Kieran O'Donnell (Limerick East, Fine Gael)

I suppose it is a form of cloning. This is extremely important. We still do not know who the shareholders will be. It is technically possible that the shareholders will be the banks to which we are giving €54 billion, in effect. The Minister should make no mistake about the fact that we are bailing out the banks by giving them major breathing time. We are taking toxic loans off the balance sheets of the same banks that are putting pressure on householders who are under severe pressure with their mortgages. The protocol or code of conduct that is in place will assist home owners until February, but they are accountable to the banks nonetheless. The Minister needs to provide guarantees in this area. I cannot see how that can be done if it is not enshrined in legislation.

I suggest that amendment No. 4, which is straightforward, will protect the Minister and the taxpayer when the SPV is being established. Amendment No. 3 proposes that regulations be drawn up to cover "the suitability of investors", thereby ensuring that we do not give taxpayers' money to the same banks. The amendment refers to "the suitability and behaviors of members of the Board" because we do not know who the members of the board will be. What input will the Minister have into the private investors' process of appointing people to the board?

Reference is made in the amendment to "the finance, planning accountability and reporting" of the SPV because such matters are critical. I welcome the Minister's amendment, which will provide for quarterly reports. I would like to know whether those reports will be audited. Will the term "draft" be applied to the reports? It is extremely important that the information we receive should be valuable. I do not doubt that one of the reasons the business plan is a draft plan is that no auditor would sign off on it. One could not sign off on those draft plans. It is critical that the information we are getting stands up to proper scrutiny.

Amendment No. 3 also proposes the drawing up of regulations dealing with "the manner in which the Special Purpose Vehicle shall discharge its functions under this Act". There is no mention of how exactly the SPV will discharge its responsibility to achieve value for money on behalf of taxpayers. The amendment also refers to "the method of determining the appropriateness of paying a dividend or bonus to investors". Although one of the Minister's documents stated that "the profits earned by the SPV will be distributed to the shareholders according to the following arrangement", we have no idea exactly how they will be calculated. The document also stated that the private equity investors, like NAMA, will be entitled to "receive an annual dividend linked to the performance [and profitability] of the Master SPV" and taking account of all direct and indirect costs. How does one define performance and profitability? These are critical issues as we try to protect the interests of the taxpayer. The document also states that "on winding up the Master SPV, the equity investors will only be repaid their capital if the Master SPV has the resources; they will receive a further equity bonus of 10% of the capital [up to a maximum of €5 billion] if the Master SPV makes a profit". These liquid investments will be tied up for up to ten years, but we still do not know the duration of NAMA. We know from the business plan that the Minister has indicated that it will last for ten years, but we still do not have any idea of the length of all the loans going into NAMA. It is clear that all the loans will be dealt with under NAMA within a ten-year period. That presupposes the Minister will securitise the debt in NAMA at some level. Will the SPV be doing this?

The Minister stated all citizens are equal and I agree with him. If all citizens are equal, they should have the same entitlements as the private investor. The private investors will have proper reporting requirements. The taxpayer is entitled to have his interests in respect of how the SPV will work protected legislatively by the Minister. The SPV will effectively be carrying out the daily operations of NAMA.

The Minister will have a veto over decisions made by the board. Day-to-day operations will be dealt with by the CEO of the SPV but we still do not know who this will be. It is not mentioned anywhere in the legislation. The Minister should correct me if I am incorrect in stating there is no reference to the CEO of a group entity. I see only a reference to the "Chief Executive Officer of NAMA". Will the Minister clarify this?

Effectively the SPV has changed the whole face of NAMA. There is a strong case for renaming the Bill the "National Asset Management Agency and Special Purpose Vehicle Bill 2009".

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