Richard Bruton (Dublin North Central, Fine Gael)

I move amendment No. 3:

In page 16, between lines 35 and 36, to insert the following:

"2.--Where NAMA proposes to establish a Special Purpose Vehicle to purchase, manage or dispose of assets, it shall do so only in accord with regulations published by the Minister and approved by the Oireachtas which shall include, but are not limited to:

(a) the suitability of investors,

(b) the suitability and behaviours of members of the Board,

(c) the finance, planning accountability and reporting,

(d) the manner in which the Special Purpose Vehicle shall discharge its functions under this Act,

(e) the method of determining the appropriateness of paying a dividend or bonus to investors, and

(f) its consistency with the statutory objectives of NAMA under this Act.".

This amendment seeks to put a legislative framework around the special purpose vehicle, SPV, that has arrived into this legislation without a great deal of advance notice. The special purpose vehicle is to be a company controlled by private interests which are to have a 51% interest in it. The investors in it are unknown at this stage. It will have all of the powers of acquiring, managing and disposing of the assets so it will be absolutely at the heart of the activity of NAMA. The concern of the House during Committee Stage was that while we are going to huge lengths to regulate the operation of NAMA and to set out the standards to which it should work and the reporting it should meet, we suddenly find that the action where big decisions will be made has moved offshore, so to speak. It will now not be in NAMA, which we have regulated to a great extent in this legislation, but the final decision will rest in this other body, the special purpose vehicle.

There was broad consensus on the Opposition side that this was an unsatisfactory and unacceptable way to proceed. The Minister on Committee Stage undertook that he would consult with the Attorney General and would come back with a decision of the Attorney General in regard to how he would regulate it. He has an amendment which offers some crumbs in regard to how it might be overseen. It is critical that we recognise the master special purpose vehicle in the legislation, define its role and consider what sort of investors would be suitable to take up this. Could it be the very same banks from which we are acquiring these assets that would have the final control over their purchase, management and disposal? That would seem unthinkable, yet there is nothing in the legislation to disbar it.

Equally, we need to understand the individuals who appear on this SPV board and who will be in a position of very great authority and influence. Again, we need to know if they are suitable persons to occupy this position and whether they have any interests other than the interests they put up in terms of the €51 million that is required of them, and whether they have any other interests that might constitute a conflict in carrying out the role of managing these assets or of deciding on their purchase, disposal and management. It is important that we would define who are appropriate people, how they should behave and what criteria they must meet in order to be acceptable as people who would play such a pivotal role in regard to an investment made by the State.

The Minister has also assured us that the SPV will at all times act only to discharge the functions and purposes of this Act. This seems to conflict with the Minister's note which he circulated last week which was to the effect that this body must have ultimate control and discretion in its activity and that the only purpose will be the public purpose, whereas it is to be a private vehicle, controlled privately with private investment moneys. There seems to be an underlying contradiction and the only way to reconcile that contradiction would be to set out in statute exactly how we are going to regulate the potential conflict between private investors seeking their own interest, or those private investors seeking to further other interests not directly represented on the board but which might be totally inimical to the purposes of this legislation.

Equally, we need to know and see that the finances, accounting and reporting of this body are in the public domain. It is vital that there is regulation and oversight of that, including the right of the Comptroller and Auditor General to be able to audit those books appropriately, to give assurance to the taxpayer that everything is being done in a way that would be proper.

A crucial issue is how dividends are to be paid. We understand from the Minister that a crucial condition is that the SPV will get a dividend only in years in which NAMA proves to be profitable. We need to have that spelled out. How does one define NAMA as proving to be profitable? Will there be a separate valuation every year of the assets that NAMA owns to find whether there is a profit being generated that year, and only if that revaluation of the assets achieves a certain result will the private investors get access to their dividend? We need to see the detail of that. We have only this flimsy note and the matter is not set out in detail. With regard to the assurances we have received that this private sector body can only get something akin to returns on a Government bond, again, this needs to be set out.

The Minister will probably assure us that the shareholder agreement will cover all of this. However, just minutes ago the Minister refused to provide the Oireachtas with an opportunity to oversee the shareholder agreement. It is vital that the shareholder agreement would be in the public domain and open to scrutiny by the Oireachtas - an Oireachtas properly empowered to scrutinise and understand the implications of these shareholder agreements.

The Minister presented this body as perfectly innocuous. There is generally a willingness to accept the Minister's assurance that this is being set up solely for a purpose of getting a certain treatment in the accounts. However, if it is that innocuous, the Minister should have no concerns about providing the legislative oversight that would be necessary to assure the Dáil. We also need assurances, when the Minister is gone and when NAMA perhaps seeks to alter the shareholder agreement at some subsequent opportunity, that this would be a public event and that there cannot be modifications in the shareholder agreement that have implications for the taxpayer and the public interest that are not subject to proper scrutiny and oversight.

The Minister was fulsome in offering assurances to the House on the last occasion that there was nothing suspect or underhand about this SPV and that it was purely fulfilling a model that was required by EUROSTAT and had been done elsewhere without damage. He needs to back up that with legislative provisions that would reassure the House that this is what will happen.

See this speech in context