Business Irish

Saturday 22 October 2016

Nama prepares for war against watchdog over Project Eagle

Report due this week will find potential loss of hundreds of millions of euro in portfolio sale

Published 12/09/2016 | 02:30

Seamus McCarthy, the Comptroller and Auditor General. Pic Tom Burke
Seamus McCarthy, the Comptroller and Auditor General. Pic Tom Burke

The National Asset Management Agency (Nama) is set for an unprecedented showdown with the State's spending watchdog over its report on the controversial sale of the agency's northern loan portfolio, Project Eagle.

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A Comptroller & Auditor General (C&AG) report to be published this week concludes that shortcomings in the sales process resulted in hundreds of millions of euro potentially being lost.

It found that Nama could have achieved a better price for the portfolio, which was once valued at €5.7bn but was sold for €1.6bn to vulture fund Cerberus in April 2014.

However, informed sources have said Nama is set to "robustly" reject the core findings when the report is published.

There is little or no precedent for reports by the C&AG being challenged in the manner that Nama is now expected to.

Sources said the agency would argue that there were no irregularities on its side of the sale, contending that it was an open market transaction with competitive tension between rival bidders.

Nama is also set to reject claims that it could have done better with the sale price, arguing that if it had shelved the sale to a later date the price achieved could have been less.

A spokesman for the agency said it would be making no comment until the report was published.

The Irish Independent understands that Nama expressed its views to C&AG Séamus McCarthy while he was in the process of compiling his report.

However, its arguments were not enough to persuade Mr McCarthy to alter his findings.

Meanwhile, Nama has complained to gardaí and the UK's National Crime Agency (NCA) about the conduct of Frank Cushnahan, a former member of its Northern Ireland Advisory Committee, following the broadcast of secret recordings by the BBC's 'Spotlight' TV programme last week.

A recording of Mr Cushnahan detailed how he received Stg£40,000 (€47,250) from Nama debtor John Miskelly and undertook to try to develop a scheme to extract the Co Down developer's loans from the agency.

Letters were sent by Nama to gardaí and the NCA on Friday afternoon, alleging that the recordings may be evidence of a breach of ethics and anti-corruption laws.

Nama said Mr Cushnahan, who was deemed a public official under the Nama Act, was obliged to disclose his dealings with Mr Miskelly.

The programme showed a handwritten note purporting to show Nama valuations of Mr Miskelly's properties.

However, sources said Nama checked the figures after the programme and concluded that they were not correct. In some instances, the figures were 80pc out.

Political pressure has been rapidly mounting from opposition parties for a State inquiry into Project Eagle.

Two members of the Public Accounts Committee, Alan Kelly (Labour) and Mary Lou McDonald (SF), reiterated those calls yesterday. Mr Kelly said it was now "inevitable" that there would be an inquiry.

A Nama spokesman said it had no comment on the matter of a commission or an inquiry, adding: "We have always defended our position in respect of this sale and will continue to do so."

Separately, it has emerged that Nama official Enda Farrell, who received a two-year suspended sentence for disclosing confidential information relating to the agency, provided gardaí with the names of four other Nama employees who he claimed either assisted him, or were involved in leaking sensitive material themselves.

It is understood that Mr Farrell made the claims while being interviewed by detectives from the Garda Bureau of Fraud Investigation in relation to his leaking in 2012 of sensitive information relating to the financial affairs of a number of the country's biggest developers, including Michael O'Flynn, the Cosgrave Development Group and Pat Doherty's Harcourt Group.

Irish Independent

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