Updated 7.47pm
A COMMISSION OF Investigation into Nama will be held following a long controversy about the sale of its Northern Irish loanbook.
The decision for a statutory inquiry was made following a meeting of political leaders in the Republic this afternoon.
The agreement comes after the publication of a report by the Comptroller and Auditor General into Nama’s 2014 sale of a vast property portfolio to a US firm.
It found that the agency could potentially have lost €220 million in the Cerberus deal. Nama has rejected its conclusions.
Taoiseach Enda Kenny met with Fianna Fáil leader Micheál Martin and Sinn Féin’s Gerry Adams today to discuss the next step in the process.
Submissions will now have to be made by stakeholders to see how the review should be managed.
“Sinn Féin will submit our views in terms of what we believe the scope of this investigation should be,” finance spokesperson for Sinn Féin, Pearse Doherty, said.
While it should be modular, with Project Eagle being the first module scrutinised, it can’t be limited to that alone. It has to look at the other allegations that have been made in relation to Nama.
“Despite pushing very strongly that the Minister for Finance should use his discretion under the Act to cease all further sales, this government will not give any commitment to do this. This is particularly concerning given that Nama is currently preparing the sale of Project Gem, a €4 billion property transaction, which is to open for bids this year.”
Independent TDs have also called for all Nama transactions to be frozen.
What next though?
The deal – codenamed Project Eagle – has since loomed increasingly large over the body politic of the whole island.
The Public Accounts Committee will meet next Wednesday, 21 September, but Nama are not officially due before it until 29 September, although many believe this will be brought forward to 22 September – next Thursday.
Minister for Finance Michael Noonan is expected to come before the committee on 6 October, meanwhile.
Nama and the Government
Yesterday, Fianna Fáil finance spokesman Michael McGrath said there must be an independent investigation into the transaction which must also look at what he called the “Government’s strategy [for] Nama to accelerate its sales process”.
He added:
It would certainly need to know what impact that revised strategy from government had on the operation of Nama and its sales strategy.
He added: “It’s very clear to me … Nama should have stopped the entire process once it became known to them that Cushnahan was set to benefit to the tune of around £5 million.
“And when Pimco withdrew or were kicked out of the process … Nama proceeded within weeks to accepting the highest bid left which was Cerberus.
“Despite knowing that they were being represented by the very same legal firms in whose offices Nama held meetings.”
Shadow of Cushnahan
McGrath added: “It does appear that the normal procedures were departed from by Nama in relation to such a large transaction – £1.3 billion.
“The fact that the amount of time available for potential bidders to carry out the necessary due diligence may well have had an impact for taxpayers. It is a very significant and important conclusion that has been reached.
And then the shadow of Frank Cushanan looms large in the report, as well.
One cannot but reach the conclusion that in March 2014 – when Nama and indeed the Minister [for Finance, Michael Noonan] was informed of the inappropriate, unorthodox fee arrangement that was in place … that the whole process should have been stopped at that stage.
McGrath noted that Nama’s response to the C&AG report seems to deal only with technical valuation, and discounting cashflows.
It doesn’t, as far as I can see, address …. the fact that it wasn’t a fully open and competitive process where all potential bidders were given a fair and equal opportunity to carry out due diligence and assess the underlying quality of the loans being bought.
Co-operate fully
Last night Minister for Public Expenditure and Reform Paschal Donohoe expressed confidence in the C&AG.
He also, however, managed to express confidence in Nama, who have issued a trenchant riposte to criticisms contained in the report.
“Of course the Government accepts the report,” Donohoe said.
And the government accepts the work and the nature and how important the C&AG is.
He said that the Government could have just referred the matter to the Public Accounts Committee, but have instead “decided that this is not enough”.
Donohoe said that Finance Minister Michael Noonan, who oversaw the transaction, would co-operate fully with the PAC and will offer any support to it.
Suspend transactions
Last year, Independents4Change TD Mick Wallace alleged that £7 million deposited in an Isle of Man account was destined for a Northern Ireland politician.
He also stood up in the Dáil and told TDs that the 800-strong loan book was sold for €1.5 billion to the private equity company, despite having been worth €4.5 billion.
Last night, he said the Minister for Finance and Taoiseach displayed “breathtaking indifference, and at times arrogance” in their oversight of Nama, a State body. He called for an independent commission of investigation, and added:
Until then, the proceeds of the sale of Project Eagle should be frozen, under the Proceeds of Crime Act, and all Nama activities should be suspended.
The North
Northern Ireland first minister Arlene Foster, of the DUP, has meanwhile called for maximum transparency over the deal.
Deputy first minister Martin McGuinness and SDLP leader Colum Eastwood have both called for a cross-border investigation (as has Labour deputy leader Alan Kelly here).
Foster, however, has argued that the UK’s National Crime Agency probe should take precedence north of the border.
With reporting from Sinéad O’Carroll.
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