Business Irish

Friday 30 September 2016

Nama chief's PAC evidence challenged

Published 12/07/2015 | 02:30

A statement by Nama chairman Frank Daly on the circumstances surrounding the withdrawal of US private equity giant, Pimco, from the bidding for Nama's £4.5bn (€5.7bn) Northern Ireland loan book has been directly contradicted by the company involved
A statement by Nama chairman Frank Daly on the circumstances surrounding the withdrawal of US private equity giant, Pimco, from the bidding for Nama's £4.5bn (€5.7bn) Northern Ireland loan book has been directly contradicted by the company involved

A statement by Nama chairman Frank Daly on the circumstances surrounding the withdrawal of US private equity giant, Pimco, from the bidding for Nama's £4.5bn (€5.7bn) Northern Ireland loan book has been directly contradicted by the company involved.

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Addressing the Dail's Public Accounts Committee last Thursday, Mr Daly suggested that Nama had made it clear to Pimco that if it didn't remove itself from the sales process voluntarily, it would be told to do so by the agency.

He said: "I do not propose to enter into a debate with Pimco as to the meaning of the word 'voluntary'. Suffice it to say that it was left in no doubt that if the withdrawal was not voluntary, it would have to be involuntary."

Responding to those comments yesterday, Pimco issued a statement to the Sunday Independent challenging Mr Daly's account.

"Pimco decided to withdraw from the Project Eagle tender process, not because of any Nama decision, but because of the concerns relating to the third parties that Pimco had identified as part of its due diligence checks.

"At no point was Pimco required or asked to withdraw by Nama, and no such decision was communicated by Nama to Pimco or relevant to Pimco's decision," the statement said.

The controversy over Nama's sale of its Northern Ireland loan book has raged since Independent TD Mick Wallace used Dail privilege to claim £7m in an offshore bank account had been "earmarked" for a Northern Ireland politician or political party. The implication of the claim was that the money had been a pay-off linked to the sale of Nama's Northern Ireland portfolio - code-named 'Project Eagle'.

While Pimco, had been in pole position to secure the loan book which consists of some 850 properties attached to 55 debtors, it withdrew from the process after informing Nama that its compliance unit had detected a request for a £15m success fee to be divided up between three parties - the US law firm Brown Rudnick, the Belfast-based solicitors Tughans and former Nama Northern Ireland Advisory Committee member, Frank Cushnahan.

Following Pimco's withdrawal from the process, another major US fund, Cerberus, succeeded in its bid for Nama's Northern Ireland loan book within weeks using the same legal firms as its advisors.

Yesterday, the Independent TD Mick Wallace said: "Nothing less than a full independent inquiry into this controversy will address all the questions and put an end to the ongoing speculation in relation to Nama's sale of its Northern loan book."

Fine Gael TD Michelle Mulherin said the conflict between Pimco and Nama chairman's account merited "further investigation".

Pimco said it had not been a party to any transaction relating to the Project Eagle portfolio, and had been one of a number of firms approached by third parties to "gauge potential interest".

It added that none of the third parties were appointed as advisors to Pimco.

"Such parties were acting on their own initiative, seeking to act as brokers of a potential transaction, and were not acting as advisors engaged by Pimco.

"The parties seeking to act as brokers proposed an acquisition fee due if the potential transaction successfully completed. This was not a fee proposed by Pimco. Due to concerns identified by Pimco, Pimco did not agree to the proposed fee."

Pimco said it raised its concerns about the role of the third parties to Nama and advised the agency of the their identities and the acquisition fee that had been requested by them. Pimco said Nama shared its serious concerns about the matters raised.

Sunday Independent

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