Belfast Telegraph

NAMA sale advisor treated like an 'eejit' and a 'patsy', TDs told

By Niall O'Connor

The international firm that advised NAMA on the sale of its Northern Ireland loan book was treated like an “eejit” and a “patsy” prior to the €1.6 billion property transaction, the Public Accounts Committee (PAC) has heard.

Lazard, seen as a key player in the sale of Project Eagle, was “kept in the dark” in relation to details that were potentially highly significant to the sales process.

The allegations were made by Sinn Féin TD Mary Lou McDonald during an at times testing sitting of the PAC.

The hearings are examining the Comptroller and Auditor General’s report (CAG) into the sale.

Project Eagle was sold in April 2014 to a US investment firm known as Cerebus. The CAG report found that the taxpayer incurred a potential loss of up to 190m sterling.

Representing Lazard, the official sale advisor, its managing director Patrick Long accepted that he and his staff were not informed of key details in relation to the transaction.

These include the fact that an investment firm Pimco pulled out of the bidding process after being asked to provide a fixer payment of £16 million for three parties involved in the deal.

The money was to be shared equally by Belfast businessman Frank Cushnahan, US law firm Brown Rudnick and Ian Coulter, a managing partner of Belfast solicitors firm Tughans, Pimco previously told the committee.

Mr Cushnahan was formerly a Nama adviser on Northern Ireland, on the recommendation of the Democratic Unionists.

Brown Rudnick and Tughans also advised Cerberus on the successful deal.

All parties have denied any wrongdoing.

During robust questioning, Ms McDonald claimed that Mr Long and his company “spectacularly lacked insights” as sales advisor.

"Do you know the expression eejit? NAMA made an eejit of you, a patsy,” she said.

Mr Long insisted his company always acted professionally and did the best job it could.

“We gave the best advice we could in knowledge we had at the time,” he said.

Earlier, Mr Long acknowledged that there were “quite a lot of unusual features” in the sale process itself.

These included that the fact there was just one round of bidding, the small number of participants and the relatively tight time-frame imposed by NAMA.

While Mr Long said all of these aspects have been seen in previous sales processes, the combination of them made this particular process unusual.

During questioning from TDs, Mr Long admitted that his firm’s contract with NAMA was predicated on success fees.

“Success fees are common place… our fee was only payable on success,” he said, adding that his firm was at all times impartial.

Project Eagle was sold in April 2014 to a US investment firm known as Cerberus. The CAG report found that the taxpayer incurred a potential loss of up to 190m sterling.

During the hearings, Mr Long said the sales process was highly competitive and was designed to meet the criteria laid down by NAMA.

“There was competitive tension,” he added.

He said that eight other bidders were rejected as they did have the capacity to pay for the portfolio.

“We didn’t feel the other eight would be additive to the sale process… we didn’t believe they had the capacity to pay more for these loans,” Mr Long said.

He said that it was made clear to him and his officials at all stages that the process itself was “politically sensitive”.

Irish Independent


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