NAMA defends debtor builders’ €200k

THE National Asset Management Agency has defended its decision to sanction salaries of up to €200,000 for developers who owe in excess of €1 billion to taxpayers.

Top executives at NAMA yesterday defended the salaries on the basis that developers were best-placed to recover the maximum amount of debt owed to the state.

During questioning by the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, it was also revealed that NAMA:

nWould shortly initiate High Court actions against several developers who had transferred assets to spouses.

nWas close to reaching agreement with the three main banks to introduce a deferred payments scheme for buyers of the 2,000 houses NAMA controls.

nHad acquired 11,500 loans worth €72.3bn from 850 individual debtors at a cost of €30.5bn and that 12 of these individuals had debts in excess of €1bn.

nWas finding it difficult to find individual buyers for 8,000 apartments.

On the salary issue, NAMA chairman Frank Daly said payments of €200,000 for indebted developers were only approved in exceptional cases and the majority of developers whose loans are controlled by NAMA were allowed average salaries of between €75,000 and €100,000.

Mr Daly said the alternative in some cases would be to appoint receivers who would charge “exorbitant” fees of up to €180 per hour. He said the decision to approve such salaries was “a realistic commercial decision” as billions of taxpayers’ money was at stake.

Mr Daly also defended its decision to allow developers to retain a percentage of any money recovered in excess of what NAMA had paid to acquire their original loans.

“I find it as unpalatable as anyone,” said Mr Daly, but he stressed NAMA’s decisions were based on achieving the maximum possible return for taxpayers.

Fianna Fáil TD Michael McGrath said such an arrangement appeared to run contrary to NAMA’s claims that it was not operating a bailout for builders.

NAMA officials also conceded that while its official policy was still to chase debtors for the full amount owed to the state, it was unrealistic to think that a large amount of debt would not have to be written off at some point in the future.

“At some stage, it will prove uneconomical to pursue them any more,” said Mr Daly, but he remained confident that NAMA would probably end up making a profit.

NAMA chief executive Brendan McDonagh revealed that it would shortly initiate High Court actions against several developers who had transferred assets to their spouses in an effort to take them out of the reach of the state agency.

He said NAMA was also close to reaching an agreement with the three main banks to introduce a deferred payments scheme to kick-start the property market.

Mr McDonagh said that NAMA was also looking at selling entire apartment blocks to foreign investors as the agency was struggling to find individual buyers for the 8,000 apartments under its control.