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Nama chief notes 'shocking' sale of 'rat-infested' property worth €10.3m for just €265K

The head of Nama has admitted the sale of a “rat-infested” Donegal property subject to loans of €10.3m for just €265,000 is “shocking”, but insisted the agency had had no alternative.

The sale of the property, which consists of 14 occupied residential units and 28 unoccupied ones on a 21 hectare site, to a company owned by the brother of the original debtor, was raised by State’s accountant the Comptroller and Auditor General in his 2021 report on Nama's progress, saying what had transpired was “so exceptional” it merited mention.

The sale happened following a campaign of intimidation and threats, which saw the receiver appointed to sell the land resign in May 2020, with Nama subsequently concluding the market value of the assets was “unlikely to ever be achieved or the lands disposed of while the threats and intimidation continue”, while the debtor had likewise “threatened to commence litigation to frustrate the sale of the assets”.

'Shocking'

“It is shocking, I agree,” Nama chief executive Brendan McDonagh told the Public Accounts Committee on Thursday morning. 

“But the only alternative open to us after the receiver resigned was to get the assets back in control of the debtor."

Mr McDonagh stressed the low valuation of the site was not that of Nama but of an independent assessor, and argued he could not conceive how such low-quality land — the site being based on marshland — had been given such a large loan in the first place.

He said the land is currently subject to a vermin infestation and that the HSE had told Nama “that they want to pursue whoever is responsible under the Rats and Mice Act”.

He said the present rent of the properties was unknown, though he speculated €1,000 per unit would seem likely for a three-bed house. He said“there’s a man who comes every Friday who collects the rent”.

'Like the Wild West'

The members of the PAC present reacted collectively with incredulity regarding the nature of the deal, which was variously described by those in attendance as “extraordinary”, “unbelievable”, and, in the words of chair Brian Stanley, “like the Wild West, with bags of money on the side of a horse”.

Social Democrats TD Catherine Murphy queried as to how the sale had been allowed given under the Nama Act property can not be sold to the family of an impacted debtor.

Mr McDonagh agreed Nama had “absolutely” known the company buying the site was funded by the debtor’s brother, but said “a company is a different entity to an individual” and the company’s director was no relation to the debtor.

Ms Murphy said “the receiver was intimidated, the local authority was intimidated into not looking at buying, the estate agents were intimidated, the tenants were intimidated, and Nama rolled over”.

“Nama did not roll over,” Mr McDonagh said. “We don’t have the assets, we have the loans.” 

Nama staff threatened

He agreed Nama had only once before been subject to a similar situation, in 2012, involving the same debtor, where two Nama staff members had been threatened outside a courtroom where a case involving the debtor had been in progress.

“Intimidation clearly works in this situation,” Sinn Féin’s John Brady said.

“No that is completely wrong,” Mr McDonagh said. “The debtors were completely bankrupt, the fact there was a €10m loan against it didn’t matter because there was no way of getting it back.” 

“Believe me, I want every single penny out of every single asset,” he said.

“I’d like to assure you, I've been in this business for 14 years, I don’t think there is anyone would say that you could intimidate Nama.”