TD pursues call for probe into banks over NAMA loans

A FIANNA FAIL TD has written to the Garda Commissioner, the Director of Corporate Enforcement, and the Financial Regulator calling on them to investigate banks for misleading NAMA.

The move follows a meeting of the Oireachtas Public Accounts Committee (PAC) on Thursday at which NAMA bosses said they had been given “misleading” information by banks on the value of their loans.

The PAC decided to write a letter to the Financial Regulator asking him to investigate the matter.

Committee member Michael McGrath, a Cork Fianna Fáil TD, said he was taking further action on his own behalf: “I am writing today to the Garda Commissioner, the Office of the Director of Corporate Enforcement and the Financial Regulator. I am asking each, along with NAMA, to open up a probe into claims (agreed with by NAMA) that false and misleading information was given to NAMA.”

He said this information by banks “inflated” the value of the loans. He said it was up to the relevant authorities to determine if any laws were broken.

“There is a raft of legislation open to them that they can use. It is for them to identify specific breaches, if any.”

He said he had “no doubt” that, if banks deliberately provided false information to get the maximum price for their loans, laws would have been broken. “The evidence is clear that the picture painted by banks on the loan book was entirely different to NAMA’s analysis. That gulf between what the banks said and NAMA found has to be investigated.”

At the PAC, Mr McGrath said “there was a clear systemic pattern” to the false information provided to NAMA over the status of €77 billion in loans they were taking over from the banks.

NAMA chief executive Brendan McDonagh said he “didn’t disagree” with Mr McGrath’s assertions. He said the Financial Regulator was the appropriate authority to investigate the matter. While the banks submitted documentation claiming that 40% of the loans were performing, only 25% were actually performing. In addition, many of the loans were not backed by security.

Due to what NAMA chairman Frank Daly described as “misleading” information by the banks, the “hair-cut” or write-down on the value paid for the loans by NAMA grew from an expected 30% to 58%.