Being in Nama was regarded as a stigma in the UK, developer Michael O’Flynn said on Friday in court under examination, adding that it complicated his ability to do business there.
Mr O’Flynn’s evidence came to light as part of litigation involving several companies in the O’Flynn group which are suing former employees Patrick Cox, Liam Foley, Eoghan Kearney and others saying they made €12.5 million profit on a student accommodation project on Gardiner Street in Dublin at the business’s expense
The defendants deny the claims.
Responding to questioning from Paul Gardiner SC, for the defence, Mr O’Flynn said that in the aftermath of the financial crash he decided to stay with the construction group given the scale of his commitment to it.
“Unfortunately, being in Nama was a stigma in the UK. It was hardly a stigma in Ireland because anybody with any property was in Nama,” he said.
Mr O’Flynn said Nama, which had taken over the group’s €1.8 billion in loans, had in 2010 rejected his 2,500-page business plan for paying off the debt. That same year, a new separate company called Victoria Hall Management Ltd (VHML) was set up to do business in England.
He said John Nesbitt, his long time business friend, director and minority shareholder in the group, became the sole shareholder in VHML after the Nama rejection.He said it was left to Mr Nesbitt because there was a stigma in the UK for people who were in Nama and this complicated their ability to deal with investors.
The plaintiff maintains that Mr Cox began working on the Gardiner Street plan while the business still employed him in March 2014, and continued to do so up until his departure in August 2015. Mr Foley, who was construction director of several O’Flynn companies, left the group in 2013 while Mr Kearney, an accountant, departed in 2011.
Mr O’Flynn disagreed in the High Court that Mr Cox functioned outside the O’Flynn group structure when he started working as a investment manager in 2010. He also disagreed with Mr Gardiner that as Mr Cox, whose contract granted him a basic gross salary of €75,000 per year, was working for VHML in England, he was specifically working outside the (O’Flynn group) structure.
Mr O’Flynn said while VHML was a separate structure, Mr Cox “would have been working for a company associated with other companies in the group”.
He took exception to what he said were Mr Gardiner’s repeated suggestions there was something wrong with setting up the separate VHML structure. As someone with no personal debts, he was quite entitled to do what he did in relation to VHML and there “was absolutely nothing wrong with it”.
The case continues.