Irish Nationwide signals move against at least one other developer

IRISH NATIONWIDE has signalled it intends to move against at least one other well-known property developer as the Government’s plans to establish the State’s “bad bank” Nama advanced a step.

The Cabinet yesterday approved the draft outline of the legislation to establish the State’s “bad bank” Nama, paving the way for the full legislation to be drafted and published in late July. The Dáil is expected to be recalled in early September to debate and pass the legislation.

The plans to establish Nama continued apace as Irish Nationwide prepares to take further action against more property developers who are in default on their loans.

The building society indicated to staff at briefings in recent weeks that it intended to take legal action against at least two developers in a move interpreted as a proactive step by Irish Nationwide to call in large outstanding property loans.

One of the developers is Liam Carroll, who is the subject of a legal action taken by Irish Nationwide on Monday to recover €60 million from the Dublin businessman.

Danny Kitchen, chairman of Irish Nationwide, signalled the building society’s planned legal actions at the staff briefings.

The move was interpreted as a new departure by the building society and a break from the previous management led by former chief executive Michael Fingleton.

It’s understood the Government-appointed directors at Irish Nationwide – Rory O’Ferrall and Adrian Kearns – have been kept informed of the building society’s plans to sue Mr Carroll, one of the State’s largest property developers.

The building society had no comment on the two directors’ advance knowledge of the case.

Irish Nationwide’s case, which came before the Commercial Court on Monday, could complicate plans for Nama, which will acquire soured development loans from the six Irish-guaranteed banks and building societies.

Mr Carroll, whose bank borrowings are estimated to be close to €2 billion, is likely to be one of the first property developers to be handled by Nama as the agency plans to assume control of the top 50 developer borrowers initially. AIB and Bank of Scotland (Ireland) – it falls outside the bank guarantee – are Mr Carroll’s main lenders.

The Nama legislation is expected to leave the foreign-owned banks eligible to join to comply with EU competition rules, but the conditions are likely to deter any participation by overseas banks with Irish subsidiaries.