Bank of Ireland's 2011 sale of €1.3bn worth of UK commercial loans prompted a complaint to the Department of the Taoiseach by a private equity firm, alleging that the sale process was not an open one.
The complaint concerned a portfolio of UK commercial loans which was ultimately sold to US real estate investor Kennedy Wilson and partners for €1.3bn in 2011.
The loan sale by the bank, which received a total of €4.8bn in bailout money from taxpayers which it has since returned, was the largest of the year.
Now it has emerged that a private equity company, thought to be a rival bidder for the UK loan portfolio, made a complaint to the Department of An Taoiseach about how the sale process was run.
The complaint was revealed in the Dail last week by Finance Minister Michael Noonan. He was speaking in response to parliamentary questioning by Renua TD Lucinda Creighton.
The private equity firm complained that the sale process was not an open one.
This complaint was then raised by a senior official in the Department of Finance with an executive of the bank who, Finance Minister Michael Noonan said.
The bank executive provided reassurance that the sale process was robust.
Minister Noonan and the NTMA did not have any concerns about the sale process, he said.
The Department of Finance refused to reveal which private equity firm made the complaint when contacted by this newspaper, on the basis that the sale was a private one handled by Bank of Ireland.
The bank also declined to comment, stating that it does not comment on commercial transactions.
The underbidders in the sale have never been revealed.
Kennedy Wilson negotiated a 20pc discount to face value with Bank of Ireland on the portfolio, according to trusted property website Costar Finance.
The portfolio, Costar said, comprised around two dozen borrowers across 170 UK properties. About one-third of these were offices, with the balance in retail and light industrial. Around 60pc of the portfolio based in London.
The loan portfolio was one of several big non-core assets sold by Bank of Ireland in 2011 and 2012 in an effort to shore up its balance sheet, meet regulatory requirements and return to profitability.
Kennedy Wilson did a large amount of business with the bank in that period.
It bought the UK loan portfolio just months after buying commercial property manager Bank of Ireland Real Estate Management, its first acquisition in Europe.
In the same year it took a shareholding in the bank by investing in the lender as part of a consortium including Wilbur Ross, who helped to rescue the distressed bank by pouring more than €1bn into it exchange for a 35pc equity stake.
Sunday Indo Business