Northern Ireland

Pimco accuses Nama over botched property deal

Nama sold its northern loan portfolio to Cerberus for £1.24bn
Nama sold its northern loan portfolio to Cerberus for £1.24bn Nama sold its northern loan portfolio to Cerberus for £1.24bn

A US investment firm that pulled out of buying Nama's Northern Ireland properties over multimillion-pound fixer fees has accused the state agency of "repeatedly mischaracterising" the botched deal.

Pimco ditched its bid to buy the so-called Project Eagle portfolio in March 2014 over concerns it had about £16 million in "success fees".

The money was to be split equally between ex-Nama adviser Frank Cushnahan, US law firm Brown Rudnick, and Ian Coulter, a managing partner of Tughans, a Belfast law firm subcontracted to assist in the deal, a parliamentary committee has been told.

In a letter to the Oireachtas Public Accounts Committee in Dublin, Pimco said it was "disappointed" that its withdrawal from the sale had been "repeatedly mischaracterised by Nama".

"We would suggest that Nama has conflated what may or may not have been discussed at the Nama board level (upon which we can not comment) and the reality of the calls that Pimco made to Nama and Pimco's own decision to withdraw," it said.

The investment firm said that at no stage did Nama ask it to withdraw from the process, despite Pimco flagging concerns about the proposed fixer fees, which were never agreed, it added.

According to Pimco, Nama said it was not aware of the fee arrangements but enquired if the firm would proceed with the sale should Mr Cushnahan's involvement or fee proposal be an issue for the agency.

"In no way did Pimco seek the acquiescence of Nama to any fee arrangement nor sought agreement that any fee arrangement was appropriate," it said in a four-page letter, signed by Tom Rice, a chief legal officer at Pimco.

Pimco said it would not attend the committee hearings, which are investigating the controversial Project Eagle sale, because it did not want to prejudice investigations in the US and the UK.

The firm said it told Nama just before pulling out of a proposed deal that it was disappointed disclosures had not been made by relevant parties to the toxic assets agency.

It did not want to be part of any process "where there would be a suggestion of impropriety", it said.

Pimco added it was asked by Nama if it had considered "other options" such as "proceeding without the three parties, and we were asked to consider before closing any doors whether every option was being considered".

The firm told Nama on March 12 it had "no option but to withdraw" and Nama expressed its disappointment but accepted the decision, the hearing was told.

A spokesman for Nama said: "Nama has made its position clear to the PAC on the withdrawal of Pimco from the process - the NAMA Board was very clear that, if Pimco did not withdraw, then Nama would exit them.

"Nama rejects any suggestion that it did not set out the circumstances of Pimco’s withdrawal accurately."

Sinn Fein TD David Cullinane said the letter is the most important piece of correspondence the committee has received and it "clearly contradicts evidence from Nama and that is very, very worrying".

The letter casts doubt on a lot of what Nama said about the botched deal and about when it was made aware of the proposed success fees, Mr Cullinane told the committee.

The Project Eagle portfolio was eventually sold to US investment fund Cerberus for £1.2 billion.

Brown Rudnick acted as advisers in the successful deal, which has been dogged by scandal for more than a year, including £7 million linked to it being found in an Isle of Man bank account.

Mr Coulter resigned after it was unearthed.

Pimco said it was first approached about buying the portfolio by Brown Rudnick in April 2013, and the US law firm introduced Pimco to Mr Cushnahan and Mr Coulter.

The investment firm was told the Northern Ireland government wanted to ensure there would no fire-sale of the properties and that "it was a sensitive political matter and would have a major impact on the Northern Ireland economy".

Following a meeting with then first minister Peter Robinson and then finance minister Sammy Wilson in May 2013, Pimco was "informed by Brown Rudnick that it was the Northern Irish government's preferred purchaser for Nama's Northern Ireland portfolio", according to the firm.