National Asset Management Agency ‘categorically’ rejects report’s conclusions

Nama has argued that Comptroller and Auditor General (C&AG) Séamus McCarthy used the wrong calculations to conclude that the agency’s controversial Project Eagle sale cost taxpayers £190 million (€220 million).

The C&AG's report found that Nama's sale in April 2014 of its Northern Ireland loans to US company, Cerberus Capital Management, for £1.3 billion, left the State with a probable significant loss.

Mr McCarthy’s report based this on the difference between the price that Nama decided to seek for the property loans and the agency’s own calculations of what might have been realised if it held on to them for longer instead of selling them at that time.

Nama's chairman, Frank Daly, said if the agency had kept the Project Eagle portfolio "there would be no investor interested in buying it today – or in the foreseeable future – at anything close to the £1.322 billion price that was actually achieved".

Calculations

The agency’s statement argued the C&AG valued loans tied to poor-quality properties in Northern Ireland using calculations that would only apply to high-quality loans linked to properties in Dublin and London.

It said reports by international firms such as accountants KPMG, property dealers, Eastdil, and its agent on the Project Eagle sale, Lazard, all support its position.

Nama also argued the market did not support the C&AG’s position, while its report was produced by staff with no market experience of selling loans. It added that the comptroller’s office did not hire specialists in this area to work on its report as it originally had said it would.

“If the evidence of market experts on the discount rate is accepted, the price actually achieved on the Eagle sale was the best price achievable in the market and there was therefore no ‘probable loss’ by reference to the market price,” Nama’s statement said.

Irregularities

It also claimed that, contrary to recent reports, there are no findings of irregularities in the sale process. Part of the controversy over the deal stems from the involvement of former Nama adviser, Frank Cushnahan, in an unsuccessful bid and that he appeared to have information about developers' debts to the agency.

The statement said the C&AG established no link between Mr Cushnahan’s actions and the sale’s outcome or the price ultimately achieved.

“The report finds and confirms Nama’s position that no member of the Northern Ireland advisory committee had access to confidential Nama information on any debtor or asset,” it added.

Mr Daly stressed that the agency had the utmost respect for the C&AG and his staff and acknowledged that they had performed an important task in scrutinising Nama over the last seven years.

“Regrettably the key conclusions in this report are without the relevant loan sale market expertise and as such we have no option but regretfully to reject them categorically,” he said.