Tuesday, 18 September 2012
Dáil Éireann Debate
306. Deputy Pearse Doherty asked the Minister for Finance the number of properties that have been sold by the National Asset Management Agency, its receivers or debtors to NAMA employees, former NAMA employees, their families and associates, and the total value of such sales. [38527/12]
307. Deputy Pearse Doherty asked the Minister for Finance the consideration that has been given by the National Asset Management Agency to adopting practices from other State asset management agencies, such as the US Federal Deposit Insurance Corporation, which ban outright any dealings in agency property by employees. [38528/12]
Minister for Finance (Deputy Michael Noonan): I propose to take Questions Nos. 306 and 307 together.
I am informed by NAMA that it is aware of only one transaction involving the sale of property by a NAMA debtor to a former employee. After NAMA became aware of the particular transaction involved, it instructed its internal auditors, Deloitte, to carry out a comprehensive review of the transaction. The Deloitte review has established that the sale of the property was transacted at market value as the sale price was in accordance with an independent valuation at the time of the transaction. It found that the former employee did not disclose the transaction to NAMA at any time either prior to or following the transaction.
NAMA requires its entire staff to complete a disclosure under Section 42 of the NAMA Act outlining all assets, liabilities and interests which they hold. Each employee is also required to inform the CEO of NAMA of any changes to their disclosure and to immediately inform the CEO of any matter that could raise a question about their suitability to act (or continue to act) as an officer of NAMA or that could result in an actual or potential conflict of interest with respect to their duties or obligations as an officer of NAMA. I am advised that the Board of NAMA is currently reviewing the Deloitte findings and, as part of that review, will consider whether there are any changes required to NAMA's current compliance procedures.
308. Deputy Pearse Doherty asked the Minister for Finance if any employees seconded by the National Treasury Management Agency to the National Asset Management Agency that have resigned from either organisation, and who have subsequently been engaged by organisations which have purchased property from NAMA, its receivers and developers or which have met with NAMA to express interest in the purchase of property. [38530/12]
Minister for Finance (Deputy Michael Noonan): I am informed by NAMA that it does not, in all cases, have information on the identity of employers who recruited staff following their resignation from the Agency as some former staff have taken up employment overseas. However, in cases where NAMA has such information, NAMA is satisfied that no sales transactions have taken place between the entities involved and NAMA, its debtors or receivers appointed by it. The number of meetings between NAMA staff and entities involved in property financing, investment or development runs into hundreds per year. Many meetings between NAMA staff and external parties, of necessity, involve such parties expressing an interest in NAMA and its activities.
I am advised by NAMA that it has procedures in place restricting access to sensitive information between different business areas and within specific business areas. Access to such documents is restricted to essential personnel.
309. Deputy Pearse Doherty asked the Minister for Finance the safeguards that the National Asset Management Agency has in place to prevent confidential or privileged knowledge acquired during the course of employment at NAMA being subsequently used by departing employees when they begin work with a new employer. [38531/12]
Minister for Finance (Deputy Michael Noonan): Staff assigned to NAMA by the NTMA are bound by a number of statutory obligations in respect of the confidentiality of information to which they have access by virtue of their employment by NAMA. These include obligations imposed under Section 14 (1) of the National Treasury Management Agency Act 1990 and under Section 202 of the NAMA Act 2009. NAMA staff are also subject to the provisions of the Official Secrets Act 1963. Contravention of these statutory obligations constitute criminal offences.
In that context, NAMA may reasonably expect that former employees will abide by their statutory obligations which are perpetual and which remain binding after they cease employment with NAMA. I am advised that the Board is currently reviewing procedures that will look at all areas in relation to the protection of sensitive information.
