Nama in breach of its own rules on sale of assets - Senator

A SENATOR and professional valuer has claimed the National Asset Management Agency (Nama) has broken its code of conduct for selling assets.

Senator Mark Daly of Fianna Fáil said he has been told of a UK property sale where people bought property linked with loans owned by the agency at below market rates.

According to Mr Daly, the property, which he would not identify, was the subject of a £12 million loan on which a 50 per cent discount was applied when it was being transferred to Nama. The property was subsequently bought for £6 million by associates of the original owner and then sold on at a profit, he told The Irish Times.

He said that Nama was selling property through private sales, when under the agency’s code of practice, its assets had to be sold by way of auction or competitive tendering.

A spokesman for Nama said it was “ludicrious” to suggest that the agency, which is subject to the scrutiny of the Oireachtas, the Comptroller Auditor General, the Dáil Public Accounts Committee, and the European Commission, was acting outside its powers.

He said Nama buys loans from banks but not the properties that form the collateral for those loans.

Where the agency requests borrowers to reduce their debt, they may sell the properties. Nama consent is required but it is not in charge of the sale. He said where receivers are appointed by Nama to a borrower, the assets would then have to be sold by way of auction or competitive tendering. This had not happened yet.

He said the agency had no tolerance for properties being sold to the original lenders or to persons or entities associated with them.

Earlier this month, the agency’s chief executive Brendan McDonagh said it hoped to raise close to €200 million from “two or three” Irish property sales by the end of March. He said the agency was in advanced negotiations with overseas buyers for two of the assets, and with a domestic buyer for the third.

During 2010, property worth almost €2 billion and associated with Nama loans was sold on the UK market.

A code covering how it would dispose of assets was published by the agency last year. It states the code covers only bank assets and that the sale of property and other assets was covered by the 2009 code on government bodies. That code requires auctions and competitive tenders.