Thursday 27 October 2016

Former Anglo CEO David Drumm offers video evidence to Banking Inquiry

David Drumm
David Drumm

Former CEO of Anglo Irish Bank David Drumm has offered to give evidence to the Banking Inquiry by video link from the US.

It is not yet known if this will be allowed as the inquiry’s committee has reserved their position as to whether this is acceptable.

The Herald understands that legal advice is being sought as to whether it is permissible to allow the absent former banker give testimony via video.

At the inquiry yesterday, there were other matters on the agenda for developer Joe O’Reilly whose firm may be set to buy the famous hotels site in Ballsbridge.


Amid questions from TDs and Senators, Mr O’Reilly, the builder behind Dundrum Town Centre and other major developments in Dublin, said he hopes to pay back €2bn worth of loans in full.

He said his companies Castlethorn Construction and Chartered Land have paid €600m so far to Nama and expect to pay back the principal on personal and corporate borrowings in full.

He appeared before Oireachtas members on the day it was reported that he has teamed up with a Middle East investment group in a bid to buy the former Jury’s and Berkeley Court hotels in Ballsbridge.

Joe O’Reilly’s Chartered Land is believed to have made a €155m offer for the land, with the backing of the Abu Dhabi Investment Authority (ADIA).

It is understood to be the preferred bidder for the seven-acre site for the two hotels, with the bid less than half the €380m paid for the same land by bust developer Sean Dunne in 2005.

Ulster Bank ultimately took over the site and is the seller now.

Mr O’Reilly and his businesses are among Nama’s biggest debtors. However, as the deal is being fully funded by ADIA and the property is not related to Nama, it is unlikely the bad bank would object.

There is planning permission for hundreds of apartments and a 150-room hotel but any future plans for the site have yet to be revealed.

Mr O’Reilly swept past reporters without comment as he arrived at Leinster House.

The matter wasn’t raised at the Banking Inquiry, the terms of reference of which are limited to the reasons for the banking crash and events between January 1992 and December 2013.

Michael McGrath TD asked Mr O’Reilly about the €600m that has been paid back to Nama.

The developer said it was made up of €400m actual asset repayment and €200-250m in rental cash flow for Nama from the properties.

Mr O’Reilly said the borrowings of the two companies amounted to €2bn by September 30, 2008.

Castlethorn was primarily financed by Ulster Bank and AIB and Chartered Land by Anglo Irish Bank and Bank of Ireland.

The developer blamed the crash on too much debt, too freely available to too many borrowers which led to a glut of inexperienced developers, many of whom traded with a short-term horizon.

He referred to the significant number of new developers “who lacked experience and expertise, many of whom were over-exposed to over-priced secondary assets” and that many people who became property developers seemed to be able to get loans overnight.

He said he believed the recovery in property values was most apparent in Dublin at the moment with the rest of the country lagging behind.

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