THE NATIONAL Asset Management Agency (Nama) claims that a loan made to businessman Paddy McKillen to buy shares in Anglo Irish Bank in the so-called “golden circle” transaction is classed as impaired by the nationalised bank.
The claim was made in the legal case taken by Mr McKillen against Nama and the State in which he is trying to stop the transfer of €2.1 billion in loans to the agency set up last year to take toxic bank loans.
An investor in properties valued at up to €2.8 billion, Mr McKillen claims that he is repaying his loans in full, that he is an “unimpaired” borrower and that his loans should not be moved to Nama as it will damage his overall business.
In court filings Nama has claimed that a €37 million loan from Anglo to Mr McKillen – and a further interest “roll-up” loan of €3 million – for “Anglo share dealing” expired in January 2010 and was classed by the bank as “impaired” in July 2010.
Mr McKillen was one of 10 customers of Anglo approached in July 2008 to buy a 10 per cent stake from businessman Sean Quinn. The bank organised and financed the transaction to stop the shares being sold on the open market as this would have collapsed the share price at a highly volatile time in the banking crisis.
Mr McKillen’s legal challenge, which has crucial implications for the work of Nama and the Government’s bank rescue plan, opened yesterday before three judges led by the president of the High Court Mr Justice Nicholas Kearns.
The businessman claims that the transfer of his loans to Nama involved a “total” and “unprecedented” abrogation of his rights.