The National Asset Management Agency has tightened rules for the purchase of property by its staff following the unauthorised purchase of a Co Dublin house by an employee from one of its debtors, the State agency has told an Oireachtas committee.
Chairman Frank Daly said the agency had revised an internal policy for staff which requires them to seek pre-approval for the purchase of any property so it can be checked against the agency's property register.
The agency's rules prohibit the transaction if it is an investment in a commercial property. If the property is a residence intended for use as a home, pre-approval for the purchase must be obtained and the property must have been openly marketed, he said.
Mr Daly told the Joint Oireachtas Committee on Finance, Public Expenditure and Reform that Nama is also introducing a general requirement forcing all buyers of property in which the agency has interest to declare whether they are closely connected with an office of the agency.
The agency is also applying the policy to staff in the banks who are managing loans for Nama and where staff have access to the its information.
It emerged earlier this year that a man who had been a portfolio manager at Nama, Enda Farrell, had bought a four-bedroom house and two acres of land at Sundays Well in Lucan from property dealer Thomas Dowd for €410,000.
Investigations subsequently found that Mr Farrell, who left the agency earlier this year, took confidential information from the agency and was found to have distributed it to senior executives at international property and investment companies.
Mr Daly said the agency had reviewed internal data security and that security processes in place are "extremely robust", but that no organisation can absolutely guarantee that it will not have a theft of data. "I don't for a moment underestimate the seriousness of this episode for the agency and for our reputation," he said. "However, some of the suggestions which have been made about the potential damage caused to our work have been exaggerated, to say the least."
Mr Daly said the agency was at an advanced stage of identifying the extent to which the information was circulated and was encouraged by the level of "active co-operation that we are getting from the parties who received the information".
There was only one other employee under investigation, said Mr Daly, but he had been legally advised not to comment further "in the interest of due process".
He told the committee at no time had anyone in the agency authorised Mr Farrell to purchase the property in question and that Mr Farrell had failed to disclose the transaction to Nama prior to or following the transaction, as he was required to do.
Nama had introduced changes to staff rules on the purchase of properties following recommendations by the agency's internal auditors Deloitte, who were asked to review the transaction and whether Mr Farrell had breached protocols, Mr Daly added. Deloitte advised Nama to consider revising its existing Personal Account Transaction policy for staff compelling them to disclose additional details of any property transactions they are involved in.
Nama chief executive Brendan McDonagh said veryone at the agency was "angry and disappointed" at the actions of Mr Farrell which have "cast a shadow over our work" in recent months.
"There is a real sense of disbelief among my colleagues that the agency's reputation and its commercial interests could have been put at risk so gratuitously in these circumstances," he said.
Mr Daly said the agency's board had discussed banning staff from buying any property from the agency but concluded that limiting it to residential property for use as a home with pre-approval was a "proportionate response".
Nama has issued High Court proceedings against Mr Farrell and his wife directing them to deliver up all documents, communications and materials which contain confidential information relating to Nama.
The agency has informed the Garda a criminal offence may have occurred in relation to the matter and has reported what occurred to the Data Protection Commissioner.
