Thursday, 22 November 2018
Ceisteanna - Questions - Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
NAMA Loans Sale
5. To ask the Minister for Finance his understanding of section 172 of the National Asset Management Agency Act 2009; if he is satisfied that in the case of a NAMA sale (details supplied) the interpretation of section 172 of the Act was correct; if questions have been raised by him regarding the application of section 172 in this particular case; if NAMA has sought to clarify its interpretation of section 172 as it applied in this case; and if he will make a statement on the matter. [48727/18]
In the case of NAMA's sale of Project Nantes is the Minister satisfied that the interpretation of section 172 of the NAMA Act was correct? Were questions raised with the Department of Finance? Did NAMA engage with the Department on the interpretation in this particular case?
Section 172(3) of the National Asset Management Agency Act 2009 is a legal provision preventing assets held as security for loans acquired by NAMA from being sold back to defaulting debtors or persons acting on behalf of defaulting debtors.
To ensure compliance with this section, I am advised that NAMA has a policy of obtaining written confirmation from purchasers of NAMA-secured assets which confirms that, among other things, the purchaser is not a party precluded from completing the purchase by virtue of section 172(3). I am advised that these section 172 confirmations are examined by NAMA during the later stages of a sales transaction.
Under section 7(2) of the NAMA Act, any person who intentionally, recklessly or through gross negligence provides false or inaccurate information to NAMA commits a crime. In addition, under section 6 of the Statutory Declarations Act 1938, it is a criminal offence for a declarant to make a declaration which is false or misleading.
The Deputy will be aware that section 9 of the NAMA Act provides that NAMA is independent in the performance of its functions and that I, as Minister, have no role in its commercial operations or decisions. It is not my role to become involved in the detail of NAMA’s work, nor do I have access to detailed information regarding the assets securing the loans sold as part of the Project Nantes loan sale, which NAMA is prohibited from disclosing as such detail is classified as confidential debtor information. I am therefore not in a position to comment on NAMA’s interpretation of section 172(3) for this or any other transaction.
When the NAMA Act was introduced was it not up to the Department to set out the criteria? If that is the case, why did it not happen? If it had happened, there would have been a separation. Is the Minister satisfied about the aspect of full disclosure? Surely the Minister or his officials have engaged with NAMA on the matter, given that it is controversial.
This is not about interfering in NAMA's commercial role, it is about the Minister satisfying himself that the Act is being applied properly. Was there any engagement between NAMA and the Department on this, either then or subsequently, to satisfy the Minister that there was no problem with the interpretation of the relevant section of the Act?
The Deputy is correct that the NAMA legislation lays out the objectives by which NAMA must ensure any transaction meets certain criteria. However, deeming whether the criteria are met is work for NAMA and it then has a relationship with the Comptroller and Auditor General on the oversight of its operations. That is where the key statutory oversight facility is. It is with the Comptroller and Auditor General. I will have to revert to the Deputy on the nature of correspondence or communication, if any, between my Department and NAMA but it will be in line with the relationship I described to her earlier. Furthermore, in relation to the application of section 172, I understand that NAMA has been engaged in correspondence with the Committee of Public Accounts and the Comptroller and Auditor General on this project. As part of this correspondence, NAMA has advised the committee that it undertook a review of the written confirmations and warranties received pursuant to this section in respect of the Project Nantes loan sale in 2012. NAMA advises that these written confirmations and warranties confirm that the borrower and purchaser were compliant with the requirements of the 2009 NAMA Act. NAMA also stated that following inquiries it had raised, it has been established that the party who has been identified as a director of the purchaser entity was not a NAMA debtor.
I have just come from the Committee of Public Accounts to ask this question and it has been something we engaged with there this morning. As such, I am aware of the role of the Comptroller and Auditor General and the committee in relation to this. The Minister said criminal convictions apply if there is a false disclosure. Is he aware of any criminal conviction having been secured for failure to adhere to that provision? There is quite a bit of anecdotal evidence - and I accept that it is anecdotal - that people are in possession of properties to which loans were attached who were former NAMA debtors and they were not the people who purchased them. I am aware of some of those instances and would be surprised if the Minister was not also aware of them.
I do not have the information available to me regarding criminal convictions or prosecutions but I can check to see what has occurred over the last number of years. As I have indicated to the Deputy and as she has recognised, the oversight relationship with NAMA, having regard to the performance of its commercial duties, is anchored in the work of the Comptroller and Auditor General. I have outlined to the Deputy the nature of the communication that has taken place from NAMA to the Committee of Public Accounts and the Comptroller and Auditor General and the assurances NAMA has provided to me on this matter. However, I note that it is now the subject of communication between NAMA and the Comptroller and Auditor General and it is ultimately the latter who will provide an evaluation of this transaction if there are any issues in relation to it.