Category Archives: NAMA

29/1/16: Nama and Value Destruction

There is a neat video circulating around that sums up Mick Wallace's questions about Nama, worth watching:

For those who want to see a more extensive listing of Nama firesales or, as I put them, Value Destruction deals, read here: and follow the link in my post to more.

Beyond this, on top of Wallace's questions, there is an outstanding issue of Nama involvement in continued legacy of Anglo interest overcharging (and see links at the bottom of that post).

1/1/16: Developers Questioning Banking Inquiry Report

While we do not know what is in the Banking Inquiry report signed-off this week, concerns being expressed by the two developers, namely Michael O’Flynn and Johnny Ronan, that the report is likely to be a whitewash of Nama is a legitimate one.

The inquiry basically and obviously failed to provide platform for the voices critical (or robustly critical) of Nama, opting instead to put forward testimonies of some developers who have potential coincident / congruent interest in seeing Nama escaping serious criticism.

Thus, legitimate suspicion can be (though we should wait to confirm or decline it) that the Banking Inquiry report will indeed skip over Nama's core role in creating a dysfunctional (and currently strongly legally challenged) crisis resolution environment in Ireland. And another legitimate suspicion (based on past record of coverage of the Inquiry in the media) is that most of Irish media will be unlikely to robustly challenge the report on any conclusions regarding Nama.

That said, let's wait and see the report...

25/11/15: Nama: That Gift Horse’s Mouth…

Back in June this year, I posted about 10 most egregious cases of apparent mis-pricing of assets relating to Nama sales:

Now, we can add a new one. Per Irish Times report (

“Blackstone, the world’s biggest private equity firm, is on track to make a profit of €43 million on two office buildings it bought in Dublin’s south docklands only two years ago. The company has agreed sale terms at €123 million for the Bloodstone Building and an adjoining block on Britain Quay – 54 per cent more than the €80 million paid for them towards the end of 2013.”

In other words, we have vulture fund that bough completed properties two years back and managed to squeeze 54% appreciation out of them by doing virtually nothing new, adding virtually no new value. And Nama added zero value to the buildings as well as it got them off Sean Dunne in fully completed form.

The cherry on the cake (for Blackstone) is that it bought the above buildings for roughly EUR100 million, along with a third building: Hume House on Pembroke Road in Ballsbridge. Blackstone is yet to sell Hume House. So Blackstone actual returns on Nama purchase will be going up and up.

The Irish Times article also references another Nama ‘deal’ for the taxpayers. “Early in 2013, King Street Capital bought the Bishop’s Square office building on Kevin Street for €65 million and last January it sold it on to Hines, the international property company, for €92.5 million – a price rise of more than 42 per cent.”

That would be the deal described here:

So between these two ‘deals’, Irish taxpayers have foregone collective EUR70 million. Thanks, Nama!

26/7/15: That Seagull Flock Model of Public Governance: The Banking Inquiry

Second, following the previous post on Nama, is the Banking Inquiry news:

The Banking Inquiry also has now adopted the Seagull Model for public transparency and governance: there are scandals and tantrums left, right and centre of the political spectrum. The gig is, of course, less of a maritime evocation as it is with Nama, and more of the landfill nature, but you get the picture.

Some chronology on the matters at hand:

  • Back in mid-July there were reports that a whistleblower - someone working for the Inquiry - came forward in April 2015 with the allegations that "relate to alleged preferential treatment which the whistleblower feels was given in the workings of the investigation team to the Central Bank and the Department of Finance. It is suggested the Central Bank insisted on a whole series of redactions in documents that it supplied. It is also being suggested that the Central Bank, at a critical point, was allowed a lengthy meeting with the lead investigator." Now, for those who do not know this, the Inquiry has two teams of 'advisers' - one that goes over submitted evidence and distills it to the members of the Inquiry - as far as we know, that team is composed of the Oireachtas employees - and another that prepares questions to be put forward by the members - which includes former banks and finance sector employees. Note: this is an important bit for the subsequent link on the matter from today.
  • Sunday Times a week ago also carried some details of the whistleblower allegations, specifically alleging that a number of undocumented meetings took place between the Central Bank, Nama and senior investigators on the banking inquiry. Other sources also include Department of Finance into the august list of entities allegedly granted unprecedented access to pre-brief the inquiry investigators. The same Sunday Times article also claims that: "It is understood allegations have also been made to Marc MacSharry, a Fianna Fail senator and inquiry member, that a second investigator quit the banking inquiry team on May 13 this year, citing concerns similar to those raised by the whistleblower."
  • Check the timeline: April 27 whistleblower allegations filed, May 13 another Inquiry official resigns on similar concerns, July 15 whistleblower allegations are leaked to press, July 23 inquiry into allegations set up. Things become swift, in Ireland, only after the media gets the news. Never before.

