Seán Fleming (Laois, Fianna Fail) | Oireachtas source

Category C is correspondence from private individuals and any other correspondence.

Nos. 434C(i) and (ii) are carried over from last week. This is correspondence received from the chairman of NAMA regarding to the committee’s report on Project Eagle.It is a short letter and I will read it to members. We will not have a detailed discussion on it but we have to make some response. I will read it and I will ask at the conclusion of the meeting that we will note and publish it and forward it to the commission, in regard to which the Government has agreed terms of reference during the week, together with a statement from the committee in response, which will issue later. The letter is dated 19 April and addressed to me. It reads:

Dear Chairman

Thank you for forwarding copies of the Committee's report of its examination of the sale of Project Eagle. Whilst there are a number of opinions in the report with which we strongly disagree, I do not wish to rehearse again the various arguments and counter-arguments which have been well aired at this stage. I do, however, wish to draw your attention to two material errors in the Committee's report.

First, the Committee states as its opinion that the NAMA Board was not explicitly informed of the extent of the financial loss that would be recorded in NAMA's accounts as a result of setting the Project Eagle minimum reserve price at £1.3 billion (Paragraphs C.9 and 144 of the report). I wish to point out that this was unequivocally refuted by a former member of the Board at the PAC's hearing on 17 November 2016 when Mr John Corrigan stated that "when we decided to set the minimum price of £1.3 billion, we were conscious that there was a probability that there could be a loss of up to £180 million, that is to say, the difference between the reserve price and the carrying value of those assets in the balance sheet".

Second, the Committee is of the opinion (Paragraphs C.26 and 208) that the Board was not informed of the meeting held between NAMA representatives and Cerberus on 31 March 2014. This is incorrect: a number of Board members recall that they were so informed - this is clear from the testimony of Mr Oliver Ellingham and Mr Willie Soffe to the PAC on 18 October 2016.

Yours sincerely

Frank Daly

I would like to make a brief response and we will not try not to labour this for too long. It was our opinion that the board members were not explicitly informed of the extent of the financial loss.

While Mr. Corrigan may have been conscious that there could have been a loss of up to £180 million, he did not say that all board members were explicitly informed of the matter. Regarding what he said in the conclusion that the size of the loss implied that it would have been made clear to all board members, we were not provided with evidence that this statement had been made, despite several board members being present. If we accept for a moment that it was the case that they were aware of the probability of a loss of £180 million, why has NAMA argued so vehemently against the Comptroller and Auditor General's conclusion that the decision to sell the loans at a minimum price of £1.3 billion involves a significant probable loss of up to £190 million? It simply makes no sense.

NAMA's defence was that they were not informed specifically of the extent of the financial loss of setting the price at £1.3 billion, which actually would have reflected a loss of £173 million. We refer to the loss in our financial statement. Mr. Daly is now saying that the board was made aware of a probable loss of up to £180 million. Why, in God's name, did they spend several months attacking the Comptroller and Auditor General for suggesting that there was a probable loss of up to £190 million? His defence against the PAC is to say that the Comptroller and Auditor General was right. That is essentially it.

I want to move on to the second matter, which is even more puzzling. As regards the chairman of NAMA's point about not informing the board about the meeting with Cerberus, we wrote specifically to NAMA at my request on 13 December 2016 on this matter. We asked NAMA:

Please give us the details of any and all recorded responses, if available, of each of the NAMA board members when they were informed during the board meeting on 3 April regarding the meetings between the Chairman and the Chief Executive and Cerberus on the day before the bids closed. If this was not communicated to the board members provide a note for why this was the case.

That was in our letter to NAMA. On 22 December 2016, NAMA replied to the committee. The reply is on our website. It responded to the committee as follows: "As is evident from the minutes of the NAMA Board meetings, the meeting with Cerberus was not discussed at Board level as Project Eagle was not discussed at the meeting with Cerberus". Therefore, his response to the committee to say that the members were informed is 100% contradicted by NAMA's own letter to us on 22 December when it said that the matter was not discussed at board level. NAMA's response to our letter is a flat contradiction of its written evidence to this committee on 22 December 2016. We are going to issue a statement to that effect. We will send both documents off to the commission for whenever it reports.