Inside the world of business
Nama no slouch in the PR stakes
YOU’VE GOT to admire Nama’s nous when it comes to public relations and putting out good news before bad or certainly mixed news emerges from other quarters.
A day before the Comptroller and Auditor General delivers a negative diagnosis on Nama’s prospects for recovering the €32 billion it has borrowed to buy its loans, Nama chairman Frank Daly announced that the agency will invest at least €2 billion in half-built and new properties, creating (possibly) up to 35,000 new jobs.
The Comptroller’s report into how the agency is managing its loans contained interesting detail.
Of the €32 billion acquisition value of loans, Nama has €3 billion on hotels, including €1.3 billion in London, three times what it has in loans due on hotels in Dublin.
The bulk of the €4.2 billion of loans of undeveloped Irish land is in Dublin, or about €2.4 billion.
By the end of 2011 the agency had taken enforcement action against €4.2 billion of loans appointing an insolvency practitioner, while Nama had also appointed 408 insolvency practitioners in respect of 64 debtors. There were disposals of properties under way in relation to €4 billion of loans.
Out of 10 receiver files reviewed, the comptroller found fees ranging from €190,000 to €770,000 for 12-month appointments to borrowers.
The comptroller said three of Nama’s 194 staff work exclusively on searches for hidden assets.
Nama carried out nine trial asset searches in September 2011, costing €175,000 in total.
One search costing €75,000 uncovered assets including three properties in the US, four high-value vehicles and the transfer of an asset in Europe to a spouse.
A search costing €15,000 uncovered a property outside Europe, two strips of land in Leinster, links to six company shareholdings outside Europe and two racehorses.
The comptroller said the assets were insignificant in value terms so don’t expect Nama to be setting up stables at the back of the Treasury Building just yet.
De La Rue proves to be smart share performer
AN OBVIOUS hedge against the volatile bonds issued by the most indebted euro zone countries and financial stocks appears to be a UK company called De La Rue plc judging by the performance of its shares over the past year or so.
The company will not be known to many Irish investors but it is involved in the printing of banknotes, passports and driving licences. It offers other cash processing services and prints more than 150 national currencies, including that of South Sudan, one of its newest clients.
The share price is up 53 per cent over the past 18 months, so it seems investors see value in the company, though some of this has been driven by speculation that the 188-year-old firm could be a takeover target.
The company has an office in Swords, Co Dublin, though most of its Irish staff are engineers working out around the country.
The firm is not involved in currency printing in Ireland, so it is not working on the Punt Nua or whatever contingency currency that Patrick Honohan and his team at the Central Bank are or are not considering if the euro fails following a possible “Grexit”.
Only a small part of its revenues are made in Ireland, said a spokesman for the company.
Cantillon decided to ask the company whether the euro zone crisis would create more business. The spokesman said that the firm wouldn’t be getting into any speculation on whether it has been approached by the Irish or other European authorities on printing any new currencies.
Perhaps the firm has received no contact from the Central Bank because it is still too busy deciding whether to put a salmon or a deer on the new one punt coin, not that any such work is going on of course.
Devil in the detail in Bank of Ireland case
THERE WAS plenty of colourful detail in the case taken by Bank of Ireland against the former head of business banking in its British division, Syed Jaffery, and his associate, Pritpal Gill, who brought the banker into property deals backed by the bank without its prior consent.
The case involved six loans totalling £16 million (€20 million) from 2007 to 2010 and two possible loans of £13 million in 2010/11.
After a 21-day trial in the Royal Courts of Justice in London, a High Court judge ruled that Jaffery, who represented himself in the case, had breached his fiduciary duties and his contract, was deceitful and had accepted bribes.
The claims against the men were set against a backdrop of allegations made by Jaffery that the bank’s UK operations were a “sham bank” operated out of Dublin in breach of UK regulatory rules.
The case included anonymous memos detailing many allegations including the abuse of Six Nations, Champions League and Wimbledon tickets intended for customers but used by staff, their friends and families.
Jaffery painted himself as a whistleblower victimised by the bank. The judge decided that the “sham bank” allegation was “largely irrelevant” in determining the bank’s claims against the two men.
Bank of Ireland chief executive Richie Boucher featured. On November 6th 2007 Jaffery emailed Boucher to endorse a deal Gill was putting together for a property close to Buckingham Palace, adding that Gill’s family was “worth north of £100m”.
Boucher emailed back: “I will advise that our view of Mr Gill is that he is a very capable man, whom we are keen to support.”
Mr Justice Geoffrey Vos said the bank’s claim for dishonest assistance against Gill was successful and that a claim for bribery also succeeded against the two men in relation to one London property deal promised to Jaffery.
NEXT WEEK
Taoiseach Enda Kenny addresses American Chamber of commerce
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