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Nama: £1 billion deal for Northern Ireland loan book illegal if 'fixers' wrongly involved, court hears

Published 21/09/2015

Belfast businessman Gareth Graham is a director and major shareholder in property companies which own a variety of commercial and residential premises
Belfast businessman Gareth Graham is a director and major shareholder in property companies which own a variety of commercial and residential premises

A £1 billion deal for Nama's Northern Ireland loan book would be rendered illegal if any third party "fixers" were wrongly involved, the High Court heard today.

Counsel for Belfast businessman Gareth Graham told a judge investigations into the sale to US investment fund Cerberus are underway in three different jurisdictions.

Referring to claims that a £7m fee was to be paid out as part of the transaction, Monye Anyadike-Danes QC said: "If it turns out that these agencies uncover illegal transactions then that taints that sale."

She also raised concerns about alleged meetings between Cerberus and administrators in a disputed process to sell one of the repossessed Graham properties.

Mr Graham is a director and major shareholder in property companies which own a variety of commercial and residential premises in Belfast.

The firms' loans were among those transferred over to Nama, the Irish Government's so-called 'bad bank'.

Last year Cerberus snapped up Nama's entire Northern Ireland portfolio in a deal worth more than £1 billion.

Mr Graham is locked in an ongoing legal battle over the validity of the appointment of administrators to his companies.

Contending that his businesses were financially strong and never missed a repayment, his legal team are set to claim an improper motive was involved.

With the main case not due to be heard until January, administrators acting for Cerberus are now seeking to sell the Lyndon Court building in Belfast city centre.

Their lawyers argued judicial directions issued previously only require that notification is given to the court.

But Mr Graham is opposed to the deal going through without his consent or court order.

Ms Anyadike-Danes insisted the administrators had signed up to a restraint on any sale until after the trial.

She told the court: "The context we are dealing with here is a possible illegality... any possible illegality concerning the sale of the Northern Ireland loan book to Cerberus."

Pressed by Mr Justice Horner for details, she mentioned the potential involvement of third parties in the deal.

The barrister later referred to Frank Cushnahan, a former Nama adviser who also worked for the Graham bookmaking business from 2005 to 2008.

During his period with the business he had an office at its premises, the court heard.

"In order to comply with various requirements in relation to the placing of bets telephone calls in and out were recorded," Ms Anyadike-Danes said.

"Those recordings have revealed a deep animosity between Mr Cushnahan and the Graham connection."

Earlier this month Mr Graham told a Stormont inquiry the adviser was conflicted in his Nama role because he retained shareholdings in some Graham property companies that were moved into the bad bank category.

Ms Anyadike-Danes told the court today those shares amounted to 5%.

Mr Cushnahan has rejected the criticisms made at Stormont, insisting he gave up the shareholdings in 2009.

According to his account he would only remain on the share register if Graham companies have not provided the necessary updates.

The court was also told investigations into the loan portfolio deal are now being carried out by authorities in Northern Ireland, the Irish Republic and the United States.

"One of the allegations is that there was corruption," Ms Anyadike-Danes said.

"For example, that £7m was paid to include third parties as fixers for that transaction."

She added that if any were involved, without declaring any necessary interest, "that would also render the sale illegal".

The case continues.

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