A MISCALCULATION BY the National Asset Management Agency (NAMA) during the sale of loans in 2012 resulted in a loss of approximately €10 million to taxpayers.

The Committee of Public Accounts (PAC) has found that NAMA’s error in the sale of its Project Nantes loans lost taxpayers €10 million, and additional failures related to the sale resulted in a total potential loss of around €29 million.

Project Nantes saw the sale of loans from an Avestus portfolio to a Luxembourg based company called Clairvue-Nantes Luxco SARL.

NAMA originally acquired the loan bundle for €46.2 million in 2009 at an 85% discount on its equivalent value of €307 million in 2006.

PAC chair Brian Stanley said that “NAMA then miscalculated the target price for the Project Nantes loans which resulted in a direct loss to the taxpayer of approximately €10 million and achieved just €38.6 million when it subsequently sold the Project Nantes loans”.

Stanley said that NAMA sold the loans based on appraisals that were conducted two years earlier.

The PAC has examined a special report from the Comptroller and Auditor General on NAMA’s management and disposal of the Project Nantes loans and found that the miscalculation, coupled with the decision not to seek newer appraisals and a lack of competitive sales process, resulted in a total potential loss to taxpayers of around €29 million.

Stanley said that members of the committee were concerned by a “failure of due diligence by NAMA to carry out a detailed investigation on the links between companies managing assets on their behalf and potential purchasers, as it was later discovered following the sale of Project Nantes that one of the directors of Clairvue had previously been a director of Avestus”.

“Another matter the Committee addressed was the lack of documentary evidence of the sale of the Avestus portfolio. This was a blatant failure to implement appropriate levels of transparency and good practice,” Stanley said.

Separately, the PAC has also raised concerns about planning permission for 7,300 properties on land owned by NAMA which have not yet begun to be constructed.

The PAC noted that NAMA said the commitment it gave to the Minister of Finance in 2015 to build 20,000 homes on land that it controls by the end of 2020 has been extended by one year.

Stanley said that “members noted NAMA’s reasons for construction delays, including Covid-19 and issues such as water infrastructure and access to sites with planning permission”.

“However, the Committee is of the opinion that NAMA must continue to work to ensure that the target of 20,000 residential units is met by the end of 2021,” he said.