Inspection a fortune fall-down in Ireland

DUBLIN: If one man could epitomise Ireland's descent into debt, it is Simon Kelly, the developer who was worth a billion euros at the height of the property boom but now owes a cool 88 million.

Viewed as a speculator who gambled wildly on construction and left the state to pick up the tab, Kelly is a hated figure in Ireland, where voters ejected their government in February 25 elections over the collapse of their economy.

But over lunch at Dublin's Shelbourne hotel, where Kelly once did many of his deals, the 39-year-old insisted he was actually a victim of a national spending binge.

"Everyone wanted to be on the property ladder," he told AFP. "And the poor guy who didn't buy anything was missing an opportunity and was looking ridiculous."

Between 1995 and 2007, a country once reliant on farming averaged startling growth of six percent a year, driven by a property boom fuelled by generous bank lending.

At its height, the construction industry accounted for a quarter of all economic activity.

Kelly was one of the most successful developers he was responsible for the sparkling glass and steel offices on the Dublin docks among many others and by the end of 2007, his property empire was worth a billion euros ($1.4 billion).

But in reality the company owed 750 million euros to the banks and when the downturn hit, it all turned to air.

"Or just two-thirds of air," Kelly insisted. "It was like a Ponzi scheme: the first project builds a pyramid of projects. It sucked in more and more people and this went on for years.

"In the end, a point was reached where there were no new people and no new money and the collapse was the inevitable conclusion."

When his predicament became clear in early 2008, Kelly had no option but to head to court and declare that his liabilities were greater than his assets.

"I knew it was terminal," he recalled as he tucked into his lunch under the crystal chandeliers and mahogany bar of the Shelbourne dining room although he only goes there these days when somebody else is paying.

"We were bust, but we're all bust. We didn't cry. And the banks were not blaming us everyone's got the same problems, they were saying," he said. Back in 2007, Ireland was a system "built on credit", he said. "We were crazy," he admitted.

Everybody wanted a piece of the property boom and anyone who said it would not last was treated with disdain. "If you go to a casino and tell everybody they're going to lose, you would be thrown out," he explained.

Even for those who acknowledged there might be a slowdown, "we thought it would land rather than end: we thought the correction would be 10 to 15 percent", Kelly said.

In the end, property prices slumped by 40 percent. "It's nobody's fault in particular," the developer insisted.

"We're all in the same stadium. Maybe I was on the pitch and you were in the stand."

Kelly made his 'apology' to the Irish people in a book, "Breakfast with Anglo", which refers to the deals he struck with Anglo Irish Bank.

The bank sustained huge losses in the crisis and was nationalised in January 2009, a move which sent the budget deficit soaring and sparked an EU-IMF bailout in November.

Anger over the economic situation prompted voters last week to oust their traditional party of government, Fianna Fail, and elect the opposition Fine Gael, which has vowed to renegotiate the terms of the rescue loans.

Kelly acknowledged that "everyone hates me" a sentiment that was not helped by a recent court judgment that he did not have the means to pay back the 88 million euros he now personally owes.

He still earns 80,000 euros a year, but said his basic outgoings were 120,000 euros, including 27,000 to privately educate his five children.

His family still lives in a large house in Wicklow, south of Dublin, that Kelly put in his wife's name to protect it from his creditors.

"It's mortgaged," Kelly insisted defiantly, adding: "I understand people who are angry but I just fight my corner."