herald

Sunday 11 December 2016

Ex-NAMA advisor ‘stood to make millions’ on proposed sale of loans

Frank Daly Chairman of NAMA arrives for a Public Accounts Committee Meeting at Leinster House on Kildare Street, Dublin
Frank Daly Chairman of NAMA arrives for a Public Accounts Committee Meeting at Leinster House on Kildare Street, Dublin

A FORMER member of NAMA’s Northern Ireland advisory board stood to make  Stg£5m in fees from the proposed sale of the loans of Northern Irish debtors,” the Dail Public Accounts Committee has heard.

The hearing was told global investment management firm PIMCO was to pay Stg£15m in acquisition fees, with a third of these set to go to former NAMA advisor Frank Cushnahan.

Mr Cushnahan had been a member of NAMA’s Northern Ireland advisory board until late 2013.

NAMA chairman Frank Daly told the committee that PIMCO informed it in March 2014 of the proposed fees. These included proposed payments to Belfast law firm Tughans and to Mr Cushnahan.

Mr Daly said that after receiving the information, NAMA’s board decided PIMCO could no longer be a bidder for the loan portfolio as “the proposed fee arrangement could undermine the integrity of the sales process”.

The loan portfolio, relating to around 850 properties, was subsequently sold last year to US private investment firm Cerberus for €1.6bn.

 The loans had once been valued at over €5bn.

Independent TD Shane Ross described the disclosure as “shocking” and questioned why the whole sale process wasn’t scrapped and started again.

“If we knew then what we know now, a lot of things would have worried us,” Mr Daly said.

He said Mr Cushnahan had resigned from the advisory board in November 2013 for “personal reasons”. He also insisted Mr Cushnahan, a banker who acts as a financial consultant, would not have had access to confidential information in relation to the loans portfolio.

Earlier, Mr Daly told the committee that NAMA did not come under any pressure from politicians or anyone else over its decision to sell the loans.

He also said that any alleged payments made to an account in the Isle of Man did not come from NAMA and that it received the full value of the sale.

Mr Daly said NAMA had no knowledge of the alleged payment into the Isle of Man account of solicitor Ian Coulter by a US law firm, Brown Rudnick, in connection with the sale.

Mr Coulter, then a partner at the Tughans law firm in Belfast, was involved in the Project Eagle sale to Cerberus.

COMMENTS

The comments came as the Comptroller and Auditor General, Seamus McCarthy, said he would be examining the so-called Project Eagle sale.

Independent TD Mick Wallace alleged last week that Stg£7m in the Isle of Man account was reportedly intended for a Northern Ireland politician or party. The UK’s National Crime Agency has launched a criminal inquiry into Mr Wallace’s allegations.

Tughans were retained by Brown Rudnick, which was representing Cerberus in the deal.

The committee also heard that Brown Rudnick and Tughans had also represented PIMCO, before it withdrew from the sales process.

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