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Senator Alex White:    Amend it then.

Senator Mark Daly:    If you are going to come into this House——

Senator Alex White:    Through the Chair.

Senator Mark Daly:    ——you should at least say “two months”.

Senator Alex White:    Through the Chair.

Senator Mark Daly:    As Senator Leyden said, we should make declarations about this and I, as an auctioneer, was involved in selling section 23 properties.

Senator Shane Ross:    Shame.

Senator Mark Daly:    I felt at the time that some of these tax exemption sections were quite good, such as the section dealing with nursing homes, but the holiday home exemptions went on for too long. Senator Ross is right about that. They should have been closed off in many areas.

In my home town there were a number of planned developments and we were lucky they did not go ahead. If, however, the section was taken out, people who rented out a business such as a shop using section 23 relief to shelter the income from the shop would now be in a situation where the rent from the shop would no longer be sheltered and they would have to use what was left from the after tax income from the shop to pay off the section 23 mortgage because none of the section 23 properties would provide any income, not even enough to pay off management fees. We would then be left with a situation, especially for section 23 holiday homes, where the estates would not be managed properly because there was no income and they would deteriorate.

I agree with the thrust of the recommendation but it is a shame the Labour Party did not allow for more time, perhaps three months. The idea is good and the Minister is looking at the situation. I raised concerns previously about the selling off of these estates. There was a case in Kenmare where the auctioneers were involved in a fire sale. The Irish Examiner property supplement published a headline reading “Fire sale in Kenmare”. The auctioneers were telling their friends they should buy these because they are bargains. Auctioneers are supposed to achieve the maximum price, not sell bargains. The loans were held by Anglo Irish Bank — the taxpayer — which told the receiver to maximise the value of the properties, who then told the auctioneer to sell the property and the auctioneer told his friends they were bargains. They were selling them below the market rate. We told those auctioneers they were selling below the market rate, that we had sold six similar properties in the last six months and we estimated that the price being asked would cost the taxpayer €1 million.

Senator Paddy Burke:    How does Senator Daly know the market value?

Senator Mark Daly:    If that loss were extended to cover other fire sales in similar properties, including section 23 properties, the cost to the taxpayer would be in the hundreds of millions, if not billions, of euro. If section 23 relief is withdrawn unilaterally, there will be a double crash.

I raised a related point during the week that NAMA was not following the legislative provisions in the selling of properties under its control. It is not even following the code of conduct for State bodies. When it comes to the sale of section 23 properties and other properties by liquidators, we need transparency. Legislation provides for that but NAMA, in the case of numerous properties being sold on its behalf by the banks, is not following the provisions laid down. People have come to me disgusted that the guys who had borrowed the money originally are buying back their own debt for 50% or 75% less, knowing well that the properties were undervalued. I will speak against my profession in this regard. The valuers undervalued the property initially, because most of their valuations were desktop valuations. They undervalued it and the banks took a haircut of 40%. In the case I came across the original loan was €12 million and the haircut was €6 million, while the actual value of the property was €9 million. The developer went back and arranged for a buddy to buy the property at the haircut price of €6 million and sold it on for €9 million, costing the taxpayer.

An Cathaoirleach:    We will be debating this until 12.30 with the way Senators are making speeches.

Minister for Finance (Deputy Brian Lenihan):    The Senator should supply the details of that transaction to NAMA.

Senator Mark Daly:    I will.

Deputy Brian Lenihan:    The Senator has not done so to date.

Senator Mark Daly:    I have not. I am not an investigator, but NAMA is not following the code of conduct. It says it does do not have to. Transparency is the key factor in this matter, but NAMA is not following the code of conduct.

Deputy Brian Lenihan:    The Senator is under privilege in this House, but he should provide whatever information he has.

Senators:  Hear, hear.

Senator David Norris:    The Senator is a public representative. He should name and shame.

Senator Jerry Buttimer:    The Senator should give the Minister the information.

Senator Mark Daly:    As I am not a member of the Garda, I cannot do that. When I have information of wrongdoing, I will put it before somebody.

Deputy Brian Lenihan:    The Senator has not suggested wrongdoing, just bad commercial practice.

An Cathaoirleach:    We are on recommendation No. 1. The Senator has made his point well.

Senator Mark Daly:    NAMA has turned around and said it does not have to follow the code of conduct for the sale of State assets. I maintain these are State assets because we provided the money. NAMA owes us the money. I do not care whether NAMA follows the code or not, but there is no transparency and there are bad practices going on. I do not want to be doing a post mortem here in a year’s time when it has cost the taxpayer hundreds of millions of euro.

Senator Alex White:    For all his intelligence and expertise, I will not take it from Senator Cassidy that these things are good things. Even he must agree there must be limits. Senator Daly agrees. Perhaps I was a little harsh on Senator Daly on the technical issue of a one month period. I did not appreciate fully what he was saying.

Senator Mark Daly:    That is fine. Senator White is forgiven.

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