Big profits for NAMA firm investors
Bondholders will be given control of NAMA under the “shadowy” new set up, opposition parties warned as the move sparked fierce clashes in the Dáil.
Finance Minister Brian Lenihan insisted he was setting up the new firm — known as a Special Purpose Vehicle (SPV) — to run NAMA in order to get around EU rules and avoid the €54bn used to buy bad property deals from being included in the national debt.
Labour’s Finance spokeswoman Joan Burton expressed outrage at private investors whom she referred to as “spivs” being allowed to buy 51% of the SPV.
Ms Burton also questioned its legality and whether investors would use their power to halt NAMA bringing bankruptcy proceedings against “their developer friends”.
“This is extraordinary. Control will be given to a shadowy new company run by investors. This makes it clear that NAMA really is a bailout for developers and bankers and this move will mean we will never really know what is going on in NAMA,” she said.
Ms Burton added that the move meant the responsibility and liability for the €54bn debts would still sit with the state, but would be managed by private interests — a situation she compared to the shaky structure of US energy giant Enron before it collapsed.
Ms Burton also attacked the way the minister had revealed the SPV element so late and could still only give “sketchy” details about it.
The Labour spokeswoman warned the minister would have no power to claw back profits made by investors in the early years if the project went bust later on.
Fine Gael economics spokesman Kieran O’Donnell accused the minister of being deliberately “vague and illusive”, saying the minister could not explain what €51 million from private investors would be specifically used for and who they would be.
During heated Dáil exchanges on the issue, Mr Lenihan said he was working in the country’s best interest to ensure the national debt was not inflated, and he insisted the board of NAMA will hold a veto on the operations of the SPV through the “share-holding agreement”.
Labour also claimed that rejection of their amendments to the NAMA legislation, which would have given it a “social responsibility” aspect, made a mockery of Green Party claims they would bring such an element to the agency.
Under the scheme approved by the EU’s economic statistics agency Eurostat, NAMA will set up a “master SPV”, which will be 51% owned by private investors and 49% by NAMA.
It will have subscribed capital of €100m and private investors will be represented on its board.
