Peter Bacon, who was tasked by Brian Lenihan, then finance minister, to recommend a solution to the banking sector’s solvency and liquidity crisis, warned the agency needed a change of direction.
He said its emphasis on turning an “accounting profit” was “meaningless” as it had taken properties off the hands of banks and developers at rock-bottom prices in the first place.
Mr Bacon questioned why the agency was selling off prime London “trophy assets” instead of developing them for the long-term interests of taxpayers.
“Should you be selling them in bad markets or should you be holding onto them?” he asked on RTÉ.
Mr Bacon insisted Nama was not interested in getting the best, long-term return for the taxpayer, lacked sufficient property market expertise, and had become so big and complex that ministers were “afraid of it”.
Hitting back, Frank Daly, Nama chairman, branded critics such as Mr Bacon “naive”.
Insisting the agency was concerned with managing property portfolios, Mr Daly said: “I think it would be naive to think that we don’t have debts to collect on behalf of the Irish taxpayer as well.
“Our objective is to realise the potential of the assets, but let’s not be naive and say while doing that we can afford the debtors not to repay some of their debts.
“It’s probably the first time anybody would be criticising someone for making an operating profit.”
Mr Daly insisted Nama could not “just sit back” for decades and wait for markets to improve.
“We have a commitment to the troika — we have to get the best return for those assets as we go,” he said.
“We are not selling at firesale prices, we are selling where we can get a good return.”
Mr Daly stressed the agency had paid €32bn of taxpayers’ money to banks and needed to return €7.5bn by the end of next year.
He denied Nama was interested in helping distressed companies with loans and joint ventures.
“People have the notion you go into Nama and you’re finished; that is not true,” he said.
Mr Daly also denied that London assets were being sold off on the cheap and insisted he was “bemused” by Mr Bacon’s comments that the Government was frightened of Nama.
“I can assure you nothing could be further from the truth,” he said, stressing he met with ministers regularly and that Nama had been set up under a structure decided by the Oireachtas.