The National Asset Management Agency has begun an investigation into a transaction by a former employee who bought a property from the agency's portfolio.

The former employee at the centre of a controversy has told RTÉ that he was told by his employer that there were no compliance issues with such a purchase as long as it was his main home.

Enda Farrell bought a house in Lucan, Co Dublin in 2011 for €410,000. He was a portfolio manager at Nama at the time, and worked as part of the team managing due diligence for loans coming from banks.

A spokesperson for Mr Farrell said he had asked the NTMA's Head of Compliance in July 2011 about the possibility of acquiring a NAMA property.

He said he was told there was no issue as long as it was his principal private residence.

Mr Farrell's spokesperson said Mr Farrell did not alert NAMA senior officials or NAMA’s head of compliance either before or after he acquired the specific property in Lucan.

Mr Farrell left Nama in January 2012, one month after the property sale closed in December 2011.

The spokesman also said Mr Farrell did not tell the seller that he worked for NAMA.

NAMA has asked its internal auditors, Deloitte, to investigate the transaction.

The internal auditors are requested to assess whether the full statutory and disclosure requirements were adhered to.

NAMA says that based on an initial review and on independent valuations, the price for the property was in line with the then market value.

It also said the employee was not involved in approving the transaction.

NAMA says all employees are required to make full disclosures of their assets, liabilities and interests under legislation governing the body.

Fianna Fáil finance spokesman Michael McGrath this afternoon said that gardaí should open an investigation into the transaction.

Mr McGrath said that the transaction has exposed the agency to the most serious allegations about how it does its business.