Pimco letter to PAC ‘a game changer’

Nama has been accused by US investment firm Pimco of “repeatedly mischaracterising” its role in the controversial sale of its Northern Ireland loan book.

The Dáil’s Public Accounts Committee (PAC) heard that Pimco said it was “disappointed” that its withdrawal from the £1.3bn sale had been “repeatedly mischaracterised by Nama”.

Several PAC members last night described the Pimco letter as a “gamechanger” as it contradicts evidence given by Nama to the committee.

“We would suggest that Nama has conflated what may or may not have been discussed at the Nama board level (upon which we can not comment) and the reality of the calls that Pimco made to Nama and Pimco’s own decision to withdraw,” it said.

The PAC heard Pimco ditched its bid to buy the so-called Project Eagle portfolio in March 2014 over concerns about £16m in “success fees”.

According to evidence heard at the committee, the fees were to be split between Frank Cushnahan, ex-member of Nama’s Northern Ireland Advisory Committee, US law firm Brown Rudnick, and Ian Coulter, a managing partner of Tughans, a Belfast law firm hired to handle the deal.

The Pimco letter was read into the record by Committee chairman Sean Fleming.

The investment firm said that at no stage did Nama ask it to withdraw from the process.

According to Pimco, Nama said it was not aware of the fee arrangements but inquired if the firm would proceed with the sale should Mr Cushnahan’s involvement or fee proposal be an issue for the agency.

“In no way did Pimco seek the acquiescence of Nama to any fee arrangement nor sought agreement that any fee arrangement was appropriate,” a four-page letter, signed by Tom Rice, a chief legal officer at Pimco stated.

Pimco also said it would not attend the committee hearings, which are investigating the controversial Project Eagle sale, because it did not want to prejudice investigations in the US and the UK.

Pimco said it told Nama just before pulling out of a proposed deal that it was disappointed disclosures had not been made by relevant parties to the agency.

It did not want to be part of any process “where there would be a suggestion of impropriety”, it said.

Nama has strongly rejected any suggestion that it did not set out the circumstances of Pimco’s withdrawal accurately.

A Nama spokesman said that it has made its position clear to the PAC on the withdrawal of Pimco from the process. The Nama board was very clear that, if Pimco did not withdraw, then Nama would exit them, the spokesman said.

The Project Eagle portfolio was eventually sold to US investment fund Cerberus for £1.3bn. The C&AG concluded the sale incurred a potential loss to the taxpayer of £190m.

Members of the PAC described the contents of the letter as “very serious” and “explosive” and called on Nama to respond fully.

Sinn Féin’s Mary Lou McDonald said the Pimco letter is “a game changer”.

She said: “It now seems that Project Eagle was conceived not by Pimco but by Brown Rudnick along with Tughans and Mr Frank Cushnahan”.

Fianna Fáil TD Shane Cassells questioned the credibility of Nama. “The very core of this key evidence regarding Pimco shows that they (Nama) has been dishonest with the committee.”

Speaking to the Irish Examiner after the meeting, Mr Cassells said the issues raised are of very serious concern given the clear conflict in evidence.