequently taken a contrary position to the party, notably in her opposition to the appointment of Kevin Cardiff to the cushy role at the European Court of Auditors after presiding over a Department of Finance which withered during the crisis, topping it all with overseeing a €3.719bn error in the national accounts in 2011.

Nessa Childers joins the Labour party chairman, Deputy Colm Keaveney who had a rancorous falling out with the Parliamentary Party central command after last year’s budget. Deputy Keaveney joined former junior minister Roisin Shortall along with deputies Tommy Broughan and Patrick Nulty and was soon after followed by Senator James Heffernan.  Willie Penrose who resigned his junior ministerial fold in 2011 in protest at the closure of Columb Barracks in Mullingar has done his penance and returned to the welcoming embrace of the PLP. The central corps of Labour TDs must now be weighing up the realities of the last two weeks and the likelihood of the next two years, and the writing on the wall must be clear.

The two options available to Labour to save its skin would be a resignation from government or an election of a new leader who will be more forceful in pushing the Labour agenda in the Fine Gael dominated coalition. Would Eamon Gilmore whose ministers, with the exception of Brendan Howlin, will be over 65 at the next election really resign from government?

The next meeting of the Central Council of the Labour Party is on 18th May, 2013 when any one of the 67 members – of which only five are TDs – can propose a motion of no confidence in Eamon Gilmore and should the motion be passed by 45 of the 67, then Eamon is out.

This morning’s resignation by Nessa Childers tips this eventuality from a possibility to a probability.

UPDATE: 6th April, 2013. It seems that the second of the three Labour MEPs, Phil Prendergast is poised to challenge the direction taken by the Labour party. As well as “personally” wishing Nessa Childers well yesterday, the MEP for the South constituency has tweeted ” I’d prefer to move forward with the party but something has to give at leadership level” It is not clear if the “giving” involves a change of leadership or just a change of direction by the existing leadership. It is just over 13 months from the next European (and Local) elections, and a cynic would point to politicians saving their skins in the face of a wipeout and loss of office. That said, Nessa Childers has taken contrarian positions for well over a year, and her stance on Kevin Cardiff in late 2011 got her into hot water. The third Labour MEP Emer Costello is keeping her own counsel for the time being, but all three are staring at defeat in 13 months unless there are some major changes internally in Labour.


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In fairness, there had been a hearing scheduled for 10am local time yesterday in the Connecticut Superior Court in Stamford, in the NAMA case against the Dunnes, Sean and his wife Gayle. This is the case initiated last July 2012 where NAMA is alleging shenanigans in the transfer of wealth from Sean to the missus at a time when he was deep in hock to creditors, shenanigans vigorously rejected by the Dunnes. The case was scheduled to be heard way off in the future in September 2014 but there has been a lot of interim hearings to deal with various matters of disclosure and the like. Last Friday’s filing for bankruptcy by Sean Dunne in Connecticut seems to have stopped this other court case in its tracks. On Monday, Sean filed a motion to dismiss the case because of his bankruptcy filing.

Sean’s filing led to yesterday’s hearing being cancelled but that didn’t stop fearless journalists from both the Irish Independent and the Irish Examiner turning up. Orlaith Farrell and John Riordan duly attended as evidenced by John’s tweet below.


Simon Carswell, the finance journalist whom the Irish Times bizarrely transferred to the US gig last year wasn’t there, smugly telling enquirers that his article on Tuesday about the Dunne case meant the case would be cancelled. And indeed, if you look at the present record for the case, the status of all future hearings is “off”. If NAMA wants to pursue its claim against Sean Dunne, it will need do it in the bankruptcy court. The status of the case against Gayle Dunne is less clearcut, and is complicated by it revolving around her husband’s transactions.

Ah well, better luck to the old media on Monday next at the Sean Dunne bankruptcy hearing, and remember the bankruptcy court judge has threatening to dismiss the filing unless Sean complies with certain rules. Hopefully the new media will also have an attendance on Monday.


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When you drill down to the basics of this story, it is less funny and interesting than it first looks.

NAMA has had receivers, Gearoid Costelloe of Grant Thornton appointed to a Killarney property still legally owned by a religious trust called “St Brendan’s Trust”. It is a trust owned by none other than the Sisters of Mercy under the overall auspices of the Diocese of Kerry. The property in question is a 17 acre site near Rock Road in Killarney.

So, there you have it : NAMA, run by Brendan McDonagh, the Kerry native who still deals in “millens and billens” instead of “millions and billions” appointing receivers to God’s own alleged representatives – having been taught by them, very “alleged” – and worse, appointing receivers to a trust bearing his own baptism name.

The story is less interesting though, because the trust actually sold the land to a property developer, Galvin Developments in 2007. Galvin is a long-established company dating from the mid 1920s according it its website and is still controlled by the Galvin family and its current directors are Jeremiah, Colm and Donnacha Galvin. The company had intended to develop the 17-acre site into a nursing home, jointly with Mowlam Healthcare. The downturn in the economy and withdrawal of tax breaks put a halt to that development.

Galvin Developments failed to register the transfer of the land in 2007, and the religious trust remains the legal owner, and that is why the receiver was appointed to the trust, which is really just an administrative appointment because the land has commercially been transferred to Galvin.

The Irish Times, “the story of why” reports the story here today.

Remember you can see the list of NAMA’s enforcement actions here and in this regularly updated spreadsheet.

UPDATE: 6th April, 2013. The Irish Times carries a follow-up today which sheds more light on the 2006 transaction where the Sisters of Mercy sold the 17 acre plot to Galvin. The sale price was €30m, but the Sisters only received €18m and have been trying to recover the outstanding €12m since the agreement – it remains outstanding today. Galvin never registered the transfer and thereby avoided stamp duty, so it seems the Revenue Commissioners have also got an interest in this transaction.  The project was partly developed and is being marketed by Mowlam Healthcare today here. Galvin is said to owe €43m in respect of the development, so €18m for the land and €25m for the construction presumably which seems a lot. It also seems the nuns’ trust, “St Brendan’s Trust” was a little naive in “accepting” AIB mortgages on the property whilst it was still registered to the trust, and the Irish Times is today claiming that this “effectively” meant the trust was guaranteeing the loans. So the Sisters have come out of this with a net of just over €1m an acre but there is a contingent liability if the Irish Times reporting is correct.

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