Nama says allegations of information leaks ‘unfounded’

Senior figures from debt agency answering questions at Public Accounts Committee

Nama chairman Frank Daly. Photograph: Eric Luke/The Irish Times.

Nama chairman Frank Daly. Photograph: Eric Luke/The Irish Times.

Fri, Dec 20, 2013, 13:31

The chief executive of Nama has described as “unfounded” claims by one of the agency’s former portfolio managers that confidential information was passed to individuals outside the agency.

Appearing before the Public Accounts Committee this morning, in the wake of claims that confidential information relating to the borrowings of developer Paddy McKillen was passed to a named individual working for an outside firm, Nama chief executive Brendan McDonagh said “in relation to the allegations of which it has become aware, Nama is satisfied that they are unfounded”.

He said that, in the past 36 hours, Nama had requested its own internal auditors to review “all electronic communications between Mr Farrell and this third party”.

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“There is no evidence from the search to date that any information relating to Mr McKillen was transmitted electronically,” he said.

Mr McDonagh also said the organisation “utterly refutes” media reports that it engaged in a deliberate process of manipulating the valuation of property which was collateral for its acquired loans saying Nama did not set property valuations.

He said valuations were initially provided by a professional valuer commissioned by individual financial institutions after which point each valuation was reviewed by a second firm of independent valuers appointed by Nama .

In the event that there was a material difference between the bank’s submitted valuation and Nama’s, a further, third valuation was carried out by a different independent valuer and this was accepted by Nama, a process which he said was subject to extensive auditing.

“At no stage in this process did Nama itself determine property valuations,” he said.

“Any suggestion that the Nama valuation process resulted in a systematic undervaluation of acquired loans is thoroughly disproved by the fact that Nama has, to date, had to take a cumulative impairment provision of €3.6 billion on these loans, including an impairment provision of €1.5 billion in our first year of operation.”

Asked by TD Shane Ross why Nama had requested to come before the committee the chairman of Nama, Frank Daly said the organisation did not want to leave the allegations made against it “unchallenged and unchecked” adding that it felt that the PAC was the appropriate forum to address that.

He said that the board of Nama had the “utmost confidence in the robustness and propriety of the valuation process applied to loans” and said taxpayers needed to have “confidence in the integrity and the propriety” of the organisation.

In an opening statement, in which he robustly refuted the allegations being made against the organisation Mr Daly said: “I want it to be clearly understood that if this is a campaign designed to undermine us, Nama will not be intimidated, influenced or distracted by the efforts of whoever may be behind it”.

Representatives of Nama are before the PAC today along with officials from the Department of Finance including secretary general John Moran in the wake of allegations that former Nama portfolio managers leaked information on loan books and assets to outside companies.

Garda Commissioner Martin Callinan has appointed a senior officer to liaise with Nama to look into complaints, first raised by Fianna Fáil Seanad leader Darragh O’Brien.

Nama was set up at the height of the financial and economic crisis in 2009 to clean up the banks by buying property loans from the main Irish lenders at a discount.

It paid about €32 billion for the banks’ property loans as a whole, effectively making it the world’s biggest property management company, but the detail on individual loans was not released publicly.

The Public Accounts Committee has been told that a number of audits and reviews by officials in Ireland, Northern Ireland and in Europe have not identified any issue over valuations.

The committee has said Nama should be given an opportunity to answer claims that it manipulated the price paid to the banks for property loans with a paper value of more than €70 billion.

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