While public is distracted by Covid-19, Nama shrugs off loan sale findings

Paschal Donohoe, the Minister for Finance, has been sitting on The Comptroller and Auditor General’s report into the knockdown sale by Nama of loans linked to Derek Quinlan for three months. He received the report from Seamus McCarthy’s office on the day before Christmas Eve. The Minister then had three months to put the State spending watchdog’s findings in front of the Dáil.

Given its focus on allegations involving Nama, he was always unlikely to publish the report ahead of a general election. On Thursday, days before the deadline ran out and while almost the entire country is distracted by the Covid-19 crisis, the report was released.

The timing, which meant the news was buried under a blizzard of other stories, was fortuitous for Nama. The report’s criticism of the agency was about as sharp as it gets in the staid and genteel world of public sector report writing.

Mick Wallace revealed that a director of Avestus was also a director of the Clairvue entity that bought the loans

The report focused on the 2012 sale of Project Nantes, a portfolio of loans linked to Quinlan Private, to Clairvue Capital, a US private equity fund. At the time of the sale, the loans were managed by Avestus, which took over Quinlan Private in 2010. The portfolio included personal loans of partners in Quinlan’s business.

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Then Independent TD Mick Wallace revealed that a director of Avestus was also a director of the Clairvue entity that bought the loans, which he claimed was illegal. McCarthy found that it wasn’t illegal, as the provisions preventing the sale of Nama assets at discounts back to anyone linked to the original borrowers technically only referred to the sale of property and not loans.

The loans were sold for about €27 million, a €10 million loss for the agency – the only loss it made on loans linked to Avestus. McCarthy found that Nama undervalued the Nantes portfolio by as much as €29 million. It also revealed that Nama had no idea that an Avestus director was linked to Clairvue.

Given the public’s distraction with Covid-19, Nama got away this week with shrugging its shoulders at the report and effectively replying: “So what?” It is not good enough. Nama’s sloppiness cost taxpayers up to €29 million. When the dust settles, the agency ought to give a better explanation of what went wrong.