Business Irish

Sunday 19 November 2017

Nama chief rejects allegation the sale of Project Eagle was 'corrupt'

Nama Chairman Frank Daly outside Leinster House, Dublin. Photo: Brian Lawless/PA Wire
Nama Chairman Frank Daly outside Leinster House, Dublin. Photo: Brian Lawless/PA Wire

Ed Carty, Press Association

THE biggest ever property deal in Northern Ireland was not corrupt, NAMA has insisted.

Frank Daly, chair of the National Assets Management Agency (Nama) made a staunch defence of the £1.241 billion Project Eagle deal which has been dogged by allegations of fixer fees and pay-offs for politicians.

"I do not agree that the bidding process had been corrupt," Mr Daly said.

"I absolutely stand over the integrity of the process and stand over the fact that the taxpayer got value for money."

In the latest sitting of parliamentary inquiries on both sides of the border, the Nama chief revealed he has met the UK's National Crime Agency as it probes allegations about £7 million deposited in an offshore bank account on the back of the Eagle deal.

Nama offered to publish full details of fees it paid in connection with the sale to US investor Cerberus.

Read more: Nama bosses 'met with investigation team probing allegations of corrupt payments'

Mr Daly added: "We have nothing to hide."

It previously emerged that one of the final three in the bidding war for Project Eagle, US investors Pimco, told Nama that Frank Cushnahan, a former adviser to the bad-bank in Northern Ireland, was due a "success fee" if they won the auction, estimated at £5m.

Mr Daly said it had the potential for "huge reputational damage" but that Nama did the right thing by asking Pimco to withdraw and driving on with the sale.

Cerberus nailed the auction by offering £1.241 billion for loans linked to 800 Northern Ireland properties when the reserve price was £1.24. Fortress came in with an offer of £1.1 billion.

Mr Daly dismissed suggestions that the winning bid was made on the back of inside information.

"I think you are advancing the theory of a grand coincidence here - it's not," he told the Dail's spending watchdog.

The Public Accounts Committee heard that Cerberus, and failed bidder Fortress, would have spent 3.5m euro (£2.6m) each on due diligence, with hundreds of people working on data related to the assets, before bidding.

Independent TD Shane Ross said: "Obviously your integrity is not in question, nobody questions that at all, but on this deal you have done the taxpayer no service at all and you should be making a victim impact statement."

Read more: McGuinness present for conference call on Nama North deal

Daithi McKay, the chair of the Stormont Assembly Finance Committee and a Sinn Fein MLA, also attended the PAC and said Nama's refusal to appear at a public hearing in Belfast was deeply frustrating.

"Nama and others cannot continue to use the excuse of the ongoing criminal investigation as a reason for not coming before the committee," he said.

Mr Daly offered to get support from the Nama board to meet the Stormont committee in private.

Nama has been dogged by allegations from Independent TD Mick Wallace, a former builder, first about the Isle of Man deposit, then that £45 million was set aside for "fixers" who secured the Project Eagle purchase and a third claim that a company was encouraged to pay a 30,000 euro bribe to exit the debt agency.

Mr Daly told the committee that allegations around the sale are vague, implausible and without evidence.

"It is unfortunate, to say the least, that in some cases those making the allegations appear unconcerned about the reputational or commercial damage that their unsubstantiated allegations may cause to the organisation concerned or to any individuals that they may name," he said.

"Often there are no consequences for them if their allegations prove to be without foundation, whereas the reputational damage to the organisation or individual may well be impossible to reverse."

On Mr Wallace's allegation of the £45m fixers' fund, Mr Daly added: "I have no idea where the figure came from or where it possibly could have come from."

And on the allegation that a Nama official was trying to bribe a company to exit the debt agency, chief executive Brendan McDonagh said a Garda investigation was under way.

He added: "The company that's been named to me that was supposed to be involved is still in Nama, owes its full debts to Nama, did not have its debts written off."

Project Eagle was valued by Nama at 27p in the pound, with some assets as worthless as 5p in the pound, with political suspicions centring on how the investment house nailed its bid to within £1m of the confidential reserve price of £1.24 billion.

Cerberus, which boasts former US vice president Dan Quayle among its directors, is on course to make about £200m gross profit on Project Eagle.

In a staunch defence of its work, Nama's Mr Daly and chief executive Brendan McDonagh said profit forecasts have been raised from one billion euro to 1.75 billion euro, and they expect to pass that figure.

Meanwhile, Sinn Fein's Martin McGuinness, the NI Deputy First Minister, said he would be willing to give evidence on his knowledge of the Project Eagle sale in Dublin.

Peter Robinson, Democratic Unionist leader, offered to give evidence to the Stormont committee.

Forty one files on the sale of Project Eagle were released by the Department of Finance at 9pm, sparking withering attacks from members of the Public Accounts Committee

One document showed Mr McGuinness had been listed as attending a teleconference on the sale of the Nama portfolio, with Finance Minister Michael Noonan and Democratic Unionist leader Peter Robinson, despite him saying previously that he had been "kept in the dark".

DUP MLA Simon Hamilton, a former finance minister in Stormont, said Mr McGuinness was "intimately involved in the discussions" around the Project Eagle sale.

Elswhere, Nama gave an insight into the scale of the loans and assets remaining on its books and the sale of the Project Arrow portfolio with bids expected by October 12.

It has a face value of 6.3 billion euro but the reserve price is as low as one billion euro for loans on property which is 50% residential and largely "regional and granular", according to Nama.

The bad-bank holds another 14.4 billion euro of assets, half in Dublin and 2.2 billion euro is in London.

Online Editors

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business