C&AG report: Inquiry into sale of assets ordered

The Government is to order an inquiry into the £1.2bn sale of Northern Ireland property assets by Nama.

The Project Eagle deal with US investment fund Cerberus in 2014 has been dogged by scandal for more than a year, including £7m linked to it being found in an Isle of Man bank account.

The Government confirmed the Public Accounts Committee would first examine a Comptroller and Auditor General (C&AG) report into the affair before a formal inquiry is launched.

Project Eagle involved loans linked to over 800 properties in Northern Ireland being sold in one lot to the New York investment firm which boasts former US vice president Dan Quayle in its ranks.

Taoiseach Enda Kenny is to meet opposition leaders next week to identify areas of public concern around the deal that need to be investigated and how that should be carried out. There have been calls for a cross-border inquiry due to the limitations of parliaments in Dublin and Belfast and their inability to compel witnesses from other jurisdictions.

The C&AG found Nama has losses of £162m on deals linked to Northern Ireland properties, the vast majority from Project Eagle. Its audit found the deal was worth £1.137bn, with Nama having paid about £2bn for the loans. The C&AG said there is no indication that Nama had considered a bulk sale of its Northern Ireland assets until US law firm Brown Rudnick wrote on behalf of US investment fund Pimco in June 2013 offering an exclusive deal.

The treasury building on Grand Canal St, Dublin, which houses Nama
The treasury building on Grand Canal St, Dublin, which houses Nama

It found that two of Nama’s valuations of its Northern Ireland loans in late 2013 and early 2014 underestimated their value.

The C&AG report also noted that Pimco withdrew from the bidding war in March 2014 after it told Nama about a “proposed success fee arrangement” involving Brown Rudnick, a Belfast law firm called Tughans, and a former member of Nama’s Northern Ireland Advisory Committee.

The £7m subsequently discovered in the Isle of Man was in an account controlled by a former managing partner of Tughans, Ian Coulter, who resigned after it was unearthed.

Tughans, which acted as a subcontractor for Cerberus’s US lawyers, Brown Rudnick, insisted it was not aware of the transfer and all parties involved in the 2014 transaction denied wrongdoing.

The C&AG found Nama dropped its reserve price in late March 2014 to £1.23bn and on April 1 that year, Cerberus offered £1,241m and the only other bidder, Fortress, offered £1.075bn.

Project Eagle has been examined on previous occasions at the Public Accounts Committee. Investigations have also been launched into the deal by the UK’s National Crime Agency, the US Department of Justice’s Securities and Exchange Commission as well as a parliamentary inquiry in Stormont.

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