    • So on foot of the publicly leaked allegations, it was decided to do the most Irish of All Things and… hold and Inquiry into the Banking Inquiry.  As an aside, while the previous FF/GP/PDs governments can be collectively accused of having Leadership by Quangos fetish, the current one can be assigned a monicker of Leadership by Inquiries.
    • And, in a typical Irish fashion, the Inquiry into the Inquiry (shall we call it IiI here?) will have terms of reference that will include hunting down the wrongdoing of leaking the allegations to the media. As reported here: "The Oireachtas tonight released the terms of reference for Mr Allen’s investigation. He will investigate allegations that false information was given to Oireachtas Committee members, and preferential treatment was given to certain witnesses. The investigation will also look at alleged conflicts of interest that it is claimed were not appropriately handled by the inquiry’s investigation team. Mr Allen will also be required to examine the allegations in the context of the legislation underpinning the Bank Inquiry. The leaking of information to a journalist named by the whistleblower will also form part of the investigation." We can get a good sense of where the findings will go: a new battle between politicos and journos. There will be war… 
    • But, fear not: we already have one outcome of the whistle blowing scandal: the whistleblower has been punished. Per same report "The whistleblower’s pay has been suspended since last week after, it is claimed, they refused a transfer from a section within the Banking Inquiry." That should teach everyone a lesson: Ireland tolerates no whistle blowing. Never did and never will. Get over it, folks, and keep on pretending we have a modern society with all the trappings of transparency and ethics. This was confirmed in the Irish Times report here: "After the allegations were made, the whistleblower claims that their duties as an investigator were transferred on April 27th. A “false announcement of my resignation” was made during the week beginning June 1st, and their desk was cleared. Notification of their salary being suspended was received on July 15th."
    • Of course the irony is that back in March, the Inquiry heard from Dr Elaine Byrne that whistleblowers need not only be protected, but rewarded for their actions. Ah, yes… back to Ireland, thus...

    • Last week, the Irish Times carried some select excerpts from the whistleblower communication. These are worth reading: "The whistleblower claims that the terms of reference for a review of the allegations to be carried out for the Houses of the Oireachtas Service by Senior Counsel Senan Allen while including consideration of the claim that certain participants received favourable treatment do not detail or substantiate the allegations which include “off-the-record telephone calls and meetings” and “improper pressure on certain investigators to exclude certain relevant witnesses”.” It is also alleged that there was “significant ongoing and detailed leaking of information by a certain investigator” to a national newspaper. And the whistleblower claims that they were “routinely instructed to disregard redacted material” emanating from an unnamed institution, which “in my view could have proven to be extremely relevant to the proper processing of the investigation”. The “instructions were relayed to me by superiors and included instructions to inform the Joint Committee of Inquiry that participants had complied with matters related to compelled documentation, when in my view, participants were not compliant”. The “participants” are believed to be the Central Bank of Ireland and the Department of Finance." And further: "The whistleblower claims they were prevented from engaging in “basic investigative work and from exploring valid lines of inquiry”. “I am extremely concerned that the timeframe given to Senan Allen to conduct this investigation will ultimately lead, particularly in light of the limited terms of reference and in conjunction with the limited term period for a review, to a sub-standard and wholly inadequate review that will not broach the complexity of the allegations raised by me,” the whistleblower added. “Furthermore, the terms of reference are silent on the requirement to investigate the origin, publication and distribution of the false and defamatory statements made about me in an official report dated May 6th produced by the Houses of the Oireachtas service.”

