Former Nama adviser Frank Cushnahan is being investigated by police following a complaint made by a prominent Belfast businessman, the High Court in Belfast heard on Wednesday.

Gareth Graham reported Mr Cushnahan to the authorities last month, his barrister disclosed. A judge was also told Mr Graham had himself been removed as a director from the management company running one of his apartment complexes in the city.

The details emerged during Mr Graham’s ongoing legal battle with US investment fund Cerberus.

Mr Graham is a director and major shareholder in property firms that own commercial and residential premises in Belfast. The companies’ loans were among those transferred to Nama after the property crash. Last year, Cerberus bought Nama’s Northern Ireland portfolio in a deal worth more than £1 billion.

Mr Graham is challenging the validity of the appointment of administrators. He insists his businesses were sound and had never missed a repayment. His legal team is instead to claim an improper motive was involved.

A two-week trial is due to get under way at the High Court in Belfast in January. Mr Justice Horner was previously told the Northern Ireland loan book deal would be rendered illegal if any third- party “fixers” were wrongly involved. At that stage counsel for Mr Graham referred to Mr Cushnahan, a former Nama adviser who also worked for the Graham family bookmaking business from 2005 until 2008.

During his period with the business he had an office at its premises, the court heard. Recorded phone calls allegedly revealed a “deep animosity between Mr Cushnahan and the Graham connection”.

In September, Mr Graham told a Stormont inquiry the adviser was conflicted in his Nama role because he retained shareholdings in some Graham property companies that were moved into the bad bank category.

As the case returned to court yesterday it was confirmed that no civil action has been taken against Mr Cushnahan.

Mr Justice Horner then asked if the former Nama adviser had been reported to police. Counsel for Mr Graham, Monye Anyadike-Danes QC, replied: “He has, and police indicated, I think it was on October 12th, that they are proceeding with the investigation.”

Mr Cushnahan is not charged with any wrongdoing. He has also rejected the criticisms made at Stormont, insisting he gave up the Graham shareholdings in 2009.

The judge stressed that Mr Cushnahan has no involvement in the legal challenge and has rights which must be protected.