The National Asset Management Agency (Nama) has been criticised for the way it handled key aspects of a £1.322 billion (€1.59 billion) sale of its Northern Ireland properties more than a decade ago.
However, a commission of investigation into Nama has found no evidence that another bidder was willing to pay more than the price it received from US firm Cerberus in the deal, known as the Project Eagle transaction.
Nama was criticised about the way it dealt with “serious reputational risk” over the role an advisory committee member when selling the assets after the financial crash.
The commission found the State “bad bank” failed to properly clarify questions over a potential £5 million “success fee” to a former member of its Northern Ireland advisory committee if another bidder landed the deal.
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The Government on Tuesday published the 458-page report of the commission established after claims of misconduct in the deal.
The report comes nine years after a Comptroller & Auditor General said Project Eagle could have realised an additional £190 million (€220 million) in certain circumstances and that the deal involved “a significant probable loss of value to the State”. At the time, Nama rejected such findings.
However, the commission chaired by solicitor Susan Gilvarry found no other potential buyer was prepared to pay more than Cerberus.
This finding was made even though the commission was not mandated to consider whether the best achievable price was realised in the Project Eagle sale.
“Where there is no evidence to suggest that another bidder was willing to purchase the portfolio at a price higher than that ultimately paid by the purchaser, Cerberus, and on the exact same terms, there is no basis on which the commission could conclude, had it been directed to, that anything other than that the best achievable price was obtained by Nama for the Project Eagle portfolio,” the report said.
Nama welcomed Ms Gilvarry’s findings, saying it found the “best price achievable” was realised and that its disposal strategy and sale process were appropriate.
But there was criticism from the commission over the role of a key member of its Northern Ireland advisory committee, Frank Cushnahan, in the deal.
At issue was the fact that Mr Cushnahan was one of three potential equal beneficiaries of a £15 million “success fee” from rival bidder Pimco, which withdrew its bid after notifying Nama of its offer of the fee.
Mr Cushnahan is one of two men facing criminal trial in Belfast over the Project Eagle process.
“Nama failed to properly clarify during the sales process, either with Pimco or with Mr Cushnahan, when Mr Cushnahan’s involvement with the proposed success fee began, leaving it entirely unclear whether it had occurred before November 2013,” the report said.
“Mr Cushnahan had been given confidential information in October 2013 regarding Nama’s intention for an open market process, three months before Pimco were informed of same.”
According to the report, former Nama chairman Frank Daly “should have informed” the board of the full extent of Mr Cushnahan’s disclosures of interest when the proposed success fee came to light.
“In making this finding, the commission accepts that this did not impact the decision to proceed with the loan sale.”
The decision to continue the sale was appropriate, it said.
“Notwithstanding the relentless pace and highly complex nature of the transaction and Nama’s priority to ensure that the disposal was concluded on satisfactory terms, the commission concludes that greater consideration should have been given to seeking internal and/or external formal legal advice, informed by the full extent of Mr Cushnahan’s disclosures.”
