Paschal Donohoe dismissed allegations a partly state-owned financial institution knowingly loaned almost €10 million to a company that was acting as a front for a property developer in debt to Nama.
The company used this funding to finance a site in Donohoe's constituency.
Donohoe’s parliamentary adviser and constituency office manager, who was said to be “taken aback” at the allegations of impropriety, began investigating in late 2021 after the then finance minister received a letter from a whistleblower concerning the loan to the company.
The Department of Finance didn’t however act on the claims and Donohoe later signed off on a €1 billion deal between Bank of Ireland and the financial institution concerned.
Criminally convicted An Bord Pleanála ex-board member Paul Hyde controversially failed to impose a €750,000 development contribution levy on a planning permission decision for the same site after the company bought it.
Favourable treatment from An Bord Pleanála and €9.5 million from Finance Ireland
In April 2017 newly formed company EWR Innovation Park Ltd bought a formerly state-owned site in the Dublin Docklands for €5.6 million. The company bought the land from the Bolton Trust, a charity founded by former DIT (now TUD) staff, which was in financial difficulty.
Edward McHugh, general manager of Galway-based medical manufacturer Dawnlough Ltd, according to his LinkedIn account, was registered as the sole owner of EWR. A Times Irish edition report at the time of the purchase called him “a low-profile Galway businessman”.
Henry Cleary, a former member of the Fianna Fáil Ard Comhairle and once chairperson of the Galway Race Ball, acted as an intermediary in the sale.
Cleary, a member of the Barclay’s Ireland executive committee and head of the bank’s property financing department, is McHugh’s brother-in-law and first introduced him to the Bolton Trust.
McHugh financed the purchase with a €6.5 million loan from a separate company before refinancing with the partly state-owned non-bank lender Finance Ireland in 2019.
EWR’s latest CRO filings show the company owes creditors almost €9.5 million, with Finance Ireland holding a charge over all the company’s present and future assets.
EWR has enjoyed favourable treatment from disgraced ex-Bord Pleanála Fine Gael appointee Paul Hyde who presided over several controversial decisions concerning the Dublin 3 site.
It first received permission for a strategic housing development on the site, though this was ultimately quashed by a High Court ruling after a judicial review. The planning authority also allowed the company to value the site at more than three times the price paid for it just three years previous, as reported by The Ditch. Had the development gone ahead, EWR would’ve been paid an extra €1 million-plus by the council for legally required social housing units. Another Ditch story reported that ABP failed to collect €750,000 in statutory fees it should’ve collected as a requirement for the development to proceed.
Questions as to whether McHugh is the site’s true owner have persisted.
An Irish Times report in late 2023 detailed how property developer Christy Dowling, whose companies remain indebted to Nama and the Irish Bank Resolution Corporation, was named as the site’s owner in early planning documentation. He’s a co-owner of the Newlyn Group of companies, which had €22 million in loans transferred to Nama in 2011, with a charge to the institution remaining on Newlyn’s books.
Dowling also directs the Vestry Limited Partnership, which – as reported by The Ditch – had bought more than 1,000 second-hand Irish properties in a three-year period by this stage last year.
Court documents for other proceedings related to the site outlined how Dowling regularly represented himself as the site’s owner. McHugh for his part denied these claims by Dowling, going as far as swearing a High Court affidavit that said Dowling had no interest in the site.
Just more than 18 months after McHugh had refinanced the site with €9.5 million from Finance Ireland – in which the Ireland Strategic Investment Fund (ISIF), the country’s sovereign fund holds a 32 percent stake since 2016 – a whistleblower engaged the financial institution with allegations that it had knowingly loaned to a front.
The whistleblower also went to Paschal Donohoe – then minister for finance and a TD for the constituency.
Was Nama aware?
In the first week of November 2021 a letter was delivered to Donohoe.
The letter had also been delivered to Finance Ireland CEO Billy Kane about a fortnight before on 22 October.
The letter was sent by a whistleblower who referred to themselves as being “a taxpayer who funds Nama, and also funds Finance Ireland through ISIF”. They were “struggling to understand Finance Ireland’s conduct in this matter”.
The letter raised questions about Finance Ireland’s relationship with EWR. It asked whether the institution had investigated whether Christy Dowling was the beneficial owner of the site.
“Did Finance Ireland take satisfactory steps to establish the identity of the beneficial owner of the site at Docklands Innovation Park in light of… information that is publicly available on the planning record and the information that was disclosed in the course of the recent High Court case?”
The letter further asked if Nama, to whom one of Dowling’s companies remained in debt, knew about the deal.
“Were Nama aware that Mr Christy Dowling, who is a director and shareholder of a company over which the public record shows Nama holds a charge… is also recorded in planning files as owner of the property at Docklands Innovation Park?”
The letter also asked whether the terms of the deal seemed credible.
“It is on the public record that a private financial institution, Finance Ireland, provided a property-backed loan of almost €10 million to a company with €100 equity and that the loan is secured against a site that was purchased for €5.6 million two years previously. Why are the savings of Irish pensioners being used to support this type of lending, and what social good is achieved by it?”
‘Ray was taken aback’
After Donohoe had received the letter, Ray McAdam, a longtime ally of the finance minister, contacted the sender.
McAdam – a Dublin city councillor and currently the chair of Dublin City Council’s Planning & Urban Form Strategic Policy Committee – is a parliamentary and policy adviser to Donohoe, as well as the manager of the Dublin Central TD’s constituency office.
During the Covid-19 pandemic, on 9 November, 2021, McAdam and the whistleblower had a Zoom meeting in which the pair spoke about the letter’s content. The whistleblower’s contemporaneous notes state, “Ray was taken aback at the extent of the alleged impropriety and that it was much worse than he had expected.”
Following the meeting the whistleblower heard from neither Donohoe nor anyone in the department. Soon after however Edward McHugh, whose ownership of the site had been called into question, offloaded part of his shareholding.
Just two weeks after the letter had been delivered to Donohoe – and Donohoe’s assistant and party colleague McAdam had investigated the matter – McHugh transferred half of his EWR shares to Christy Dowling’s wife, Hilary Ward.
The Ditch asked Ward about her shareholding on the phone today.
“Sorry, I’ve got no comment to say. I don’t know what this is about or anything like that,” she said.
“You own half of a company called EWR Innovation Park,” said The Ditch.
“Sorry, I don't have any interest in this conversation. I'm actually in the middle of work at the moment so I can't take this call. Thanks for calling. Bye,” said Ward.
Donohoe, having failed to act on the whistleblower’s concerns about Finance Ireland, would later sign off on a billion euro deal involving the institution.
In May 2022 – a year and a half after Donohoe was first made aware of concerns with Finance Ireland – the institution was chosen as one of just two non-bank lenders to have €1 billion in funding from the Bank of Ireland made available to it.
After the Competition and Consumer Protection Commission recommended the deal as part of Bank of Ireland’s takeover of KBC Ireland’s mortgage book, Donohoe, as finance minister, signed off on it.
By February of last year Finance Ireland had drawn down €177.6 million as part of the scheme.
A Nama spokesperson said, “Nama cannot treat your request for comment as a legitimate media request.”
Donohoe, Dowling, McHugh, McAdam and Finance Ireland didn’t respond to requests for comment.
