Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

It is curious that we are having this debate today. The only conclusion I can draw is that we are being softened up for a roll-back, which would be totally unacceptable. The way in which NAMA was set up, and the secrecy surrounding it, always opened it up to the prospect of an inquiry. I listened to Deputy Burton who said she did not support the establishment of NAMA. However, the last Government had a gigantic majority and could have changed the way NAMA did its business in a much more open and transparent way. Right through the last Dáil's term, however, it did not take that opportunity.

Part of our problem is the way we do things which ends up with us having to hold inquiries because there is absolute nonsense about secrecy and not answering questions. That goes to the heart of some of the problems we have.

I am a member of the Committee of Public Accounts and during one hearing some additional information came to light following questions about bank assets and ownership of assets and loans. I had major concerns about Project Eagle which is the subject matter of that report. As has been said several times, it is a value-for-money report, not an inquiry.

Deputy Wallace has drawn attention to one of the things that came to light and I wish to expand on it. As regards some of the individuals I have spoken to since, because of their professional standing and background, they have the competence to raise serious points that need to be inquired into or fully investigated and responded to.

I want to read some parts of a document I got that will explain what is meant by that:

It appears that Bank of Ireland has delayed the recognition of losses with the financial position of Bank of Ireland being portrayed incorrectly when the bank drew down emergency funding from the Irish Central Bank-ECB. In an effort to delay the recognition of losses, Bank of Ireland relied on the International Accountancy Standards Board, IASB, rules. The particular rules in question, IAS 39 and IFRS 9, only apply to published accounts. However, IASB is a private entity and company law supersedes IASB. In 2010, the then governor of the Irish Central Bank, Patrick Honohan, raised concerns that Irish banks were delaying the recognition of losses, and the problems it was causing from a regulatory perspective. In addition, it appears that the financial position of Bank of Ireland was not portrayed correctly in accordance with the Chartered Accountants Regulatory Board, CARB, when the bank drew down its funds from the Irish Central Bank-ECB. NAMA claimed to have acquired approximately €10 billion in assets from Bank of Ireland in 2010. Some of these assets were sold by NAMA to Cerberus, but Bank of Ireland appears to have portrayed ownership of these assets when the assets were, in fact, owned by the Irish Central Bank-ECB by virtue of the aforementioned company law rules. In the Bank of Ireland's interim accounts 2011, page 100, it states that the ownership of the assets would be de-recognised when substantially all the risk and rewards of the ownership have been transferred to NAMA. This would only occur when the ownership of beneficial interests was legally transferred to NAMA. As such, the situation is that NAMA stated it had acquired assets from Bank of Ireland when according to research and company law they were not Bank of Ireland's to sell.

This is what the people I have been talking to said. That is simply because the Irish Central Bank and the ECB were the legal and beneficial owners of the collateral, the loans and all related security. On top of that, Bank of Ireland claimed to recognise the risk and rewards of ownership in accordance with accounting standards after they had supposedly been acquired by NAMA. Not only does that not comply with company law, it also does not comply with CARB. In essence, it appears the Bank of Ireland portrayed itself to shareholders and investors as the owner of assets of €35 billion when it did not in fact own them either legally or beneficially. In an investors' report issued in 2010, Bank of Ireland claimed its property and construction loan book assets totalled €35 billion, something which was also not portrayed in accordance with CARB. It goes on in some detail and I will provide it to the Department of Finance.

We need to have that clarified. It needs to be clarified by people who have the competence and professional capacity to give a proper judgment. In essence, Wilbur Ross, President Trump's incoming but not yet finally approved commerce secretary and his hedge fund partners acquired 35% of the Irish Government's stake of Bank of Ireland for a knock-down price of 10 cent as opposed to 24 cent. The Irish bank let go of a huge chunk of Bank of Ireland at the bottom of the market which, on the face of it, was baffling to many. Ross went on to make hundreds of millions from that transaction which the Minister for Finance, Deputy Noonan, lauded. Bank of Ireland still exists but the dubious accountancy practices fed vultures and profiteers through the sale of assets through the back door of NAMA. The establishment of a commission of investigation is fully warranted.

I want to come back on some of the points Deputy Boyd Barrett made on the document he received. I also received it last Friday. As Joe Higgins said in a previous Dáil, writing to the Central Bank is like hitting a sliotar at a haystack. We wrote to the Central Bank from the PAC asking if the rules were properly applied in relation to the issue I mentioned. We received a gobbledegook reply that did not answer the question and elongated the information. That is part of the culture we have to stop. There are key questions in the document we were sent. I want to pose them and I want a reply. Given the controversy that surrounded the original deal with Treasury Holdings in 1998, why did the board of CIE agree in March 2013 to extend the term of 1998 MDA with the NAMA appointed receiver when the term was coming to an end and the land would have reverted back to CIE unencumbered? Why did CIE not take the site back unencumbered and offer it for sale on the open market where it could have achieved €150 million? It is not as if this company does not need money or that public finances would not have benefitted from that. Why did the joint receiver of NAMA agree to dispose of the sale agreement to Johnny Ronan who is a connected party under section 173 of the NAMA Act and why did the joint receiver and NAMA agree to dispose of the interest in the site to an individual who had cost the taxpayer in the region of €2.7 billion? Those are some of the questions posed in this document and we are entitled to have a reply to them.

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