Letter shows accountant demanded £7.5m Nama payment

Tughans law firm, Belfast. Picture by Hugh Russell

BELFAST accountant David Watters demanded a £7.5m payment for work he carried out in the run-up to the sale of Nama's Northern Ireland loan book.

In a letter dated April 24 this year and seen by The Irish News, Mr Watters also accuses Ian Coulter, the lawyer at the centre of the Nama scandal, of failing to "discharge the contractual and fiduciary obligation he owed me".

Mr Watters said he "lays claim" to the "acquisition fee of £7.5m" held by Belfast law firm Tughans following the £1.3bn sale by Nama to US investment firm Cerberus in early April.

The money, said to have been sent from a Tughans' Belfast bank to an offshore account under instructions from Mr Coulter, is being investigated by authorities both here and in America following allegations that it was to be shared between a Northern Ireland politician and deal 'fixers'.

The letter is addressed to Patrick Brown, the managing partner of Tughans, although it was actually sent to businessman Frank Cushnahan, another key figure in the Nama sale process.

Marked 'draft' and written on headed notepaper from Mr Watters' home address in Belfast, it is not known if it was ever received by Tughans.

Both Mr Watters and Mr Cushnahan, who have both denied any wrongdoing, were named by loyalist blogger Jamie Bryson at an assembly committee last month as being beneficiaries of a "success fee" following the Nama deal.

Mr Watters, a founding partner of Belfast accountancy firm McClure Watters, said afterwards it was "completely false" to claim he "was due to receive a fee from monies paid to an Isle of Man account".

He added: "I had no role in, and was in no way party to, the issuance of this fee.

"Additionally, and for the avoidance of any doubt, I had no direct or indirect involvement in the Project Eagle (Nama sale) transaction."

However, the letter seen by The Irish News suggests that Mr Watters did expect money for earlier work predating Project Eagle.

It states that the fee of £7.5m was "ultimately to be paid to a vehicle specifically formed for the purpose called Cadogan Futures LLP".

Cadogan Futures was, according to records in Companies House, a partnership set up on 11 November 2010 by David Watters and Deborah Watters. The company is dormant.

The letter suggested that the concept of the sale of the Nama portfolio as one entity was devised more than three years before the successful bidder Cerberus completed the sale.

Mr Watters also alludes to a meeting in Tughans' offices on 4 July 2013, attended by Mr Coulter, its then managing partner, who would later dramatically leave the law firm following a dispute over the £7.5m payment.

He said: "There was already much water under the bridge when I attended a meeting in your offices."

During this meeting, the letter states that Mr Coulter persuaded Mr Watters to let him take the lead in the sale process because "he had identified a prominent lawyer in London who had the contacts to deliver a fund of sufficient size to facilitate the deal".

Brown Rudnick represented both Pimco and Cerberus in their respective bids for Project Eagle and was paid £15m by Cerberus, the winning party. Half of the £15m was paid to Tughans, which it had hired as local counsel.

Mr Watters believed that even though he was asked to step back from the sale process at this stage he was still owed monies for the work he had performed since 2010.

He said: "I felt reassured by that meeting and because of the sensitivities of the transaction sat back and waited for the deal to happen. At this point I felt assured that £7.5m would be paid to Cadogan Futures LLP."

Mr Watters added that even after the deal completed in the spring of 2014, he "waited discretely" for the money.

"You can imagine my surprise when on 5th January 2015 Ian was dismissed by the firm for attempting to divert the fee abroad. This was not done with my knowledge and indeed there was no notification received by me that the entire acquisition fee had been paid and 50% (i.e the £7.5m) remitted to Tughans.

"Unfortunately it appears the size of the fee has affected Ian's judgement and caused him to fail to discharge the contractual and fiduciary obligation he owed me and Cadogan Futures LLP."

The Irish News understands that a copy of the letter has been given to The Law Society, the legal watchdog which is investigating whether there was any wrong doing on the part of Tughans and Mr Coulter.

On the McClure Watters website, Mr Watters is described as having advised clients on dealings with Nama. McClure Watters is also reported to have acted for clients whose debts passed from Nama to Cerberus.

It is understood that Tughans advised multiple property debtors after they subsequently became Cerberus debtors.

Mr Cushnahan, a corporate consultant, is understood to have advised multiple property development companies whose debts were controlled by Nama. These were understood to have been declared by him before he was appointed to the Nama NI advisory committee, a position he left before the sale to Cerberus.

Mr Watters is understood to have been one of the businessmen who came up with the concept of a Nama Northern Ireland loan book sale - before the involvement of Mr Coulter and potentially even Frank Cushnahan.

According to the letter he originally termed the loan book acquisition 'Project Amani'.

Asked about the claims in the letter, a spokesperson for Ian Coulter last night referred to a statement released in July.

"The reason for the transfer [into an external account] is a complex, commercially- and legally-sensitive issue."

He also denied he was dismissed from Tughans, saying the firm "agreed his resignation, it was not a dismissal".

Tughans declined to comment. Mr Cushnahan did not respond to attempts to contact him.


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