Belfast Telegraph

UK Website Of The Year

Frank Cushnahan was set to make £5m from Nama property deal, TDs told

By Adrian Rutherford

Published 10/07/2015

Nama chairman Frank Daly (left) and chief executive Brendan McDonagh arrive to give evidence at the Dail yesterday
Nama chairman Frank Daly (left) and chief executive Brendan McDonagh arrive to give evidence at the Dail yesterday
Frank Cushnahan
Ian Coulter

A top Nama official said he was appalled after learning how a former adviser stood to gain £5m from the sale of its Northern Ireland assets.

Frank Cushnahan became involved in a bid for the portfolio in January 2014 - two months after resigning from his role with Nama.

It was claimed yesterday that the businessman was due a slice of £15m in "acquisition fees" linked to a bid from Pimco, a US-based global fund manager.

Ian Coulter, at the time a managing partner of Belfast law firm Tughans, was also in line for a share of the fees, a Dail committee heard in Dublin.

The explosive allegations mark another twist in the controversy over the £1.3bn fire sale, dubbed Project Eagle - the biggest property deal in Northern Ireland's history.

On another day of dramatic developments:

  • Nama officials insisted political pressure had not influenced the sale of its Northern Ireland assets, saying the deal would stand up to scrutiny;
  • It emerged Nama made a net loss of £280m on the sale - although officials stressed they got the best deal possible;
  • Nama said officials would not appear before Stormont's finance committee, leading to claims of a "total disregard" for MLAs;
  • First Minister Peter Robinson was accused of going on a solo run over a letter sent to Nama asking Northern Ireland debtors to be released from personal guarantees on loans;
  • Mr Robinson's son Gareth said his PR firm had no involvement in the Nama sale;
  • The DUP was facing questions over its links to Mr Cushnahan;
  • The National Crime Agency said it would lead the investigation into the growing scandal.

Yesterday's Public Accounts Committee meeting in Dublin heard startling new allegations about the role of Mr Cushnahan.

He was appointed Northern Ireland adviser to Nama on the recommendation of former DUP Finance Minister Sammy Wilson.

The businessman has held a series of executive and non-executive positions in the public and private sectors in Northern Ireland.

He was chairman of the now defunct East Belfast maintenance firm Red Sky.

Mr Cushnahan was due to serve on the advisory committee until April 2014, but stepped down early in November 2013. His resignation letter, read to the committee, cited personal reasons, including the fact that he "wasn't getting any younger".

Nama chairman Frank Daly said he heard in March 2014 about a fees arrangement.

"There was a subsequent piece of information which came to us that indicated there was a fee of £15m to be split three ways - between (US law firm) Brown Rudnick, Tughans - the managing partner of Tughans - and Frank Cushnahan," he said.

"That was after Pimco had exited or had been exited by us."

Mr Daly said Nama officials were "appalled", adding: "Our real concern was the involvement of, or alleged involvement [of Mr Cushnahan]."

But he insisted Mr Cushnahan had not gained any insider knowledge of the portfolio from his time with Nama.

Mr Daly confirmed Mr Cushnahan had the use of an office at Tughans.

He said he was not specifically worried by this, but told TDs: "If we knew then what we know now a lot of things would worry us, but at that time it didn't worry us."

Nama - the Republic's bad bank - was set up to clear large property and development loans from the country's bailed out banks. Its Northern Ireland portfolio, comprising about 850 assets, was sold en masse to Cerberus Capital Management in April 2014.

The deal was thrust into a political storm last week after allegations levelled in the Dail by independent TD Mick Wallace. He revealed the existence of a bank account in the Isle of Man, containing up to £7m to be paid to so-called fixers and influencers behind the deal, being operated by Mr Coulter.

Tughans said Mr Coulter diverted the money without its knowledge. He left the practice and the money was retrieved.

Mr Wallace has alleged the £7m had been earmarked for a politician.

Yesterday Mr Daly insisted political pressure had not influenced the Nama deal.

"The Nama sale process for Project Eagle was robust, competitive - right to the end - and secured the best outcome for the Irish taxpayer," he told TDs.

He added: "No pressure from any source, political or otherwise, influenced Nama in regard to the decision to sell the loans of Northern Ireland debtors or the decision to accept the winning bid from Cerberus."

Mr Daly said the £7m found in the off-shore account did not come from Nama.

It also emerged that a second US bidder was involved in the final negotiations for Nama's Northern Ireland loan book.

Fortress Investment Group, based in New York, offered £1.1bn for the assets.

Mr Daly rejected claims of a £3bn write-down in the price Nama secured from the sale.

He referred to reports that the assets were sold for £1.3bn - less than a third of their £4.5bn face value.

Mr Daly said: "Nama sold the assets for exactly what they were worth and not a cent less.

"The assets may - years earlier - have been worth more but the fall in their value was a result of the property crash and they were not worth anything more than the price Nama achieved when sold by Nama."

Timeline

  • June 2013: Nama first becomes aware of investor interest in purchasing its Northern Ireland portfolio after the Irish finance minister, Michael Noonan, passes on a letter from his Stormont counterpart, Sammy Wilson
  • September 2013: Nama learns that Pimco, a US investment firm, is interested in securing the assets after an approach via law firm Brown Rudnick
  • November 2013: Frank Cushnahan steps down as a member of Nama's Northern Ireland advisory committee
  • January 2014: Nama receives what is later dubbed a proposed debtors' charter from the principal private secretary to First Minister Peter Robinson
  • March 2014: Pimco informs Nama that its compliance staff have discovered Pimco's proposed fee arrangement with Brown Rudnick, and the payment of fees to Mr Cushnahan and Ian Coulter, then a managing partner at Tughans. Pimco withdraws from the Project Eagle process, and it eventually comes down to two bidders
  • April 2014: Bid from Cerberus Capital Management accepted by Nama's board
  • July 2, 2015: Independent TD Mick Wallace uses Dail privilege to allege £7m contained in an Isle of Man bank account was earmarked for a politician in Northern Ireland
  • July 6, 2015: PSNI confirms that, fours days after Mr Wallace's claims, it is still not investigating the matter. TUV leader Jim Allister says he is "amazed"
  • July 7, 2015: Law Society calls for evidence about the sale of Nama's Northern Ireland portfolio to be given to police
  • July 8, 2015: PSNI confirms it has launched a criminal inquiry into the sale of Nama's Northern Ireland property portfolio
  • July 9, 2015: Details of the fee allegedly to be paid to Mr Cushnahan emerge during a meeting of the Dail's Public Accounts Committee. Separately, the National Crime Agency says it will lead the investigation into the purchase of Nama's Northern Ireland loan book

Belfast Telegraph

Read More

From Belfast Telegraph