Sunday 19 November 2017

Stormont criticises Noonan's judgment in going ahead with €1.6bn Nama sale

Michael Noonan. Photo: Tom Burke
Michael Noonan. Photo: Tom Burke
Shane Phelan

Shane Phelan

Finance Minister Michael Noonan has been criticised by a parliamentary inquiry for failing to halt the controversial €1.6bn sale of Nama's Northern Ireland loan portfolio.

The Stormont inquiry said it was "unclear" why Mr Noonan did not order the suspension of the Project Eagle sale "given the seriousness" of revelations that a former Nama advisor, Frank Cushnahan, stood to be paid Stg£5m by a prospective purchaser.

Its findings raise major questions about Mr Noonan's judgment and come as the Finance Minister is primed to play a crucial role in negotiations on the formation of the next government.

Mr Noonan could have exercised his general powers of direction over Nama to suspend the sales process until matters were investigated fully, the inquiry by the Northern Ireland Assembly's Committee on Finance and Personnel found.

Instead, the sale process continued, with Mr Cushnahan allegedly still involved on the fringes. In a covert recording, which Mr Cushnahan has not contradicted, he appeared to have said he stood to earn Stg£6m from the final sale.

A progress report by the committee, being published today, also raises questions about the judgment exercised by the Nama board in deciding to proceed with the sale.


It criticised as "particularly unhelpful" Nama's refusal to provide oral evidence to the inquiry.

The report said it was regrettable Mr Noonan did not encourage Nama to attend.

The committee has been inquiring into the sale of the portfolio of 850 property loans held by Northern Irish businesspeople since last July.

Its probe, and a criminal inquiry by the UK's National Crime Agency, was sparked by revelations that a sum of Stg£7m linked to the deal was found in an Isle of Man bank account.

Mr Noonan was informed in March 2014 that Mr Cushnahan, who had been a member of Nama's Northern Ireland Advisory Committee until November 2013, stood to earn Stg£5m in fees if one of the bidders, global investment management firm Pimco, was successful.

He was relayed the information after Pimco advised Nama of a proposed fee arrangement for advisors, which was to see Stg£15m split equally between the Brown Rudnick international law firm, Belfast law firm Tughans and Mr Cushnahan.

Nama had not previously known of Mr Cushnahan's involvement in the deal and was uncomfortable with this.

Pimco subsequently withdrew from the bidding.

Despite Nama's concerns, its board decided to proceed with the sale, taking bids from two other investment companies.

The Dail Public Accounts Committee previously heard that Mr Noonan did not object to Nama's decision to continue.

The following month, the portfolio was sold to US vulture fund Cerberus for €1.6bn.

Last month a BBC Spotlight programme aired secretly recorded footage of Mr Cushnahan saying he was to be paid Stg£6m for work on the final deal.

The money was to be routed to him via an Isle of Man bank account because Nama had expressed concerns about fees.

He has yet to comment on the recording.

Cerberus had denied making any payment for the benefit of Mr Cushnahan.

In its report, the Stormont committee said it "notes with regret the decision of the Nama board not to suspend the Project Eagle sales process" once it was informed by Pimco of the proposed payment of a fee to Mr Cushnahan.

It said: "From the evidence to date, the committee considers this development to be a core area of concern within the entire sale and purchase process."

As well as criticising Mr Noonan for not halting the sale, the report also noted that the minister did not inform the Northern Ireland Executive.

The Project Eagle probe: key points

It was regrettable the Nama board did not suspend the Project Eagle sale after learning of a proposed £5m payment by a bidder to Frank Cushnahan.

The proposed payment was "a core area of concern". Further information is needed on why Nama proceeded with the sale.

It is unclear why Finance Minister Michael Noonan did not intervene to halt the sale process so the revelations about Mr Cushnahan could be investigated.

Mr Noonan did not inform the Northern Ireland Executive when he was told of the Cushnahan controversy.

The Irish Government may wish to clarify what steps it is taking to ensure something similar does not happen in future.

Northern Ireland ministers should take advice from senior departmental officials before nominating individuals to positions of strategic economic importance.

Robust systems should be in place to ascertain the financial interests of Northern Ireland ministerial nominees to positions of strategic economic importance.

There was a failure to minute crucial meetings around the Project Eagle sale involving Northern Ireland executive members and senior civil servants. This should be avoided in future.

Irish Independent

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