Nama bans payment of 'success fees' by bidders
Bidders for Nama loan portfolios are now being asked to make declarations that they will not pay "success fees" to anyone linked to the agency.
The move had been taken following revelations a former Nama advisor, Frank Cushnahan, was in line for a Stg£5m success fee from the sale of its Northern loans portfolio.
The agency's chairman Frank Daly has denied the sale of the Project Eagle portfolio was corrupt, but said measures had been taken to ensure prospective buyers do not try to enrich individuals linked to Nama.
He said Nama now seeks declarations from whoever is buying a portfolio that there is no success fee or any money payable to anybody connected with Nama. "We pitch that very widely, whether it be a board member, an advisory committee member, or a member of the executive or staff," said Mr Daly.
He said the first time such a declaration had been sought was when Cerberus bought the Project Eagle portfolio, which sold for €1.6bn last year.
Nama has been criticised for proceeding with the sales process after learning of proposals for a rival bidder, Pimco, to pay a success fee to Mr Cushnahan.
Public Accounts Committee vice chairman John Deasy said: "I think there is an acceptance that Nama proceeding with the sale after discovering a perceived conflict of interest has acted as an invitation to anyone who has an issue with Nama to hammer them publicly, rightly or wrongly.
"Requiring a declaration from prospective bidders from now on should stop this ever happening again."
Mr Cushnahan, a former banker, was a member of Nama's Northern advisory committee until November 2013.
Four months later, according to Mr Daly, Pimco's compliance department indicated that, as part of the arrangements it had made with advisers, a success fee was to be payable to Mr Cushnahan. He said Nama told Pimco it did not believe it could continue in the process and should withdraw, which it did.
However, Pimco said its decision to withdraw was not because of any Nama decision, but due of the concerns relating to the third parties. In a statement, it said parties "seeking to act as brokers proposed an acquisition fee due if the potential transaction successfully completed".
It said the fee was not proposed by Pimco, that it did not agree with it, and raised concerns about it to Nama prior to withdrawing.