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Former Nama adviser Frank Cushnahan 'in line for £5m payment'

Nama chairman Frank Daly
Brendan Hughes

A FORMER adviser to Nama was set to receive £5m following the sale of its huge property loan portfolio in Northern Ireland, it was claimed yesterday.

Nama chiefs made the explosive revelation to an Oireachtas committee, saying that a US investment fund disclosed that the money was destined for Frank Cushnahan.

He retired from Nama's Northern Ireland advisory committee just months before the 'Project Eagle' sale was agreed with another New York buyer, Cerberus.

Nama chairman Frank Daly said one of the nine original bidders, US financiers Pimco, was forced to withdraw its offer for the portfolio after encountering third party "fee arrangements" including payment to Mr Cushnahan.

He claimed Mr Cushnahan was to share in a three-way split of £15m with US law firm Brown Rudnick and then then managing partner of Belfast law firm Tughans, Ian Coulter.

The disclosure came as Nama officials were called before the Oireachtas public accounts committee in Dublin.

It followed allegations by independent TD Mick Wallace in the Dáil last week that £7m linked to Project Eagle was placed in an Isle of Man bank account and was "reportedly earmarked for a Northern Ireland politician" or party.

Mr Wallace has dismissed the opportunity to discuss his claims at the committee, instead calling for an independent inquiry.

Mr Daly repeatedly insisted yesterday that Nama (National Assets Management Agency) had no knowledge of the offshore funds.

But he revealed the extent of Nama's knowledge of proposed payments to third parties when it barred Pimco from the sale after it revealed "fee arrangements".

"A subsequent piece of information came to us that there was a fee of £15m to be split three ways, Brown Rudnick, Tughans' managing partner and Frank Cushnahan," he said.

"That was after Pimco had exited or had been exited by us. Pimco told us. They told us after the withdrawal."

Under questioning from visibly astonished committee members, Mr Daly said: "I agree with your wow factor."

He added: "We were appalled. But our real concern was the involvement of, or alleged involvement of, a former member of our Northern Ireland Advisory Committee."

Mr Cushnahan had resigned from Nama's Northern Ireland advisory committee months before the bidding war for Project Eagle was finalised in April 2014.

Nama suggested at the committee that it was not unusual to expect multi-million pound legal fees for a deal of such a huge scale and it paid its own legal advisers €1.8m.

Up to nine global investment funds were initially involved when the portfolio of 850 properties was put on the market for about a third of the €4.5bn that developers, investors and speculators originally borrowed.

Three were left by March 2014 – Pimco, Cerberus and Fortress Capital.

Mr Daly admitted that some of the events around the sale process were exceptional, including former Stormont finance minister Sammy Wilson being contacted by Brown Rudnick to say it had two investment funds interested in Project Eagle.

The committee heard Mr Wilson was sent a letter from lawyers Brown Rudnick stating they had two clients who would bid for Project Eagle which he subsequently sent to the south's finance minister Michael Noonan.

Mr Noonan forward the letter to Nama and told Mr Wilson the sale process must be open, transparent and exclusivity would not be considered.

Mr Cushnahan was appointed Northern Ireland adviser to Nama on advice of Mr Wilson.

He left Stormont's finance department in July 2013, a year before the Project Eagle deal was finalised.

Mr Daly said they pressed ahead with the sale of Project Eagle, despite concerns over payments to third parties, for several reasons including the reputational damage that could be caused by pulling the plug.

Nama was set up to clear large property and development loans from the Republic's bailed out banks.

It created Project Eagle by paying banks €1.9bn for loans linked to the properties but then sold it to Cerberus for more than £1bn last year, at a loss of about €200 million, after rents and interest payments were factored in.

Nama insisted that Mr Cushnahan would not have been privy to "inside information" on debtors, the Project Eagle portfolio or detailed plans for its sale through his role as an external adviser.

"We are talking about Northern Ireland. We are talking about a relatively small business community where there's an awful lot of information about debtors and properties who's in Nama, who's not in Nama, but it did not come from Nama," Mr Daly said.

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