The National Asset Management Agency and the Department of Finance have criticised a report published by a committee of the Northern Ireland Assembly on the controversial Project Eagle loan portfolio sale.
In 2014 a US investment company, Cerberus Capital Management, bought the NAMA portfolio of Northern Ireland-based debtors. The portfolio had a book value of €5.8 billion, while the purchase price was not disclosed NAMA said at the time that it was the biggest transaction in the agency’s history, believed to be around €1.6 billion.
Following the transaction, Belfast law firm Tughans discovered that its managing partner Ian Coulter had moved €7.7 million in fees to an Isle of Man account. This discovery prompted Coulter’s resignation and the firm reported the transfer to the Northern Ireland Law Society. It is now the subject of an investigation by the UK’s National Crime Agency and BBC Northern Ireland recently recorded former agency advisor Frank Cushnahan claiming the money was meant for him for work he had done on the bid.
The report by the Northern Ireland Assembly’s finance committee comes on the back of its investigation into the deal. The report is critical of the decision by former Minister for Finance Michael Noonan not to suspend the sales process when it learned of the proposed fee arrangements and states that the decision not to halt the sale of Project Eagle properties is central to its concerns about the €1.6 billion transaction.
The committee also expressed its regret that NAMA did not attend an oral hearing and said that NAMA needed to be more open and accessible, given the importance of the portfolio to the Northern Ireland economy. However in a letter addressed to the finance committee NAMA chairman Frank Daly was critical of the report.
He stated that NAMA had always been fully cooperative with the committee following the sale and had provided it with transcripts of its appearance before the Oireachtas Public Accounts Committee. Daly also said that NAMA had given detailed and prompt responses to the 105 questions put to it by the Stormont committee.
He also refuted the suggestion that the onus was on NAMA to stop the sale noting that the bid met NAMA’s reserve price and that the board took the view that with little interest in the loan portfolio a sale would “eliminate the risks, uncertainties and costs associated with a protracted workout of the portfolio.” He noted that any delay could have adversely effected the economies on both sides of the border.
The Department of Finance has also rejected the Northern Irish committee’s claims that Minister for Finance Michael Noonan should have suspended the auction when NAMA discovered another bidder Pimco had agreed to pay Cushnahan a fee. The department stated that the Minister does not have control over the conduct of NAMA’s individual sales as its only authority over the agency is to ensure that it achieves the best possible value for the tax payer.
Following the publication of the report, Independent TD Mick Wallace, who first brought the scandal to the attention of the Dáil said the report highlighted the inaction of the Government and Noonan’s failures and has called for further independent investigation into NAMA’s workings.
“This could be the biggest financial scandal this country has ever seen,” said Wallace. “It has cost the Irish taxpayer billions of euro. A commission of investigation must be established and headed by an independent person. There is still so much more to emerge.”