Wednesday 13 December 2017

US firm Cerberus 'confident' no illegal payments made in relation to Nama’s controversial Project Eagle portfolio

Frank Daly, Chairman of NAMA Picture: Tom Burke 29/9/2016
Frank Daly, Chairman of NAMA Picture: Tom Burke 29/9/2016
Cormac McQuinn

Cormac McQuinn

The US firm that bought Nama’s controversial Project Eagle portfolio has told TDs it is “confident” that no illegal payments have been made by the company or its affiliates in connection with the deal.

An executive from Cerberus - which bought the agency’s Northern Ireland loan book for £1.2bn (€1.6bn) in 2014 – is appearing at the Public Accounts Committee (PAC) this afternoon.

The firm’s chief operating officer Mark Neporent outlined Cerberus’s involvement in the transaction.

He told TDs that “Cerberus is confident that no improper or illegal payments have been made by Cerberus or any if its affiliates in connection with the Project Eagle Portfolio”.

And he insisted that the firm didn’t "direct or authorise" anyone to make such payments on its behalf.

In a submission to the PAC, Cerberus says it first became aware of the opportunity to purchase the portfolio when it received an unsolicited approach from financial advisory firm Lazard, on behalf of Nama.

Cerberus had no knowledge of the transaction or any other bidders or advisers involved, Mr Neporent said.

The February 2014 approach came just weeks before the original bidder – Pimco – exited the process in mid-March 2014.

That came an alleged success fee to be paid to former Nama adviser Frank Cushnahan, the law firm Brown Rudnick and a solicitor from another firm, Tughans was raised with Nama by Pimco.

Pimco and Nama dispute the circumstances of how the company withdrew from the sale.

Cerberus was formally admitted into the process on February 14 and submitted its bid of £1.241bn on April 1. This was accepted two days later.

TDs heard how Cerberus hired Brown Rudnick as an adviser on the sale on March 24 after a partner at the law firm made an unsolicited approach to them.

Mr Neporent said Brown Rudnick proposed that it be paid £15m for its services and it was agreed that they would share half the fee with Tughans on the successful completion of the deal.

From Cerberus’ point of view it was approximately 1.1pc which was within its “customary advisory fee range”.

Mr Neporent said that Cerberus is committed to" high ethical standards" in the conduct of its business.

He said that in advance of Cerberus being selected as the preferred bidder, Nama sought, and the company provided, information on how its advisers would be paid.

Cerberus told Nama it engaged Brown Rudnick as well as informing the agency of Tughan’s involvement.

Mr Neporent said that Nama sought assurances that no fee or any other payment was to be made to anyone connected to Nama.

He said Cerberus sought and obtained such confirmations from Brown Rudnick and Tughans.

"Aside from seeking those assurances, Nama did not express any concerns or reservations regarding Cerberus having engaged Brown Rudnick, or Brown Rudnick's engagement of Tughan's," the Cerberus submission adds.

Mr Neporent told the Committee that the firm had “no contact or dealings with Frank Cushnahan at any point before during or after the acquisition of the Project Eagle portfolio”.

 Cerberus insists that it invested in Project Eagle in good faith.

“We are confident that we behaved and acted appropriately at all times, and that or actions have been, without a doubt, professional and correct.”

Cerberus is cooperating fully with investigations into Project Eagle in the US and the UK, the committee was told.

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