Seán Fleming (Laois, Fianna Fail) | Oireachtas source

On the Deputy's point about the overall clinical negligence issue on the other claims, the last meeting was the first time we got beyond the €2 billion figure that is out in cyberspace, so to speak. We have begun to break it down and we asked for very detailed specific information, not down to identifying people. Quite a bit of information will come to us, more than anybody in the public arena has seen previously, which is very important. That is an issue to which we will certainly return and deal with in depth.

The next item is 1706Bfrom Mr. Paddy O'Keeffe, Tax Appeals Commission, dated 7 November 2018, providing an update requested by the committee on high value appeals. We mentioned the large number of high value appeals. If people want to raise it with the Revenue witnesses today, they are free to do so. We will note and publish that.

No. 1707B is from Mr. Ray Mitchell, dated 8 November 2018, providing a briefing note in regard to circulars in the context of the regularisation process provided for in a HSE circular regarding the regularisation of acting posts in conjunction with the new arrangements for the filling of short-term posts and the reintroduction of senior staff nurse positions. Essentially, some people felt that while the HSE said it sent out the circular and the information to the different heads of the organisation, many people on the ground are saying that it never worked its way down to that level. This letter makes that clear and we note and publish this and send it back to the correspondent who raised this matter with us in the first place and to let staff who are still aggrieved in relation to the process know that there is no cost to putting in a claim and there is a grievance procedure in this matter which is outlined in section 4 of that briefing note.

No. 1711B is from Ms Mary Lawlor, communications and public affairs manager with NAMA, providing further details requested by the committee on Project Nantes. I propose we send a copy of this to Deputy Wallace who raised the matter and on whose suggestion I also raised the matter here. I will read that letter because it is interesting and gives a broader perspective on the matter. I will skip a sentence or two because it is so big but because of the amount of money involved and the controversy I will respond on this because there was an article on this issue in the Sunday newspapers as well. The letter reads as follows:

I refer to your letter dated 23 October 2018 in which you requested additional information regarding Project Nantes.

As regards the first and second queries raised in the letter, NAMA wishes to point out that Project Nantes was only one of a number of separate transactions involving the debtor connection. Overall, the connection’s par debt was €489 million on acquisition by NAMA. This included some €260 million of debt categorised as equity-backed loans which had been advanced to the connection by the participating institutions i.e. these loans were secured not by property collateral but by intangible assets (such as personal guarantees) which had no tangible value. NAMA did not pay the participating institutions any consideration for these €260 million equity-backed loans. Thus, only €229 million of the €489 million par debt acquired was secured by tangible property assets with a realisable market value.

That is important because it means that in relation to this particular person, the amount of loans that NAMA took over was €489 million - €229 million of that amount was secured by property and the other €260 million was only secured by way of a personal guarantee and because the personal guarantee was not tangible, NAMA paid zero for that €260 million. It is important to put it out there that NAMA did not pay for a considerable amount of the €489 million because it only effectively paid for a portion of the €229 million. That said, the taxpayer was caught in the hoop for all of it because we bailed out the banks for the shortfall. NAMA might say that its side of it is clear but the taxpayer was caught for 100% of that unsecured loan because the banks had to receive funding as a result of that. The letter continues with the following:

The debtor connection agreed to initiate a programme of asset sales and debt refinancing so as to maximise recovery for NAMA ... Ultimately, total proceeds of approximately €200 million were realised from loan, property and other loan security realisations. As part of the disposal programme, a loan sale of debt with a par value of €352 million, designated Project Nantes, realised proceeds of €26.6 million. This transaction included €241 million (€260 million at acquisition) in equity-backed loans (for which NAMA had not paid consideration) and €111 million par debt secured by assets. Therefore, the €26.6 million realised for Project Nantes related to par debt loans of €111 million (part of the original acquired property-secured par debt of €229 million).

Thus, in total, proceeds of approximately €200 million were realised from the asset sales and loan sale/refinancing, equating to a recovery of 87% of the original acquired property-secured par debt of €229 million. The proceeds realised were well in excess of the recovery target set by NAMA for the connection and the acquisition value paid by NAMA to the participating institutions.

As regards the third query raised in the Committee’s letter, I can advise that NAMA has been investigating this matter. As part of this, NAMA undertook a review of the written confirmations and warranties in respect of section 172(3) of the NAMA Act 2009, which were provided by the borrowers and purchaser at the time of the loan sale in 2012. These confirm that the borrower and purchaser were compliant with the requirements of section 172(3) of the NAMA Act 2009. Following enquiries raised by NAMA, it has been established that the party who has been identified as a director of the purchaser entity was not a NAMA debtor.

Maybe there was another connection with a NAMA debtor but the letter says that the person was not a NAMA debtor so there is wiggle room there. The letter continues with the following:

NAMA wishes to be helpful to the Committee but is required by law to operate by reference to the prohibitions on disclosure of confidential debtor information.

Essentially it cannot say more. There is some information there but there is still some wiggle room in there. Some people are interested in that and I read it into the record because it is big money, it is a matter people are concerned about and it has attracted much public comment.

We note and publish that letter. Is that agreed? Agreed.