Report published into sale of NAMA's Northern Ireland loans

Cabinet has agreed to investigate the sale of Project Eagle

 Report published into sale of NAMA's Northern Ireland loans

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Tánaiste Frances Fitzgerald has insisted that a Commission of Investigation may not be the best form of inquiry into the sale of NAMA's Northern Ireland loans.

The Cabinet earlier agreed that the sale should be investigated after examining a report by the Comptroller and Auditor General (C&AG). However, the exact format is to be agreed with the opposition.

The report into NAMA's €1.6bn sale of Northern Irish loan portfolio Project Eagle says the loss to the Irish taxpayer was about stg£190m (€222.6m).

The 158-page report says the agency incurred a net loss in 2014 of stg£162m (€189m) from Northern Ireland debtor asset sales - most of which related to Project Eagle.

It says this was in addition to losses of stg£478m (€560m) on the loans which had already been recognised in impairment charges.

"The decision to sell the loans at a minimum price of £1.3 billion involved a significant probable loss of value to the State of up to £190 million in NPV terms," the report says.

It also found that NAMA had a total of 56 debtor connections based in Northern Ireland, whose loans were secured by over 900 properties, mainly located in Northern Ireland (50%) and Great Britain (38%, mostly outside London).

The review adds that NAMA planned to dispose of the property over the medium to long term.

It also says that the disposal proceeds from Northern Ireland debtors in 2014 amounted to a total of stg£1,322m - comprised of stg£1,137m from the disposal of the Project Eagle loan portfolio and stg£185m from the disposal of other Northern Ireland debtor loans and properties.

"An additional stg£9 million was received from sales of Northern Ireland debtor assets in December 2013. Disposal costs for the portfolio incurred by NAMA amounted to stg£6m," it adds.

"A very serious report"

Tánaiste Frances Fitzgerald told Newstalk Drive they had no choice but to launch an investigation.

"We accept it as a very serious report from the Auditor General.

"Now what you have is a complete...response to that which disagrees with its findings from another important body.

"So we are faced with this situation where you have the report from the C&AG - and you have a contradiction of many of its findings from NAMA.

"What we were faced with was a decision - first of all did we think that what was in the report merited further investigation and the answer to that was yes."

Asked about how concerns raised in the report may extend to Finance Minister Michael Noonan, Ms Fitzgerald replied: "There are areas for further investigation, and we do want to look carefully."

NAMA 'categorically rejects' report

Meanwhile, NAMA has said it "disagrees fundamentally" with many of the conclusions reached in the report.

In a letter to Finance Minister Michael Noonan, NAMA chairman Frank Daly said the agency intends to "rebut these comprehensively and vigorously at the earliest appropriate opportunity".

The board said it "rejects categorically the C&AG's conclusion that the decision to sell Eagle portfolio at a minimum price of £1.3 billion involved 'a significant probable loss of value to the State'".

Mr Daly said that if the sale did not go ahead at the time, there would never have been a buyer for the loans.

"It's very clear to us that if NAMA had retained the Eagle Portfolio, there would now be no investor interested in buying it today - or in the foreseeable future - at anything close to the 1.3 billion sterling that we achieved for that in 2014."

"PAC will wish to convene a public hearing"

In a statement earlier, the Government said the report "raises a number of important issues which the Government acknowledges will require further investigation".

"The Public Accounts Committee is an appropriate forum for consideration of the C&AG report and for the exercise of public accountability in these matters.

"The Government expects that the PAC will wish to convene a public hearing at an early date. It would welcome such a public hearing and will offer any support that the PAC needs in the conduct of its inquiries."

The Government added that it recognised its responsibility "to ensure that all matters of public concern with regard to the functions of an important public body such as NAMA are fully addressed".

It said that Mr Kenny will invite opposition party leaders to meet him tomorrow with a view to seeking agreement on the investigation - and the most appropriate nature and terms of reference for it.

It is hoped the matter will then be the subject of a Dáil debate early in the new session.