The National Asset Management Agency (Nama) will instigate legal action in the coming weeks against individuals with debts amounting to €300 million who are refusing to co-operate with it. The cases relate to about 12 individuals whose loans are due to transfer to Nama.
The announcement was one of a number made by Nama chief executive Brendan McDonagh yesterday in a bid to counter perceptions that the agency had become bogged down and was contributing to negative sentiment towards Ireland in the international debt markets. Mr McDonagh told the Richard Cantillon School in Tralee, Co Kerry, that Nama had agreed with the relevant banks that they would next week begin enforcement actions against individuals who "will not come to the table".
This will include actions such as taking control of businesses and assets through the appointment of receivers.
Mr McDonagh added that the agency was still negotiating business plans with the 32 largest property developers whose loans it had acquired, and would also take action directly against them if it proved necessary. To date, Nama has processed the business plans of two of the largest developers.
They now had six weeks to indicate if they would co-operate. "Borrowers are being given a short period of time to decide if they are going to play ball. After that we will consider enforcement action," he said.
"If you can't do business with someone in 30 days, you are not going to do business with them in 300," Mr McDonagh said.
Nama is acquiring €81 billion in land and development loans owed to the Irish banks by about 1,500 customers. It is buying the loans at an average discount of about 50 per cent.
It will directly manage the larger clients and devolve responsibility for managing smaller loans back to the banks. The process – along with associated recapitalisation – is meant to allow the banks: AIB; Bank of Ireland; Anglo Irish Bank; EBS Building Society; and Irish Nationwide absorb their losses, resume lending and facilitate economic recovery.
Delays in the transfer process – blamed largely on paperwork problems at the banks – is one of the factors weighing on market sentiment towards Nama. Mr McDonagh said the banks had made a significant effort to address the paperwork issue. He also responded to criticism that Nama had failed to unlock the property market. Mr McDonagh said the agency was in advanced discussion with the banks about the sale of about €500 million of properties held by customers who qualified for Nama.
