The Public Accounts Committee has criticised Finance Minister Paschal Donohoe for refusing to insist that Nama ensure debtors are not involved in buying back their own assets.
Nama believes it would be time-consuming and costly to verify written declarations by developers that they are had not been involved in the re-purchasing loans taken over by it. The agency also warned that “comprehensive verification” of purchaser declarations would imply “many purchasers of Nama-secured assets are wilfully breaking the law”.
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Mr Donohoe told the Public Accounts Committee that Nama had informed him that verifying developers’ claims, as the committee recommended, “would give rise to a number of serious practical difficulties which could have an adverse commercial impact on its sales activities”.
PAC Chairman Sean Fleming said the committee had “never suggested that Nama clients were wilfully breaking the law” and that it was only recommendation “some verification”. The Fianna Fáil TD pointed out that Revenue made similar checks of self-assessing taxpayers. “Just because they do spot checks doesn’t mean a presumption that all taxpayers are wilfully breaking the law,” he said.
Social Democrats TD Catherine Murphy said that Nama legislation is “flawed” when it comes to preventing developers from re-purchasing their loans and claimed under parliamentary privilege: “I have no doubt that there are people back in control of their assets.”
Section 172 of the Nama Act stipulates that the agency is prohibited from selling loans or property to defaulting borrower or connected parties. Those purchasing Nama assets usually make a written declaration that they are not in breach of this clause.
However in its periodic report earlier this year PAC said it was unacceptable that there is a “lack of systemic and routine verifications” of these declarations and recommended a system be put in place.
Mr Donohoe told Ms Murphy in a parliamentary answer in February that An Garda Síochána were investigating an alleged breach of this rule.
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