Developer O'Flynn rejects Nama guarantee comments

 

CORK PROPERTY developer Michael O’Flynn has written to the Public Accounts Committee and the National Asset Management Agency rejecting comments made by its chief executive last week that the top 10 borrowers have personal guarantees on their loans.

Brendan McDonagh, chief executive of Nama, repeated previous comments at the committee’s hearing last week that each borrower in the first tranche transferred to the agency had offered some form of personal guarantee.

Mr O’Flynn, chairman and managing director of the O’Flynn Group, wrote to the committee last Friday confirming his group was one of the first 10 borrowers whose loans were transferred to Nama in tranche one.

However, he denied in his letter to the committee’s chairman, Fine Gael TD Bernard Allen, that personal guarantee were given on the bank loans of the group.

“It has also been published in the print and broadcast media on a number of occasions that the bank loans of the O’Flynn Group are not in any way supported by personal guarantees,” Mr O’Flynn wrote.

“I want to confirm to the committee that this is the correct position.

“I would be obliged if you to bring this matter to the attention of the committee so that the record can be clarified.”

He concluded that he had also written to Mr McDonagh on the matter.

Mr Allen said he had written to Mr McDonagh to see if he wished to respond to Mr O’Flynn and, if necessary, to correct the record on his comments on the guarantees.

A spokesman for Nama said it never disclosed the names of any of the borrowers or companies it engages with and declined to discuss specific cases yesterday.

“Nevertheless, Mr McDonagh chose his words carefully when addressing the committee on this issue and he stands over those comments now,” the spokesman said.

“If the committee writes to Mr McDonagh on the matter, then he will, of course, engage with them on the matter insofar as he can.”

Many developers agreed to provide personal guarantees as security to their banks to secure loans. The practice was common at Anglo Irish Bank, a significant lender to Mr O’Flynn’s group, though he has consistently maintained he has no such guarantees.

Nama acquired loans from the banks with personal guarantees, but assigned no value to them when determining the discount it applied on the purchase of the loans.

Personal guarantees have led to multimillion euro judgments being secured by the banks against property developers in the courts.