Pearse Doherty: NAMA not a success, asks about extensions
Pearse Doherty challenged the claim that NAMA was a success and pressed ministers and officials on the legal and financial consequences of winding down the agency. He raised questions about the need to re-engage the European Commission on state aid, the number of court cases still pending, and whether repealing the NAMA Act will affect banking governance.
Key questions raised:
Doherty disputed the assertion that NAMA was a success, saying the agency crystallised losses in the region of over 30 billion euro and that tens of billions have not been recovered. He criticised the sale of assets at a time when value was not secured, and put those concerns on the record during committee scrutiny.
State aid and dissolution timeline:
He reminded the committee that the European Commission approved a limited extension to NAMA until 2025 on 25 July 2019 and asked whether officials needed to seek a further approval because the legislation had not been enacted by the end of last year. Officials responded that there was no requirement for a new formal approval and that NAMA is expected to operationally wind down by the end of 2025 pending enactment of the dissolution measures.
Court cases and transfer of responsibilities:
Doherty sought detail on ongoing litigation. Officials advised that eight cases remain before the courts: six involving NAMA and two involving IBRC. The NTMA will be substituted for NAMA and IBRC in those actions, and any timescale for resolution is a matter for the courts, though an expectation of around two years was noted.
Repeal of the NAMA Act and banking governance:
Section four of the bill repeals the 2009 NAMA Act and parts of eight other enactments, prompting questions about potential implications for the banking levy, bankers' bonuses and reporting requirements. Officials confirmed that where necessary the NTA will be substituted for NAMA and that repeals will not alter existing levy or reporting obligations.
Implications for oversight and taxpayers:
The exchange underlines continuing scrutiny of NAMA's legacy, the legal winding down of state entities, and the safeguards being sought to protect banking governance and the interests of taxpayers as responsibilities move to the NTMA.
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Just in relation to, and obviously you outlined, Minister, that people will have contested views in relation to NAMA and you're accurate in relation to that. I would not say that NAMA has been a success. Your predecessor talked about recovering all monies that were owed on these loans. That didn't happen, as we know. Tens of billions of euro to the taxpayer has not been recovered and NAMA sold its assets instead of managing those assets at a time when they didn't get the value for them. So just to put that on the record as you have put on the record, the idea that NAMA somehow was a success story given that it crystallised losses in the region of over 30 billion euro, I don't think that's a success for anybody. But the question in relation to the actual legislation in terms of section 1, it talks about the dissolution day. It was originally intended that the legislation would be passed in order to facilitate the conclusion of the special liquidation of IBRC and the dissolution of NAMA by the end of 2025. My understanding was that on the 25th of July 2019, the European Commission approved under EU state aid rules a limited extension to NAMA until 2025. Can I ask, was there a need to re-engage with the Commission to seek a further extension given the fact that the government hadn't reached its target of actually having this legislation passed by the end of last year? Anybody else? Okay, Ara. Okay, so informed officials have engaged with the Commission and there was no need to seek a formal approval because they were content that NAMA will have operationally wound down by the end of 2025 and there's no requirement to seek further state aid extension pending the enactment of the necessary legislation to legally dissolve the agency. Okay, and Chester Burke? Just in relation to Minister, in relation to ongoing court proceedings, what number of cases are currently ongoing and the likely timescale? Obviously, they would be transferred over, they would now be transferred over as well. So, what are we talking about here and what is the estimated cost of dealing with these cases at this stage? What I can say is that six NAMA cases and two IBRC cases are before the courts and I suppose the timescale in relation to how they will be delivered. Sorry, I didn't get the numbers. Six and two. Two? Two, yeah. Yeah, are currently pending still before the courts? Yes. And that's all that's pending, is that right? Yes, and essentially what's happening is the NTMA is going to be substituted in for NAMA and the IBRC. Okay, but in relation to the timescale for those? That's subject to the courts. I can't give a timescale in terms of how that will be wound down. But I'm advised here that the expectation is within two years, but you know, sometimes you know yourself when court cases start. But are these in relation to loans or are they in relation to particular properties? In relation to the IBRC, in both cases the IBRC are taking the cases. In relation to the six NAMA cases, three cases have been taken by NAMA and three cases have been taken by the debtors, the plaintiffs. So there are six cases still pending as such, is it? There's eight in total. Eight in total? Eight in total. Six for NAMA and two for the IBRC. Okay, but were they initiated by NAMA or were they defenced? Well, of the six NAMA cases, three were initiated by NAMA and three were initiated by the debtors themselves. Right, okay. And two by the IBRC were initiated by the IBRC. Okay, alright. Okay, thanks. Okay, anybody else on section one? Nope? Okay, that section one stand part of the bill, is that agreed? Section two. Section two, does anybody wish any questions on section two? Okay, that section two stand part of the bill, is that agreed? Agreed. Section three. That section three stand part of the bill, is that agreed? Agreed. Section four. That section four, oh sorry, go ahead. On section four. Yeah, just on section four and this deals with the repeal and amendments. So, you know, this is a substantive part of the legislation as it repeals the 2009 NAMA Act and sections of eight other pieces of legislation. Now, the NAMA Act, as we know, and other bits of legislation, but particularly the NAMA Act, has reshaped the banking landscape in Ireland for the last number of years. And the question is, and just to give us the assurance here, that will the repeal of this act have any impact on banking governance in the state? For example, even when I'm engaging with the Minister of Finance on the banking levy, we refer to NAMA participating banks, like that's the language that we use. So, can we assure, can you assure the committee that no, you know, that repealing this act and the other eight sections of other legislation will have no implications on, for example, the banking levy, the banker's bonus, the reporting requirements, et cetera, that already exist? All right. There's no impact where necessary to continue with the NTA substituted for NAMA. There's no impact to the legislation, there's no impact to the committee, there's no impact to the committee, and there will be no repealing of the NAMA where necessary, but where it needs to be maintained, the NTA is being substituted for NAMA. There's no impact, Deputy. Where necessary, the NTA has been substituted for the orderly wind-out, so there's going to be no impact in terms of the general direction that you've outlined. So no impact on the banking levy, the banker's bonus, our reporting requirements? No. No. As a result of the repealing of the different sections. Okay. Okay, any other questions?
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