A CONSORTIUM involving the Dublin Docklands Development Authority (DDDA) stopped paying interest on a near-€300 million property loan more than six months ago, an Oireachtas committee has heard.
The State body joined with developer Bernard McNamara and financier Derek Quinlan to form a company called Becbay which paid €412 million for the former Irish Glass Bottle plant in Ringsend.
The €293 million loan was given for two years and its terms were being renegotiated, said the authority’s chief executive Paul Maloney.
Mr Maloney told the committee the loan had been from Anglo Irish Bank. But, in a statement last night, the DDDA said the loan had been jointly given by Anglo and Allied Irish Banks. A spokeswoman for AIB was unable to say how much the bank had provided for the project.
Mr Maloney and other senior DDDA executives yesterday appeared before the Oireachtas Environment, Heritage and Local Government committee.
Mr Maloney said the majority of the loan was secured upon the Ringsend property itself, and just €100 million was guaranteed by the three partners. He did not explain why interest payments had stopped.
“We will be sitting down with our partners to negotiate the ongoing loan facility,” he said.
Meetings would be held next week with now-nationalised Anglo Irish on the loan’s terms, Mr Maloney told Fine Gael TD Phil Hogan during sustained questioning. The 24-acre site would be revalued over “the next two or three weeks”, said Mr Maloney, adding he believed its value had fallen by “20-30 per cent”.
Mr Hogan said the authority revalued other assets “every quarter” and asked why the DDDA did not have an up-to-date valuation on its biggest-ever investment.The DDDA, set up over a decade ago to rejuvenate run-down inner-city districts north and south of the Liffey, valued its 26 per cent share in Becbay at €117 million at the end of 2007.
Mr Hogan sharply criticised the board of the authority that served up to 2007 for involving the State body in a risky property deal “at the height of the market” in Ireland. Mr Hogan also raised questions about possible conflicts of interests on the part of former Anglo chairman Seán FitzPatrick and board member Lar Bradshaw, who both also had places on the DDDA’s board.
Mr Maloney said the two had taken part in an October 2006 conference call among board members to buy a 26 per cent share in the Ringsend site. This stake was “the absolute minimum” the DDDA could have taken, he said, because the Ringsend lands were bought as a company and not just land.
But Mr Maloney said that they had absented themselves from a meeting the following month which agreed to deal with Anglo as the lender, rather than Bank of Scotland and Bank of Ireland.
Following the meeting, Mr Hogan asked Minister for the Environment John Gormley to investigate the DDDA’s “financial solvency”.
