Accounts for property investor Paddy McKillen's May Property Holdings "do not give a true and fair view of the state of company's affairs" at the end of last year, according to auditors KPMG. May Property Holdings is one of 15 of McKillen's companies that challenged the right of Nama to take on its loans but KPMG made an "adverse opinion on the financial statements" of its recently filed accounts because no provision had been made against the company's €30.9m property assets.

"Published information concerning comparable properties indicates very significant reductions in value have been experienced. In our opinion, these circumstances indicate that provision should be made for impairment in value… The effect of its omission is likely to materially overstate the carrying value of the company's fixed assets and understate its losses for the year and retained earnings at 31 December 2009," KPMG said in its auditors report.

McKillen's Supreme Court appeal, which is trying to prevent the proposed transfer of about €2.1bn of loans from the property investor and his companies, began last week. He was roundly defeated in his previous High Court challenge.

His counsel Michael Cush said the value of the properties on which the loans are secured, after the clearance of mortgages and other encumbrances, are about €200m now. He claimed because Nama is a "work-out vehicle", and would seek to sell either the properties or the loans in a shorter time frame, it would act contrary to McKillen's business model of long-term investment. It also breached McKillen's constitutional rights.

The accounts for May Property Holdings show it had a shareholders' funds deficit of more than €273,000. Its financial fixed assets include ownership of companies Metrospa, Submitquest and Directdivide Trading which are also involved in the case against Nama.

It also owns Powerscreen Indo-China, which invested in a quarry. Accounts for the company show that its financial fixed assets had cost just under €4.76m but were valued at nil by its directors.