An intriguiging High Court action which featured allegations that a leading Kildare businessman used his political “connections” to secure favourable treatment from NAMA was settled in the High Court in late October.
The judicial review application taken against NAMA arose from a dispute over valuable development lands at Straffan jointly owned by retired developer, Martin Flattery, and prominent Kildare auctioneer, Arthur French, before their bank loans were taken over by the agency.
Affidavits sworn by Flattery contained detailed and sensational claims of political interference based on comments allegedly made to him by French.
Flattery’s lawyers argued that NAMA had acted in bad faith by refusing to complete a deal for the sale of the lands to Flattery in an ‘off market’ deal earlier this year and that there was improper interference in the negotiation process. The case was settled and the application dismissed when the parties appeared before Judge Michael White in late October.
This meant that the various, and sensational, claims by Flattery against NAMA and French were not tested in court and remain hanging in the air. NAMA did not reply to Flattery’s explosive affidavit but instead has bundled the €25m loans into a larger portfolio and intends to place them for sale.
Flattery, from Knockaulin, Leixlip, County Kildare had – before agreeing the recent, confidential, settlement – sought to regain control of the 35 acres of lands which were originally funded by Irish Nationwide Building Society, and to quash NAMA’s attempts to sell them. In the affidavits, he asserted that French claimed, after their business partnership collapsed, that he had “connections in high places” and a “close relationship with many high-ranking politicians in Fine Gael” which he allegedly used to secure favourable treatment from NAMA. Of course Village has no reason to believe the truth of any alleged such claims.
The valuable assets, which include the Straffan land and a four-bedroom property in the exclusive K Club, were transferred to NAMA in 2011 and Flattery claimed that he has since submitted no less than ten business plans to the Agency in his effort to buy and develop them. His son, Fergal, unsuccessfully made a €3.5m offer in November 2014 through his house building firm, Mulberry Properties.
Flattery claims that he was subsequently informed by French that he had used his “connections” to ensure that any proposals made by the developer for the lands would be rejected.
In December 2015, NAMA called in the loans and threatened to appoint a receiver and, days later, rejected yet another proposal by Flattery to develop the site. After further legal proceedings Flattery settled the case in early 2016 on the basis that he would be allowed to make a competitive bid for the lands.
Through his solicitor, Graham Kenny, he complained to NAMA that while he was being put under severe pressure, his former partner French had been permitted to keep his “luxurious K club residence and his lucrative auctioneering business, yet was not paying anything off his debt”. He was informed that French was still a debtor of the agency but received no explanation of the nature of its arrangement with the auctioneer.
Notwithstanding his ongoing engagement with senior NAMA officials, Flattery alleged that at a meeting in the Ryevale Tavern in Leixlip last year, French told him that he would not be given an opportunity to develop the Straffan site.
Flattery and Mulberry then bid €6.02m for the Straffan site but, again, this was rejected as an undervaluation of the landbank. A higher offer matching a valuation by DTZ Sherry Fitzgerald of €6.9 for the lands was also rejected. In a letter in March this year, the agency said that it did not wish to breach its policy of not doing off-market sales. This, despite the fact that NAMA had engaged in discussions with Flattery and his son for an ‘off market’ sale.
NAMA then disclosed that it had an unsolicited bid, from a different buyer which was in excess of Flattery’s offer, despite the fact that the site had not been advertised and had no ‘for sale’ sign on it. Again, Flattery suspected that people with more powerful “political connections” were attempting to obtain the lands from NAMA.
Flattery initiated the latest judicial review proceedings on the basis that he had been the victim of unfair procedures by the agency, which provided no detailed or evidential reply to his dramatic claims
When the parties convened on Thursday 27th October, lawyers for Flattery and NAMA hammered out a settlement which, although confidential, apparently allows the agency to proceed with its sale of the lands by a receiver as part of a larger portfolio.
Arthur French owes €50m to IBRC following a series of loans from Michael Fingleton’s Irish Nationwide Building Society and property and land purchases in Dublin, Kildare, Galway and Two Mile Borris in Tipperary. As of 2012 ten of his properties were in NAMA. The Sunday World reported that he had “cashed in around €10m of successful property developments in the last three years but has failed to pay any of what he owes to the State”.
Arthur French was not a party to the action and therefore was not required to answer the assorted claims in Flattery’s colourful affidavit.
Contacted by Village, French described Flattery’s claims as “absolute nonsense”. He said he was not represented in the High Court and did not know what happened at the latest court hearing. French denied Flattery’s claim that they met in the Ryevale Tavern in Leixlip last year.
“I wasn’t in the Ryevale Tavern for years so I couldn’t have said anything like that to him there. I never said any such thing about high- level connections. I cannot comment any more than that”. The auctioneer said that he is still dealing with NAMA in relation to his property debts.
French has enjoyed close relations with the rich and powerful given his decades long association to the K Club and its wealthy owner, Michael Smurfit.
A former captain at the club, French once advised another famous member and former finance minister, Charlie McCreevy, when he was settling into his lavish home on lands at Sallins, county Kildare which was built in the 1990s by the up-and-coming developer, Sean Dunne.
Dunne also acquired a luxurious K club property and he famously stored his art collection (including a portrait of Michael Fingleton) and other memorabilia there before it was raided by Chris Lehane the administrator of the developer’s bankruptcy who seized the lot in 2014.
In 2006, then EU Commissioner, McCreevy, obtained a €1.6m loan from Irish Nationwide to buy a luxury apartment in the K Club.
Sean Mulryan, a former partner of Dunne in Zapi Ltd. which developed the massive and controversial Charlesland development in Greystones County Wicklow, has also been a K Club property owner.
The K club was the venue for the Ryder Cup in 2006 after Rupert Murdoch managed to secure the global, hugely lucrative, broadcasting rights for his Sky Corporation with the blessing of the government, then led by Bertie Ahern. In 2003 a spokeswoman for Bill Clinton denied a claim by Mr French that the former US President had shaken hands on a deal with him and expected him to be taking over a new duplex home later that summer: “It’s not true. He has not bought nor has he any intention of buying a house or condominium in Ireland”. He had apparently been dissuaded by his security advisors. Talk about connections.