The Department of Finance is sceptical of a report by the Comptroller and Auditor General (C&AG) that Nama could have made up to €29 million extra on a controversial land sale.
The watchdog’s report said that “errors and poor analysis” had led to the property portfolio being sold for less than half of what its target price should have been.
However, a department submission for the Minister for Finance Paschal Donohoe said it was "almost impossible" to say how much the sale could have yielded.
A note from Des Carville, head of the shareholding and financial advisory division, said: "Minister/Secretary General, this is a complicated transaction with various moving parts.
“However, in aggregate, Nama achieved a price well in excess of its internal target and significantly ahead of the initial acquisition price [even when the loan classification errors are taken into account].
“It is almost impossible to prove/disprove the counterfactual around what might have been achieved if the internal errors were corrected, up-to-date valuations were obtained and the loans were openly marketed.”
Mr Carville said it was “ironic” that issues around the sale had actually been raised because of allegations that Nama had breached rules surrounding the buyer to whom it was sold.
The properties, which were linked to Quinlan Private, the property investment group of Derek Quinlan, were sold off market for €27 million to equity group Clairvue Capital in 2012.
Nama made a loss on the price it paid of more than €10 million and was unaware that Mark Donnelly, a director of Avestus Capital (which took over Quinlan Private in 2010), was also a director of the Luxembourg unit of Clairvue.
Des Carville told Mr Donohoe: “Perhaps ironically, the main issue of controversy was around the section 172 declarations from the purchaser and the C&AG found no reason to believe there was any infringement of section 172.”
The report had found no evidence to support claims that Nama had breached the law, which under section 172 of the Nama Act prohibits the asset management agency from selling loans back to a borrower.
In the submission, the Minister was told that Nama also disputed the suggestion it had failed to achieve the best financial outcome on the sale.
The properties at the centre of the C&AG report were part of a bigger portfolio of loans being acquired by Nama from Avestus in 2010.
The submission said: “Nama generated cash of €208 million in total from the connection [the wider portfolio], well in excess of both the original payment target and the revised/corrected payment target.”
Records obtained under Freedom of Information also show how the Department of Finance waited until as late as possible before publication of the report.
The C&AG had sent the report to Mr Donohoe on December 23rd last year and posted a note on its website confirming that in mid-January.
A submission for Mr Donohoe explained the report had to be published within 90 days of receipt, no later than March 20th.
In an internal email on February 19th, a department official wrote to the C&AG saying: "Would you be free for a short call sometime later today or tomorrow? I just want to update you on where we are with the publication of the Project Nantes report."
However, the report emerged publicly only one day before the deadline on March 19th.
In a statement, a spokesman for the department said it remained its position that it was “almost impossible to prove/disprove the counterfactual” of how much the Project Nantes sale could have achieved.
He said: “The C&AG report concluded that ‘there is no evidence of a breach of [the section 172] requirements’. This was a source of significant concern when complaints about the transaction arose.”