Labour Finance Spokesperson, Joan Burton TD, has raised concerns about the Special Purpose Vehicle (SPV) that will carry out NAMA’s operations, during the continuing committee stage debate on the NAMA Bill.

‘Last week we heard, through Eurostat, of a scheme whereby NAMA will execute its functions through a series of Special Purpose Vehicles, including a so-called ‘Master SPV’. This Master SPV will be majority-owned by private investors, who will contribute 51% of the €100m equity’

This SPV scheme is supposed to have the purpose of ensuring that NAMA does not form part of the Government’s Balance Sheet, and would appear to have been constructed with that purpose in mind.

It is quite simply extraordinary that the original NAMA Bill could have been published in July, and have reached Committee Stage in the Dáil without this SPV architecture being set out in detail by the Minister. The Dáil was not told of this scheme, even though CSO officials were seeking an opinion from Eurostat on it as long ago as July.

While the Minister has today supplied a briefing note on the NAMA SPV, serious questions remain as to its legality and how it will function. Specially, we need to know

Who does the Minister believe will subscribe the private equity for the Master SPV?
Who does the Minister believe will be appointed to the Board of the Master SPV by the private investors?
Will the Minister have any influence on who is appointed by the Private Investors?
Will the Private Investors have influence over which developers are pursued by NAMA?
Will the private investors be able to prevent the SPV issuing bankruptcy proceedings against any particular developer?

There are also questions as to the compatibility of this structure with the NAMA Bill that is currently being debated by the Dáil, as follows:

Under the Bill, the function of any NAMA group entity is to perform NAMA functions, on NAMA’s behalf. This is not consistent with the idea of a majority private sector SPV, as outlined by the CSO in its submission to Eurostat.

The provision for a final payout out to private sector investors of a share in the profits on the dissolution of the SPV seems directly to contradict section 58 (3) of the Bill: “The assets of NAMA and of any NAMA group entity at the eventual dissolution of NAMA will be transferred to the Minister or 40 paid into the Exchequer as the Minister directs”.

It is not clear how Section 56 of the Bill, dealing with accountability to Dáil Public Accounts Committee is compatible with the presentation of the SPV as a private sector investment vehicle falling outside the General Government Sector.

Quite frankly, it is extraordinary that issues like this, which are fundamental to the day-to-day running of a €54 billion operation could be introduced as such a late stage, and with so much uncertainty hanging over the detail.