Transparency

August 9, 2009

 

Interesting article in today’s Sunday Times, Sun, Aug 9, p13, by Brian Carey on details surrounding a land deal that NAMA at some stage may become involved in. This was a land deal in which investors hoped to make a profitable investment in a residential property development at Woodbrook, Shankhill, Co Dublin.

“investor group assembled by Davy, the stockbroker, that provided €52m to help Joe O Reilly’s CastleThorn buy a 52 acre site for €160m”

“the real profits of the then thriving property market were earned by those who got in at the start – before planning permission. The earlier the investment was made, the larger the reward”.

“The Woodbrook site undoubtedly has potential. But the land is unserviced. It is not envisaged that planning will be applied for until the middle of next year, a planned Dart station on the site now looks fanciful and progress on access to foul drainage is described as slow. There is also a question mark over access to the water mains.”

“In its latest communication to investors, Davy says  “it seems likely” there is “a reasonable prospect” the loans associated with the Woodbrook lands, a total of €144.6m split equally between Allied Irish Banks and First Active, will end up in the National Asset Management Agency(NAMA).”

“This is raw development land, yet for the investors to have a brass cent of equity, its value would have to rise to more than €3m an acre”

One investor in the scheme can’t gain access to accounts surrounding the scheme.

“Davy says investors will be updated again once the NAMA legislation is published””

Is NAMA a cushion to save the banks their losses in such high risk investments? Is there more benefit to the tax payer than to the banks in stepping in to cushion the banks against these high risk losses.

Is there advantage to be got by way of public transparency in an open enquiry into the financial vehicle used to fund this investment, to ensure against irregularities, so that the rules of engagement for this hedge fund type investment can no longer be possible in the future, that investments of this type be regulated under adequate financial and legal guidelines?

Make up your own mind?

rgds

 

Colm

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