A controversy that has gone on for more than a decade over the sale by the National Asset Management Agency (Nama) of a Northern Ireland loan book may finally be brought to an end by the report of a commission of investigation into the issue. The commission’s report is critical of aspects of Nama’s management of the deal , but did not find any evidence that it could have achieved a higher price than the €1.6 billion paid by US fund Cerberus.
The so-called Project Eagle sale took place in 2014. The loan book was sold to Cerberus after it emerged that Pimco – another US fund and the original leading bidder – had agreed to pay a “success fee” to a US legal firm Brown Rudnick, a Northern Ireland lawyer, Tughans, and Frank Cushnahan, a businessman and a member of Nama’s Northern Ireland Advisory Committee.
Following the sale, claims in the Dáil by then TD Mick Wallace relating to money transferred to the Isle of Man by Ian Coulter, former managing partner of Tughans, led to a series of investigations. Cushnahan and Coulter, the former managing partner of Tughans are now facing fraud charges. The trial in Belfast has yet to commence and both deny the allegations.
Nama’s case has always been that the problems were among the bidders and did not influence the sale process or the outcome – and that it dealt appropriately with the issues. However, the commission is critical of aspects of the agency’s management of the deal and in particular its oversight of conflicts of interest declarations from Cushnahan. It should have asked more questions and sought more clarifications in relation to these, the commission finds. Corporate governance needs to go well beyond box-ticking and there are important lessons to be learned here.
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The report finds no evidence that a higher price could have been achieved, contrary to an earlier finding from the Comptroller & Auditor General. Importantly, it also finds in favour of Nama’s overall strategy for the sale. This will come as some reassurance to taxpayers, who ultimately footed the bill for the bank bailout.
