THE NATIONAL Asset Management Agency is paying a €200,000 salary to a property developer who is not tax-resident in Ireland.
Earlier this year Nama confirmed that it was paying a salary of €200,000 to two debtors and was planning to approve salaries of up to €100,000 for about 120 other developers whose loans have been transferred to the agency.
In new correspondence to the Dáil’s Public Accounts Committee, Nama’s chief executive Brendan McDonagh has confirmed that of the two biggest debtors, one is an Irish citizen who is not currently tax resident in Ireland.
The principal business interests and assets of this individual are in the UK, he said. The other major debtor is a resident and tax resident of Ireland.
Overall, Nama paid a total of €4.1 million in salaries to 41 property developers last year. Their combined debt is €18.6 billion.
Nama has previously insisted that while paying these salaries was not a popular move, it will help the agency get the best commercial return for the taxpayer.
The new correspondence also contains details on incentive payments to developers aimed at encouraging them to repay their debts.
It states that if a developer recovers the acquisition price paid by Nama for their loan plus a further 10 per cent, they may retain a portion of the excess to encourage debt repayments.
Nama has signed legally binding agreements with nine debtors under which proposed incentives are in place, linked to these “financial milestones”. It says each of these nine agreements differ, depending on the nature of the debt.
It gives the example of a debtor who secures €570 million for a loan that was acquired by Nama for €560 million. In this case, of the €10 million, some €9 million would go to Nama while €1 million would go to the debtor.
Mr McDonagh, however, says this outcome is unlikely. “Looking at the current economic situation both in Ireland and in other locations were assets are located, unless there is a significant global economic improvement, it is likely that no debtor will achieve the aggregate targets to qualify for an incentivisation arrangement,” he writes.
Nama has acquired close to €2 billion more in loans from the banks in recent times, bringing its portfolio to €74.2 billion, for which it has paid €31.7 billion.
Mr McDonagh said developers are obliged to repay the full €74.2 billion debt to Nama. However property values have fallen by about 60 per cent in Ireland from peak so this would not be possible given the market, he said.
