Belfast Telegraph

Nama inquiry: Stormont's Department of Finance will co-operate with Irish government investigation, says Mairtin O Muilleoir

Northern Ireland's finance minister Mairtin O Muilleoir has said his department will co-operate with the Irish government's investigation into Nama's €1.6bn Northern Ireland property sale.

The Project Eagle deal with US investment fund Cerberus in 2014 has been dogged by scandal for more than a year, including 8.2 million euro linked to it being found in an Isle of Man bank account.

Mairtin O Muilleoir said: "I have written to the Irish government's Finance Minister Michael Noonan telling him that I'm looking forward to receiving a copy of the report from the Comptroller and Auditor General into the NAMA sale.

"In the letter I have reiterated that my department will co-operate and work with the investigation.

"This is a matter of huge importance north and south and it is vital that we get to the bottom of the events concerning Project Eagle."

The Republic's government confirmed the Public Accounts Committee would first examine a Comptroller and Auditor General report into the affair before a formal inquiry is launched.

"The Government's objective is to ensure that all matters of public concern are addressed in a speedy and effective manner," a spokesman said.

Project Eagle involved loans linked to more than 800 properties in Northern Ireland being sold in one lot to the New York investment firm which boasts former US vice president Dan Quayle in its ranks.

Taoiseach Enda Kenny offered to meet opposition leaders on Thursday to identify areas of public concern around the deal that need to be investigated and how that should be carried out.

There have been calls for a cross-border inquiry due to the limitations of parliaments in Dublin and Belfast and their inability to compel witnesses from other jurisdictions.

Project Eagle has been examined on previous occasions at the Public Accounts Committee in Dublin.

Investigations have also been launched into the deal by the UK's National Crime Agency, the US Department of Justice's Securities and Exchange Commission as well as a parliamentary inquiry in Stormont.

Sinn Fein president Gerry Adams described the offer of an inquiry as welcome but belated.

"Sinn Fein has consistently called for an inquiry into the sale of Project Eagle and at each turn the government and Fianna Fail have bizarrely sought to frustrate and delay it," he said.

Mr Adams called for governments and statutory agencies in the north and south to give maximum co-operation to the inquiry.

Nama is the so-called bad bank set up in 2010 to take loans linked to property investments off bailed-out Irish banks at a discount.

It is on course to make a more than 1.75 billion euro profit on its deals by 2020 but has faced repeated questions over its handling of Project Eagle after Cerberus offered £1.241 billion - just £11 million above the reserve price set days before final bids were entered.

Mr Adams alleged earlier this year under parliamentary privilege that a member of Nama's Northern Ireland advisory board offered to disclose information on the value of the portfolio to one bidder, US investment house Pimco, and demanded a £15 million fee.

Nama chairman Frank Daly has insisted the Eagle deal was not corrupt and that taxpayers got value for money.

Project Eagle was valued by Nama at 27p in the pound, with some assets worth as little as 5p in the pound.

The Comptroller and Auditor General found Nama has losses of £162 million on deals linked to Northern Ireland properties, the vast majority from Project Eagle.

Its audit found the deal was worth £1.137 billion - with Nama having paid about £2 billion for the loans.

The C&AG said there is no indication that Nama had considered a bulk sale of its Northern Ireland assets until US law firm Brown Rudnick wrote on behalf of US investment fund Pimco in June 2013 offering an exclusive deal.

It found that two of Nama's valuations of its Northern Ireland loans in late 2013 and early 2014 underestimated their value.

The C&AG report also noted that Pimco withdrew from the bidding war in March 2014 after it told Nama about a "proposed success fee arrangement" involving Brown Rudnick, a Belfast law firm called Tughans, and a former member of Nama's Northern Ireland Advisory Committee.

The £7 million subsequently discovered in the Isle of Man was in an account controlled by a former managing partner of Tughans, Ian Coulter, who resigned after it was unearthed.

Tughans, which acted as a subcontractor for Cerberus's US lawyers, Brown Rudnick, insisted it was not aware of the transfer and all parties involved in the 2014 transaction have denied wrongdoing.

The C&AG found Nama dropped its reserve price in late March 2014 to £1.23 billion and on April 1 that year Cerberus offered £1,241 million and the only other bidder, Fortress, offered £1.075 billion.

In Northern Ireland, Stormont First Minister Arlene Foster called for maximum transparency over the deal and argued that the National Crime Agency (NCA) probe should take precedence north of the border.

Deputy First Minister Martin McGuinness backed calls for a cross-border investigation.

"I think there is an unstoppable argument in the south for a very intensive investigation and of course many of us are arguing that is a much more effective investigation if it's done on an all-island basis," he said.

Seven things you need to know about the C&AG report on NAMA

There are just seven things you need to know about the report by the Irish government's taxpayers’ watchdog, the Comptroller & Auditor General, on the National Assets Management Agency. John Downing guides you through the maze of acronyms and jargon.


Don’t be phased by the “alphabet soup.”  NAMA is the National Asset Management Agency, a body set in 2008 by the late Irish Finance Minister Brian Lenihan to manage the Irish banks massive bad loans and the grossly over-valued property portfolios acquired by borrowers for exorbitant sums. NAMA’s job was to get the loans and properties as cheaply as possible and sell them for as much as they could get to cut taxpayer losses.  The Comptroller & Auditor General (C&AG) is the taxpayers’ watchdog who looks into how public money is spent and whether citizens get value.





At issue is the gigantic book of loans on properties in Northern Ireland called “Project Eagle.”  These properties had an original face value of €5.7bn and were eventually sold off in 2014 to the US vulture fund, Cerebus Capital Management. The Irish government has always argued that NAMA’s work, selling off indebted properties, means it had to be very secretive. This probe by the C&AG is very extensive, probably the biggest outsider look-in on NAMA’s workings. Some 40,000 documents were trawled from NAMA files.




A huge question raised by the C&AG is why NAMA sold the Northern Ireland portfolio in one single block. Previously, it tended to split things up and sell them off over time. This was a “big bang,” which the C&AG says, cost Irish taxpayers “hundreds of millions.” NAMA looked at splitting things up, according to property type or individual debtors.





NAMA say they opted for a one-off sale because of legal complexities dealing in another legal jurisdiction and deteriorating relations with debtors. NAMA also hugely contests the C&AG finding that it lost taxpayers “hundreds of millions.” They contest the calculations used to back the C&AG arguments. This is complex stuff based around valuation methodologies and other formulae.




The C&AG deals with questions around the bidding process itself which NAMA insists was always competitive. Three of the firms expressing interest pulled out. One firm said they were pulling out because another US consortium, PIMCO, got unfair advantage. PIMCO had been the first firm to approach NAMA proposing a big block buy. The firm was later excluded from the process.





The C&AG are concerned about potential conflicts of interest. A member of the NAMA’s Northern Ireland Board, Frank Cushnahan, was advising seven of the debtors who had 50pc of the loans involved. He also at one stage advised PIMCO. There are big questions around this.





We don’t know what form the Irish government's inquiry will take. But we do know it will be tip-toeing through a minefield. There is the cross-border element with much of the action happening in British legal jurisdiction. There are a number of other inquiries also going on. It will take a lot of work, time and expense to get a result.

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