Northern venture controversial from the outset
Nama's activity in the North has been plagued by questions
Lanyon Plaza, one of the larger assets in the portfolio
The very first meeting between a Northern Ireland Minister and his Irish counterpart in Dublin to discuss the banking crisis set the scene for how the National Asset Management Agency (Nama) would ultimately play out for the North.
Sammy Wilson had arrived early and mistakenly sat in Brian Lenihan’s chair in his office for the entire meeting back in October 2009. After, when the error was pointed out to Wilson, Lenihan apparently told him he was welcome to take his place.
It turned out however that neither Lenihan nor his successor Michael Noonan were quite so generous when it came to seats once Nama was up and running.
Although the North’s Finance Minister repeatedly asked for a “Northern Ireland seat” on the agency’s board – he never got it.
When Nama was created in 2009 to deal with toxic bank loans it was greeted by more than a degree of wariness by business and political leaders in the North.
At stake were loans with a nominal value of approximately €5.7 billion destined to be transferred to Nama.
The prospect of Northern Ireland businesses losing control of these loans and being at the mercy of an organisation based in Dublin, immune to any Northern influence, caused concern.
Worries about fire sales of Northern property and businesses – and possible job losses – plus the agency’s constant pledge to “obtain the best achievable return for the Irish taxpayer” fuelled anxiety.
Nama’s response to this was to establish a Northern Ireland Advisory Committee, chaired by board member Peter Stewart, which to all intents and purposes would have the North’s best interests at heart.
Two Northern Ireland representatives were appointed in May 2010 to this advisory committee; Frank Cushnahan and Brian Rowntree to ensure this was carried through. But how they were selected remains unclear.
The North’s Department of Finance and Personnel refused to comment yesterday on whether the department or the then Minister, Sammy Wilson, had personally chosen the two representatives.
But according to one presentation delivered by Nama in the North in June 2013 in relation to the advisory committee “external membership was nominated by NI Minister for Finance & Personnel”.
Both were well known in government circles – Cushnahan had long established, close dealings with many politicians in the North including its political leaders through his role as a member of the member of the Office of the First Minister and Deputy First Minister.
Rowntree was also chairman of the Northern Ireland Housing Executive at the time and had held several high profile public appointments.
Both men were initially appointed in May 2010 and then reappointed two years later for a further period of two years to April 2014 “following consultation” with Ministers Noonan and Wilson.
Barely one month later in 2012 both Rowntree and Cushnahan were heavily criticised in a damning report published by the Northern Ireland Audit Office. Cushnahan resigned from the advisory committee in 2013.
This report focused on major maintenance contracts awarded by the Northern Ireland Housing Association to a Belfast construction firm, Red Sky of which Cushnahan was the chairman.
It concluded that there had been “serious weaknesses” in the management of contracts including those with Red Sky.
Before the report was published Rowntree resigned from the NI Housing Executive.
The Independent TD Mick Wallace believes the criticism of both men by the Northern Ireland watchdog body raises a question mark over their continued role with Nama.
Add this to Mr Wallace’s allegations about a £7 million deposit in the bank account of a former partner of the Belfast law firm Tughans following the sale of the Nama portfolio in Northern Ireland to the US private investment firm Cerberus and the result is a new debate about what Nama’s legacy may be in the North. Nama has maintained it was advised by Lazard in respect of the bidding process.
According to Tughans the £7 million which was diverted by its former managing partner, Ian Coulter, to an account of which he was the sole beneficiary, has since been retrieved and he has left the company.
The Belfast law firm confirmed that Coulter had been closely involved in the Project Eagle transaction – Tughans had been retained by the US law firm who had represented Cerberus during the deal.
As the managing partner of the Belfast firm Coulter, who was also a former chairman of one of the North’s leading business bodies, the Confederation of British Industry, enjoyed a high profile role in business and political circles in the North and would regularly have been involved in high level meetings with senior politicians regarding the economy.
He was involved in some of the biggest corporation transactions in the North in the last 10 years.
Coulter played a lead role in the Cerberus deal, which saw them acquire the former Nama portfolio that included 900 assets from residential to retail, offices, hotels and industrial properties spread across the North, the Republic, the UK and Europe – all owned by Northern Ireland borrowers.
Earlier this year Cerberus Capital also acquired a major portfolio of Ulster Bank’s property loans in the North at a knock down rate of about £200 million – the debt portfolio was valued at about £1. 4 billion.
According to the UK’s House of Common’s Northern Ireland Affairs Committee – an influential group of politicians which includes British MPs and Northern Ireland MPs – it is “still too early to say” whether the Cerberus deals – particularly its acquisition of the Nama portfolio will be “excellent news for the Northern Ireland economy” as it was heralded by the North’s First Minister Peter Robinson.
The committee has said: “We find it strange that no Memorandum of Understanding was agreed between the NI Executive and Cerberus, and therefore recommend that the NI Executive keeps a close eye on this situation.”
It could be one of the questions that chair of the North’s Assembly’s finance committee, Sinn Féin’s Daithí McKay, might raise when he convenes an emergency sitting to investigate.