Nama rejects criticism of Project Eagle sale strategy

Agency dismisses PAC critique of ‘deficient’ process marked by governance failures

Nama has rejected criticisms from the Public Accounts Committee that an alternative sale process would have delivered a better outcome for taxpayers from the sale of the Project Eagle loans in Northern Ireland to US private equity group Cerberus in 2014.

This follows criticism from the PAC’s report that the sale process was “seriously deficient” and that Nama had failed to demonstrate that it got “value for money” for the State in relation to the €1.43 billion price achieved from the sale of Project Eagle.

In response, Nama said: “It was the board’s commercial and considered judgment, in full knowledge of the financial implications, that the sale of the Project Eagle loan portfolio provided a better financial outcome than any alternative monetisation strategy. That was the board’s view in 2014 and it remains the board’s view today.”

Nama said the losses arising from Project Eagle would have arisen irrespective of whether the portfolio was sold in 2014 or retained.

“Deferring the sale would not have produced a better financial outcome. The commercial reality is that the Northern Ireland property market and many regional markets in northern Britain, where many of the portfolio’s underlying assets are located, have been challenging and are likely to remain challenging for the foreseeable future,” it said.

The PAC also criticised Minister for Finance Michael Noonan and senior Nama figures for meeting representatives of Cerberus in the days leading up to the close of bidding for Project Eagle, saying this could have given the perception of preferential treatment.

In a statement, Mr Noonan rejected the suggestion that he acted inappropriately in meeting with Cerberus in March 2014.

The PAC started investigating the sale of the Project Eagle loans following a report from the Comptroller and Auditor General (C&AG) which said Nama could have lost about £190 million (€216 million) on the £1.2 billion sale.

Nama has strongly disputed this, but the committee, in its final report on the issue published on Tuesday, has broadly backed the C&AG reports, saying it was “evidence-based, balanced and reasonable”.

The committee said the sale led to a recorded loss of £162 million in Nama’s account, while the agency recorded losses totalling €800 million in respect of its Northern Ireland loan portfolio between 2010 and 2014.

It said the sale of Project Eagle was not a well-designed process and that Nama has been unable to demonstrate that it got the best possible price for the assets.

In a strong criticism of the way Nama conducted the sale, the PAC found that the process “was marked by inadequate record-keeping, weaknesses in relation to the management of conflicts of interest, a seriously deficient sales process and, ultimately, an inability by Nama to demonstrate that it had obtained best value for money for the State.”

The committee said it appeared that key elements of the sales strategy were influenced by US company Pimco, which made the initial approach to Nama for the portfolio. In a key section of its conclusions, the PAC says that "it is the view of the committee that Nama was influenced by the Pimco proposal when deciding on the minimum reserve price and key elements of the sales process".


Project Eagle, has been mired in controversy over claims that business and political figures were to benefit from the deal.

Pimco, left the auction in early 2014 after telling Nama it had discussed paying a former member of Nama's Northern Ireland advisory committee, Frank Cushnahan, Belfast solicitors Tughans and US lawyers Brown Rudnick a £16 million success fee between them. The committee was also critical of the limited number of new bidders allowed into the process when Pimco dropped out.

The successful bidder, US vulture fund Cerberus, hired Tughans and Brown Rudnick after Pimco’s exit and paid them £15 million.

According to the PAC, Nama’s failure to effect Frank Cushnahan’s removal from its advisory committee, following his disclosures in relation to provision of consultancy services on behalf of a number of Nama’s Northern Irish debtors, “was a failure of corporate governance”.

It was also critical of the failure of Nama to contact Mr Cushnahan when details of his alleged relationship with Tughans, Brown Rudnick and Pimco emerged. At that stage, “Nama should have considered the extent, if any, to which the sales decision and process had been compromised.”

The report is, as expected, critical of Mr Noonan. It says it was not “procedurally appropriate” for Mr Noonan to meet with Cerberus the day before the closing date of the bidding process, as it could have given the perception of preferential treatment.

Acted inappropriately

Speaking on Tuesday, Mr Noonan said he denied “absolutely” the suggestion that he acted inappropriately in meeting with Cerberus in March 2014.

“At no point was I or my officials invited to discuss this meeting at the PAC nor was the alleged impropriety of this meeting raised in follow-up correspondence. The note of the meeting with Cerberus is on the Department of Finance’s website and is clear in stating that any issue relating to Nama should be raised directly with Nama,” he said, adding that rather it was “ entirely appropriate” that he should meet with the chairman of a major international investment fund, “a former US secretary of the treasury no less”, at his request while he was in Dublin on business.

“This is part of the job of a minister for finance.”

The PAC report said Taoiseach Enda Kenny has accepted in principle that a commission of investigation should look into the sale of Project Eagle, adding that this should now proceed.

Other aspects of the Project Eagle sale are still being investigated by the US department of justice, the US securities and exchange commission, and the UK national crime agency.

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist