Wednesday 7 December 2016

Wallace: Fortress told me Nama NI sale 'horrifically uncompetitive'

Published 03/07/2016 | 02:30

TD Mick Wallace
TD Mick Wallace

The controversy surrounding Nama's sale of its €5.6bn par value Northern Ireland loan book to US private-equity giant Cerberus has intensified, with Independent TD Mick Wallace alleging that a senior executive at Fortress, an unsuccessful bidder, told him that the bidding process was "horrifically uncompetitive".

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Speaking in the Dail last Wednesday, during the debate on a private member's motion in which he called on the Government to establish a commission of investigation into Nama's sale of Project Eagle, Wallace used parliamentary privilege to dispute Nama's insistence that there had been "sufficient competitive tension" between Cerberus and Fortress to continue the bidding process.

Ultimately, Cerberus secured Nama's Northern Ireland loan portfolio, paying £1.241bn (€1.48bn) - or just £1m above the reserve price of £1.241bn. Fortress, its sole rival for Project Eagle following the withdrawal of Pimco from the process, bid £1.1bn.

Addressing Nama's handling of the transaction, Wallace asked the Dail what evidence had been provided at the time of the sale to show that competitive tension still existed once Pimco had pulled out following the detection by its compliance team of a request for a £15m success fee.

The proposed fee was to have been 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.

Referring to a conversation that Wallace claims to have had with a senior Fortress executive, the Wexford TD said: "I have spoken to a senior executive in Fortress, who confirmed there was no competitive tension. He said that the lack of tension was 'horrifically uncompetitive'. They were his words."

Commenting on the difference between Fortress's offer of £1.1bn and Cerberus' successful bid of £1.241bn, he added: "Let us not get into the argument of whether it (Fortress) knew the reserve price and whether it wanted to get back into the process or not. It was not a competitive tendering process by any stretch of the imagination. It does not stack up."

Wallace reminded the Dail that Fortress had to write to the Department of the Taoiseach to "gain entry to the sales process" following Pimco's withdrawal.

A spokesman for Fortress declined to comment.

A spokesman for Nama said: "The Project Eagle sales process was robust and competitive and delivered the best achievable outcome for the taxpayer. Fortress did not raise any issues regarding the process with Nama at any stage."

Wallace's efforts to have a commission of investigation established immediately have been frustrated by both the Government and by Fianna Fail. Following a lengthy debate, the Dail agreed to a Fianna Fail proposal allowing for the establishment of a commission of investigation if necessary once the outstanding criminal investigations taking place in Northern Ireland have been concluded.

Sunday Indo Business

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