    All of this brings us to the latest round of revelations from the Banking Inquiry published today in the Indo. Ah, the pearls include:

    • That "Morgan Kelly, Professor of Economics at University College Dublin, who notably predicted the property collapse, has turned down an invitation to appear before the inquiry." Frankly, why am I surprised? Why would anyone be surprised. Morgan is a serious scholar and has little time for the farcical performances. 
    • And then there is the controversy over political hissy fits triggered by the offer from David Drumm to testify on the matters of his recollection of the meetings with former Taoiseach Brian Cowen. Which I covered yesterday here.
    • For the last bit, the juiciest fare so far: "…the whistleblower has claimed this investigator, who was deciding what documents from the banks should be entered in evidence, secured a new job with the Bank of Ireland while working for the inquiry. The whistleblower was "shocked" when it was decided to allow the investigator work out his notice period with the same access to bank documents after he had accepted the Bank of Ireland job offer." 
    Oh dear… Where does one go from this? To 2016 headlines about some Inquiry staff getting cushy jobs in the state bodies with allegedly cushy relationships with the Inquiry?.. What is next for the Cosy Planet 'Ireland'?

    26/7/15: It Rains, It Pours… And Next There Can Be a Deluge …over Nama

    When it rains, it darn well pours… in the case of Nama and Irish Banking Inquiry, the rule is iron clad.

    First, Nama:

    Just yesterday I posted two links on most recent allegations concerning Nama in Northern Ireland. And today, we have a couple from the Republic.

    Per first link, apparently, "A furious row has erupted between developer Michael O'Flynn and Nama following his appearance before the Banking Inquiry." The row is about Mr O'Flynn's claim that he was pressured to sell assets to 'preferred bidders' over the top bidders.

    Nama says this is not true.

    We have no idea as to who to believe, although Mr O'Flynn has nothing to gain from making up anything about Nama, given he has now existed the wretched institution and is free to return to normal life. And Mr O'Flynn appears to have more to say about Nama that seems to be pretty much in accord with what other Namaed developers are saying and what Nama seems to be denying as well. "Mr O'Flynn said while the O'Flynn Group had formulated a business plan for Nama aimed at repaying all the money it owed, this had been rejected without any discussion in relation to its content".

    Which, of course, brings us back to that notion of value destruction that Nama should address before any inquiry into Nama attempts to address it.

    Recall that Nama required all developers to submit Business Plans. Following their reviews by Nama, Nama issued simple 'decline' letters, requiring new plans to be re-submitted. Nama subsequently rejected a vast majority of these as well. So far - pretty bad, but it gets worse. Nama rejections came with zero specific details given as to the exact reasons for the agency decision. These plans were prepared by professional teams (not by developers personally) and contained very detailed pricings, costings, analysis etc of assets covered by the plans, based on external evaluations, existent permissions and ventures, and so on. Nama appears to have offered no substantive reasons for the rejections of substantive plans. In the case of O'Flynn the allegation is now on the record. In at least five other cases that I am familiar with  the same has been also alleged and in some formed part of submission to the courts.

    The rejections of at least some plans led to Nama pursuing strategies for managing underlying assets that can be questioned in terms of their ability to deliver maximum value return to both the taxpayers and the original borrowers (Nama owes the latter the duty of care in relation to their assets). The shortfalls arising from Nama failure to execute reasonable plans was loaded, through personal guarantees, on the original borrowers. Which, effectively, means that for some reasons, undisclosed to anyone, Nama has opted to potentially dump vast amounts of risk and costs onto original borrowers. It would be damaging enough were this was done with at least a token of propriety in the form of explaining the rejection of the Business Plans. But it is doubly bad given that Nama seemed to have simply dismissed the Plans without any explanation.

    The second link is more distant to Nama operations than the first, so I won't cover it in any detail here. Still do enjoy Indo's "Daly's charity role is 'private'". Hint: keep an eye out for familiar names...

    No wonder the whole place at the higher reaches of the Grand Canal St is now resembling the flock of seagulls abandoned at sea by a fishing trawler: noise, feathers, chaos…

    Stay tuned for the Banking Inquiry shambles post next.