Mick Wallace claims Cerberus was involved in ‘insider trading’

US investment fund Cerberus was involved in “insider trading” on a German supermarkets loan linked to the controversial Project Eagle sale, Independents4Change TD Mick Wallace has claimed.

The loan was owned by a Northern Ireland-based debtor, he said.

Mr Wallace was speaking as the Dáil debated the terms of reference for the commission of investigation into the National Asset Management Agency (Nama) sale of Project Eagle, bought by Cerberus more than £1.1 billion.

Minister of State Paul Kehoe introduced the debate and confirmed that former High Court judge Mr Justice John Cooke would chair the commission.

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Mr Kehoe said the Government had agreed to the commission but he said it would cost millions of euro.

In a new allegation, Mr Wallace said Cerberus had agreed to buy the German supermarkets loan, known as Project Shift, for £76 million, before Project Eagle was officially launched.

He alleged its assets were then included in the larger sale, the entire portfolio of bad debt loans by Northern Ireland-based debtors of some 800 properties and sites.

He said the only other bidder for Project Eagle, Fortress, had no knowledge of this German supermarkets loan and he accused Cerberus of insider trading.

Extraordinary

Mr Wallace claimed a side deal was done on the supermarkets and included in the price of Project Eagle, but unknown to the other bidder. Mr Wallace has called for the Public Accounts Committee (PAC) to investigate all aspects of the sale.

He said that Nama executive Ronnie Hanna ran the Project Shift sale.

Mr Wallace added that the second external member of the Northern Ireland advisory committee, Brian Rowntree, confirmed the German supermarkets were never discussed by the committee.

Mr Wallace claimed Nama said it could not establish if external Northern Ireland adviser Frank Cushnahan was involved in the Project Shift sale. He said it was “extraordinary” that Nama could not say if he was.

He said the final reserve price for Project Eagle was £1.23 billion and Cerberus bid £11 million more than the reserve price. He said Cerberus paid £1.137 billion, £104 million less than their own bid. This was due to process and sales completion and included Project Shift.

Cerberus knew they were getting Project Shift, but Fortress did not know about the extra loan.

The Wexford TD asked: “Why didn’t Nama write to all bidders for Project Eagle and inform them that a debtor was sale agreed for £76 million and this might be removed?”

Mr Wallace said that Nama had cost the State in a day what social welfare fraud would cost in a year.

Sinn Féin finance spokesman Pearse Doherty said that if the Dáil had done its job right and introduced robust legislation with “no excuses for the mistakes of the past”, there would not be a need for a commission.

“We don’t do white-collar crime in this country unless you’re going on the script of Leo Varadkar and it’s social welfare. But when it’s white-collar crime of hundreds of millions or billions then it’s a free pass.”

Concern

Mr Doherty said he valued the work of the PAC and paid tribute to the committee for not letting the Project Eagle issue go. But he said it was unnecessary because all the evidence was already there and he welcomed Fianna Fáil’s agreement to the commission after they “blocked” it 11 months ago.

He added that the issue of Minister for Finance Michael Noonan meeting Cerberus the day before the bids on the deal were due was not the biggest issue.

The major issue was that “we have a State agency that controls billions of euro and we have fixer fees, conflicts of interest, offshore accounts, ease-of-business ministerial interventions and political to political interventions”.

Fianna Fáil finance spokesman Michael McGrath said the handling of the Project Eagle sale probably cost the State €190 million. He said there was legitimate public concern about the process.

He said the Government’s “aggression” in defending its actions had been especially striking and he noted Mr Noonan’s attack on the chairman of the PAC.

He said “the Government has sought to frustrate and dismiss concerns and potentially undermined the process”.

He welcomed Mr Kehoe’s assurances that any issues identified in the interim report would be addressed.

PAC chairman Seán Fleming stressed that if any changes were made to the terms of reference it should come back to the Oireachtas for approval.

Mr Fleming said he believed that the minimum price was set by the bidder. He added that Nama was unable to demonstrate that they got value for money.

Independent Danny Healy-Rae said the commission was too late. “It is closing the stable door when the horse has gone down the road.”