LENDERS WHO provide “misleading information” to the National Asset Management Agency (Nama) should expect prosecution, the Minister for Finance Brian Lenihan, said yesterday.
The warning followed complaints from Nama chairman Frank Daly that some information provided to the agency by lenders had been incorrect. This led to the agency sharply reducing its estimates for the profit Nama could deliver over seven to 10 years, from €4.8 billion to €1 billion.
Mr Lenihan said those who knowingly gave false information to Nama could face criminal prosecution, under the legislation that established the agency.
"It's written into the legislation that, if there's any misleading statements by bankers, that they commit a criminal offence," he said on RTÉ's Morning Ireland.
“If evidence of that were to materialise, Nama could put it in the possession of the prosecuting authorities and deal with the banks accordingly.”
The legislation allows for prosecution of a person “who intentionally, recklessly or through gross negligence provides false or inaccurate information to Nama”.
The Minister was speaking after Tuesday’s publication of Nama’s business plan, which outlined a potential loss of €800 million for the agency in a worst-case scenario. Mr Lenihan said any such shortfall would be covered by a levy on the banks.
“The idea that banking system can’t cough up €800 million in 10 years’ time is absurd,” he said. “At worst, there is no loss to the taxpayer from Nama.”
Mr Lenihan denied that there had been an “endless deterioration” in Nama’s figures but claimed the agency had been “shocked” at the “horrific” lack of proper procedures within the banks.
Former Bank of Ireland chief executive Michael Soden yesterday said it was unlikely that senior bankers had deliberately lied to Nama, suggesting it wasn’t in their nature to do so.
“I can only conclude that they are incompetent,” said Mr Soden, adding that bankers had been in a “state of continual denial” on matters surrounding Nama.
He said this presupposed that Nama wasn’t “feathering its own nest on the other side”, by reducing expectations with a view to ultimately being seen to have “done a good job” over its lifetime.
Mr Soden said credit departments in banks had “very, very strict rules”. He acknowledged however that bankers may have believed it was acceptable to allow developers to “roll up” interest rather than pay it.
It was “extraordinary” that banks did not use the tools at their disposal to gain maximum income from loans, he added.
CODE OF PRACTICE FOR NAMA 'OFFICERS' MUST BE BEYOND REPROACH
PEOPLE WORKING for the National Asset Management Agency (Nama) must be “beyond reproach” in relation to conflicts of interest, according to an internal code of conduct.
The code, which relates to “officers” of Nama, underlines the importance of maintaining “public confidence”.
“Officers of Nama must be seen at all times to be beyond reproach in the areas of actual, potential or perceived conflict of interest situations,” according to the code. Nama “officers” are defined as employees of the National Treasury Management Agency assigned to the toxic loans body.
Senior staff assigned to Nama must furnish an annual statement of interests that could “materially” influence their work, and they must stand aside from any discussions relating to those interests. Where different business units within Nama have “potentially conflicting” duties to two or more parties, the agency will consider erecting “Chinese walls”.
Much of the code is dedicated to the importance of confidentiality for Nama staff. Officers are told they must only use confidential information “for the lawful and proper performance of their duties”. Such information “should never be discussed outside Nama”, the code dictates.
It suggests code names should be used for “highly sensitive transactions” and warns officers to be cautious in conversations, however informal. “In particular, care should be taken in public places such as pubs, restaurants, lifts and on public transport.”
Officers are also precluded from accepting gifts, sponsorship or other benefits if this might influence, or appear to influence their objectivity.
UNA McCAFFREY
