Business Irish

Monday 5 December 2016

Kenny bows to pressure for independent inquiry into sale of loan book

Niall O'Connor and Cormac McQuinn

Published 16/09/2016 | 02:30

Fianna Fáil leader Micheál Martin. Picture: Arthur Carron
Fianna Fáil leader Micheál Martin. Picture: Arthur Carron

The Government has bowed to pressure from Opposition TDs for a statutory inquiry into the sale of Nama's Northern Ireland loan book, Project Eagle.

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Taoiseach Enda Kenny yesterday accepted the demands for an independent investigation as the fallout from the publication of the Comptroller and Auditor General's (C&AG) report continues.

Government sources said there was "growing consensus" between Mr Kenny and Opposition leaders as to what approach should be taken to investigate the sale of the property portfolio by the country's bad bank.

However, several issues need to be ironed out, including what sort of individual should head up such a probe and whether the many legal complexities can be overcome.

The C&AG report, which carefully scrutinised the sale, found the taxpayer suffered a potential loss of Stg £190m (€223.5m).

The report also questions whether Nama failed to take more action when it learnt a former adviser Frank Cushnahan stood to be paid more than Stg£5m in so-called 'success fees' by one of the bidders.

Read more: Donohoe backs both Nama and C&AG amid row over Project Eagle

Amid all the fallout, Nama has categorically rejected many of the report's findings.

The body described the report by Seamus McCarthy as "fundamentally unsound and unstable and cannot be left unchallenged".

The controversy has rocked the Government and led to serious questions for Finance Minister Michael Noonan as to whether he acted soon enough.

After repeatedly resisting calls for an independent investigation, Mr Kenny yesterday accepted the demands from Fianna Fáil and other parties.

Challenges

The Fine Gael leader asked his counterparts to submit recommendations by the end of next week as to how a statutory inquiry could work and, in particular, overcome the fact that there are two jurisdictions involved.

Speaking after the meeting, Mr Martin said he believed these challenges could be overcome.

"There's a lot of work that an inquiry can do, in terms of working within the Republic, access to documentation within Nama, Nama personnel," he said.

"Remember in the banking inquiry, which had specific legislation, some of the key personalities involved in the banking world were not interviewed or brought before that inquiry.

"Yet we had an inquiry which shed considerable light on many of the issues pertaining to that, so I think it's equally possible here."

Sinn Féin and some left wing TDs told Mr Kenny they believed an inquiry should be wider in scope and investigate Nama as a whole.

Read more: Timeline: Project Eagle and how claims Nama got the best price it could unravelled

Pearse Doherty, Sinn Féin's finance spokesman, has called for all future sales of Nama to be ceased.

However, Government sources pointed out that such a move would jeopardise the provision of 20,000 social homes by the agency.

Once a statutory inquiry is set up, any investigation by the Public Accounts Committee (PAC) will immediately cease.

The PAC is due to meet on September 22, when the matter will be discussed.

Full PAC hearings into Project Eagle are scheduled for the following week.

Irish Independent

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