310. Deputy Pearse Doherty asked the Minister for Finance the quantum of fees paid to date, by the National Asset Management Agency in respect of the State guarantee on €25billion-plus of NAMA bonds; and if no such fees have been paid, the basis on which State guarantee has been provided. [38532/12]
Minister for Finance (Deputy Michael Noonan): I am informed by NAMA that no fees are payable arising from the State guarantee granted in respect of Senior Notes issued by NAMA. As the Deputy is aware NAMA was established in late 2009 as part of the Irish authorities' response to the financial crisis. It formed part of a wider set of measures taken to address the liquidity and solvency issues of systemically important Irish Banks. NAMA continues to make an effective and vigorous contribution to national recovery.
311. Deputy Pearse Doherty asked the Minister for Finance the consideration that has been given to the merger of the National Asset Management Agency with the Irish Bank Resolution Corporation; and the scope for reducing competition between the two State owned entities for resources and customers, and potential savings to the combined annual operating costs of €400-500million. [38533/12]
Minister for Finance (Deputy Michael Noonan): NAMA and IBRC are actively engaged in reducing their respective portfolio of debts and debtors. They are not in direct competition with each other for customers and resources. The board of NAMA and the IBRC actively monitor all cost headings and are driving efficiencies and substantial savings through their procurement processes. Due to funding and operational considerations it is not considered appropriate to merge the two agencies at this time.
312. Deputy Pearse Doherty asked the Minister for Finance the quantum of maximum potential additional costs that the Irish Bank Resolution Corporation may incur, should IBRC’s appeal against the 27 July 2012 decision by the High Court in England in respect of the application by Assenagon Asset Management SA, fail and if IBRC is exposed to claims from other holders of subordinated notes. [38547/12]
Minister for Finance (Deputy Michael Noonan): As the Deputy notes IBRC is appealing the decision of the High Court in England in relation to this matter. It would be inappropriate for me to comment on the likely outcome of that appeal or the potential impact of the judgment while the appeal is on-going.
314. Deputy Pearse Doherty asked the Minister for Finance if the National Pension Reserve Fund has received the independent valuation review, referred to in its Quarter One 2012 review, of its share holding in Allied Irish Bank and Bank of Ireland; and if it has, if he will provide the independent valuation of the NPRF’s shareholding in AIB and Bank of Ireland. [38615/12]
315. Deputy Pearse Doherty asked the Minister for Finance the most recent valuation of the State’s share holdings in the covered institutions including Bank of Ireland, Allied Irish Bank and Permanent TSB in tabular form; and the basis and dates of such valuations. [38616/12]
Minister for Finance (Deputy Michael Noonan): I propose to take Questions Nos. 314 and 315 together.
I am informed by the National Treasury Management Agency, as Manager of the National Pensions Reserve Fund (NPRF), that the NPRF Commission engaged Goodbody Corporate Finance to provide an independent fair value of the Fund's holdings of shares in Allied Irish Banks and of its preference shares in Bank of Ireland as at 31 December 2011. This was because the preference share investments in both banks are unlisted and because it is difficult to establish a fair value for ordinary shares in Allied Irish Banks given that the Fund holds 99.8% of those shares. Based on the advice of Goodbody Corporate Finance, the Commission valued the Allied Irish Banks ordinary shares at €0.0076 (0.76 cent) per share and valued the preference share investment in Allied Irish Banks at 63.5% of cost. This gives a total value for the Fund's shareholding in Allied Irish Banks of €6.1 billion at end-2011 (€2.2 billion preference shares and €3.9 billion ordinary shares).
The Fund's ordinary share holding in Bank of Ireland was valued at its market price of €0.082 (8.2 cents) per share at 31 December 2011. The holding of preference shares was value at 80.2% of cost, on the advice of Goodbody Corporate Finance. This gives a total value for the Fund's shareholding in Bank of Ireland of €1.9 billion at end-2011 (€1.5 billion preference shares and €0.4 billion ordinary shares). The Minister for Finance invested €2.3 billion in Permanent TSB (formerly Irish Life and Permanent) in July 2011 in return for 36,249,014,972 ordinary shares (at an issue price of €0.06345 per share). The shares are held at their nominal value in the Finance Accounts. The State shareholding in Permanent TSB stands at 99.24%.
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