Ciarán Cannon (Galway East, Fine Gael)

I am replying to this Topical Issue Debate on behalf of my colleague, the Minister for Finance, Deputy Michael Noonan.

Reports in the media suggest that due to its assets having been frozen by NAMA, the employees of the Vita Cortex plant in Cork are being deprived of redundancy payments. In particular, it is reported that NAMA has control over a company bank account with cash assets of €2.5 million from which redundancy could be paid. However, it is important we appreciate the full facts in this case. I emphasise there are important issues of client confidentiality that need to be respected in discussing this issue. NAMA is precluded, under sections 99 and 202 of the NAMA Act 2009, from disclosing confidential information relating to debtors. I am, therefore, limited as to what I can say about this case.

I understand from NAMA that the company in question is one of a group of companies owned by a NAMA debtor who, on 16 September 2011, announced his intention to close the Cork plant as part of the reorganisation of Vita Cortex. This involved the amalgamation of the Cork-based production into the Athlone and Belfast plants. I have been informed by NAMA that the company which is being closed down by its owner has no borrowings that are NAMA-controlled.

I am also informed by NAMA that the employees being made redundant are employed by Vita Cortex Industrial Limited, VCIL, which is not a NAMA debtor. The money referred to in media reports represents part-security that NAMA has for a loan in respect of other companies which are NAMA debtors. In these circumstances, therefore, any suggestion that NAMA should release cash from this account so that the liabilities of another non-NAMA company should be discharged seems inappropriate.

There is a redundancy payments scheme in operation, the purpose of which is to compensate workers, under the Redundancy Payments Acts 1967 to 2007, for the loss of their jobs by reason of redundancy. Statutory redundancy lump sums are generally paid by the employer who is then entitled to a rebate from the State of 60% of the relevant amount. Rebates to employers and lump sums paid directly to employees are paid from the social insurance fund.

NAMA would suggest it is more the responsibility of the company's owner to make these payments from his own resources rather than ask NAMA to effectively make redundancy payments on his behalf by releasing security on unconnected loans. If the security for this loan was a plot of land there would be no question of the debtor seeking to get NAMA to pay the costs of his business.

Although the topic for debate relates to a particular issue, it is also worth pointing out that NAMA has assured the Minister for Finance it is committed to contributing to the purposes of the National Asset Management Agency Act 2009 which, inter alia, require it to contribute to the social and economic development of the State, in addition to protecting the interests of the taxpayer by ensuring that the value of any assets securing its loans is not diminished. In this context, NAMA assures the Minister it is a particular priority for NAMA, where possible, to minimise the adverse impact on the viability of any of businesses affected, or on the sustainability of any jobs that may be at stake. NAMA fully recognises the importance of ensuring the continued viability of businesses which can generate cash flow to repay debt and provide sustainable employment. However, NAMA cannot be held responsible for the liabilities of companies over which it has no control or with which it has no formal relationship.

NAMA was not established to settle disputes or to adjudicate on the rights and wrongs in these cases. Such a role is beyond the functions of NAMA as set out in statute in the National Assets Management Agency Act 2009. The prime function of NAMA is to manage acquired loans efficiently, effectively and expeditiously, and in the best interests of the State. In doing so it aims to attain the best achievable financial return on behalf of the taxpayer, subject to acceptable financial risk.

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