Financial watchdog urged to investigate Nama deal which saw €455m in assets sold to US multi-national firm

Ireland's independent financial watchdog has been urged to investigate a previously unknown Nama deal which saw €455m worth of assets sold to a US multi-national firm suggested by the developers who originally owned the loans, writes Fiachra O Cionnaith.

Fianna Fail finance spokesperson Michael McGrath called for the examination just days after Taoiseach Enda Kenny confirmed the separate Project Eagle inquiry is set to begin and will provide an initial report within three months.

In a parliamentary question response to Mr McGrath, Finance Minister Michael Noonan said the Project Tolka deal saw €455m worth of assets - including the Burlington Plaza in central Dublin and the Clarion Hotel in Liffey Valley - sold after a limited bidding process.

After an initial 16 potential bidders were considered, three were ultimately chosen after a short selection process which controversially also included the developers who originally owned the loans - John Flynn, Paddy Kelly and the Dublin-based McCormack family - helping to decide who should be selected.

At no point were the assets, which were sold at a 70% discount, put onto the open market to examine whether the State could make more money from the sale by considering a wider number of bids.

The formal response from Mr Noonan said the fact the three bidders were selected after 16 potential bidders were initially considered meant the bidding process which was eventually won by US group Colony Capital was competitive.

However, speaking on RTE Radio, Mr McGrath said the situation is not acceptable and the the C&AG must now launch a detailed investigation to ensure the deal was "fully open and competitive".

"It is difficult to understand the reason why such a selective approach was taken by NAMA in relation to potential bidders. A peculiar aspect of this sales process is that debtors and NAMA agreed on the list of credible potential bidders.

"I think there needs to be an explanation as to why the debtors had an involvement in the selection of potential bidders.

"I certainly believe the C&AG should examine this transaction and take a wider look at the disposal strategy of Nama, and look at the number of exceptions there has been to open market sales.

"In how many cases did they adopt a similar approach?" he asked.

The latest Nama-related controversy comes just days after Taoiseach Enda Kenny told formally moved to set up an investigation into the separate Project Eagle scandal.

After a Dail public accounts committee report into the issue, Mr Kenny confirmed he is setting up the full State inquiry, which will include an interim report within three months and will see Mr Noonan interviewed over his role in what happened.

The inquiry's draft terms also include plans to examine potential Nama conflicts of interests and success fees to former Nama advisor Frank Cushnahan.

KEYWORDS: nama, finance, us


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