THE NATIONAL Asset Management Agency (Nama) has told property developer Johnny Ronan to stop making charity donations from his business to maximise the amount of money it recovers on the loans which it has acquired.
Details are contained in High Court records filed in the legal challenge taken against Nama by property investor Paddy McKillen, who is trying to stop the transfer of his loans into Nama.
Donations were made by a company owned by Mr Ronan and Mr McKillen. They also co-own the Treasury Building in Dublin, making them landlords of Nama, which is based in the building.
Mr McKillen claims in court filings that “Nama have indicated to my associates that all charity payments which are generally made from surplus rents will stop”.
Nama’s head of legal and tax, Aideen O’Reilly, said that Mr McKillen may have formed this view from correspondence between Nama and “a borrower who co-owns a building in Dublin with Mr McKillen”.
She said that this borrower’s loans were transferred to Nama in the first tranche of loans. The borrower was told by Nama that “any future charitable donations should not be funded out of the group cashflow”, she said.
The individual, who was not named by Nama but is understood to be Mr Ronan, was asked to consider reducing overheads and professional fees “in the context of meaningful debt repayment”.
A Nama spokesman had no comment on the matter, but on donations in general he said that the agency was “mandated to return the maximum amount to the taxpayer and that is our focus”.
Attorney General Paul Gallagher SC opened the defence case for Nama and the State yesterday.
He told the court that Mr McKillen was not entitled to any “special” treatment to prevent his €2.1 billion loans being transferred Nama.
Nama was introduced as part of the Government’s “unprecedented intervention” from the bank guarantee of September 2008 to support the financial system and economy but Mr McKillen failed to recognise this, said Mr Gallagher.
The State was seeking to deal with the problem at “a macro level” but Mr McKillen and his experts did not recognise the banks could not have financed his loans without State support, he argued.
The “writing was on the wall” when the draft Nama Bill in the summer of 2009 indicated what loans would be acquired but Mr McKillen had not moved to repay his loans at the Nama banks with loans from other lenders, he said.
The case continues today.