# How the media reports on NAMA...



## Brendan Burgess (9 Jul 2015)

I got the impression from listening to some of the commentary that NAMA had done something wrong or underhand with the sale of a portfolio in Northern Ireland.  From my limited understanding of what happened, it didn't seem to have been NAMA's fault at all. 

Their PR company issued this press release this morning: 

*There are a number of serious errors occurring in Irish media coverage of the NAMA / NI Loan Sale story.

Three stand out as follows:

There is no PNSI investigation of the sale of these loans by NAMA.  The PSNI is investigating activities relating to the purchase of these assets NOT the sale.  This is a critical difference.
There is no truth to the suggestion that £7m of the sale proceeds of this transaction ended up in an Isle of Man bank account.  NAMA received the FULL proceeds from this sale.  The origins of that £7m are not NAMA and there has been no suggestion that it was but many media continue to make this error.
Finally some media have mistakenly claimed that NAMA sold assets that were valued/worth circa €5bn for circa €1.5 bn.  Again this is simply wrong and is a very serious error.  NAMA sold the assets for exactly what they were worth and not a cent less.  The assets may – years earlier – have been worth more but the fall in their value was a result of the property crash and they were not worth anything more that the price NAMA achieved when sold by NAMA.  
These errors damage NAMA and mislead the public and we ask you to make sure that your copy does not simply repeat them unquestioningly.  *


----------



## Sunny (9 Jul 2015)

All very well but it is a bit of a selective press release trying to pretend there are no questions at all for NAMA to answer. I can think of a few.

a) What actions did NAMA take when they were advised by PIMCO that they were being asked to make third party payments in relation to the transaction. Did this not set off alarm bells for compliance? Especially when PIMCO warned NAMA that a former member of their advisory committee in NI was involved.
b) What knowledge of the portfolio and NAMA strategy did Frank Cushnahan have as a member of their advisory committee? What steps did NAMA take to ensure that any inside knowledge could not be used to the detriment of NAMA? Did they raise concerns with the bidders about the involvement of this individual.
c) Why was the portfolio sold in one large tranche when best practice and NAMA's way of operating was usually to break large portfolios into tranches as they are easier to value and usually obtain a higher price?
d) What political interference from North and South was there in the way that NAMA managed the sale of their NI portfolio?

I don't know why they issued that statement rather then just saying we have nothing to hide and will cooperate fully.


----------



## Brendan Burgess (9 Jul 2015)

Sunny said:


> I don't know why they issued that statement rather then just saying we have nothing to hide and will cooperate fully.



Because the media were making factual errors in their reports.   Some reports gave the impression that some of the sale proceeds had ended up funding a politician rather than in NAMA.  

And almost all the media report "loans worth €5 billion were sold for €1.5 billion".  

Your questions are indeed valid, but the key thing is to stop the media from perpetuating complete falsehoods. 

Brendan


----------



## Conan (9 Jul 2015)

Mick Wallace's main point implied that £7m of NAMA money had somehow found its way to an Isle of Man account and that the Irish State/Taxpayer had lost out. That seems not to have been the case and the media, Sinn Fein etc are trying to expand the issue by implying that NAMA undersold the assets (by confusing the original values with current values). If a lawyer in Belfast misappropriated £7m of his own company's funds, how is NAMA to blame for that? 
I find Mick Wallace's concern for the Irish taxpayer more than ironic since he/his company is guilt of failing to pay tax due to the Irish State and he/his company failed to transfer collected employee pension contributions over to his employees pension scheme.    
Listening to Fierce Doherty it seems that SF want the State to be running Commissions of Inquiry into everything (other than certain sex abuse claims, fuel laundering scams, cigarette smuggling etc). If he had his way he would have the whole of the Law Library fully employed chasing wild geese.


----------



## Sunny (9 Jul 2015)

Just because Mick Wallace (who should only be getting out of jail now) raised it doesn't invalidate the concerns. Same with Catherine Murphy and Siteserv. I don't know of anyone in the media or outside who are implying that NAMA paid £7m into a slush fund. That doesn't mean that NAMA gets to wash their hands of the whole thing like they are trying to do in that Statement. The issues raised are very serious. If people don't see the seriousness of what PIMCO are saying below which contradicts NAMA and when there are only two bidders interested in buying a multi-billion euro portfolio from the Irish taxpayer, then this Country will never learn. 

_*Pimco decided to withdraw from the Project Eagle tender process, not because of any Nama decision but because of the concerns relating to the third parties that Pimco had identified as part of its due diligence checks,” it said*_


----------



## Brendan Burgess (9 Jul 2015)

Sunny said:


> If people don't see the seriousness of what PIMCO are saying below which contradicts NAMA



How does that contradict NAMA?  If it does, why would you believe PIMCO over NAMA?  

That PIMCO statement seems very vague.  I have no idea what those third parties refer to? 

If, and this is an if,  a former NAMA employee offered to help a potential purchaser for a very large fee, PIMCO could simply refuse to use their services and go ahead and bid as normal.


----------



## Sunny (9 Jul 2015)

Brendan Burgess said:


> How does that contradict NAMA?  If it does, why would you believe PIMCO over NAMA?
> 
> That PIMCO statement seems very vague.  I have no idea what those third parties refer to?
> 
> If, and this is an if,  a former NAMA employee offered to help a potential purchaser for a very large fee, PIMCO could simply refuse to use their services and go ahead and bid as normal.



Because NAMA are saying that they told PIMCO that they had to drop out of the bidding process. PIMCO are saying they are the one's who raised the concerns and they dropped out of the bidding on the back of these concerns leaving one party to bid on the portfolio.
I don't believe PIMCO over NAMA. I also don't believe NAMA that there is nothing to see because they issued a statement like that this morning giving out about sloppy reporting rather than dealing with the substantive issues. That Statement was an attempt to spin the narrative. This thing about the €1.5 v €5 billion portfolio is case in point. At this stage everyone knows about book value of loans. Nobody is accusing NAMA of losing €3 billion but that doesn't mean that there aren't any questions over the valuations. 

We have no idea who all the third parties but is it not worth trying to find out? NAMA as the seller are involved no matter what they might be claiming. And the more I hear, the more this transaction has a whiff about it. Banging on about inaccurate reporting is just spin.


----------



## WizardDr (11 Jul 2015)

All that NAMA did was preside over the biggest fire salvage sale ever. Every thing must go. There will never be a recovery etc.


----------



## jim (12 Jul 2015)

It doesn't seem like Nama have actually done anything wrong here...


----------



## jim (12 Jul 2015)

WizardDr said:


> All that NAMA did was preside over the biggest fire salvage sale ever. Every thing must go. There will never be a recovery etc.



One must assume Nama received plenty of professional advice in relation to the best way to make the sale..


----------



## Brendan Burgess (12 Jul 2015)

Sunny said:


> Because NAMA are saying that they told PIMCO that they had to drop out of the bidding process. PIMCO are saying they are the one's who raised the concerns and they dropped out of the bidding on the back of these concerns leaving one party to bid on the portfolio.



OK, I thought you were referring to the NAMA statement in the first post.

The Indo reports it as follows: 



> In March 2014, Pimco informed the agency that it proposed to pay a success fee of £15m - which was to be split three ways to US law firm Brown Rudnick, Belfast firm Tughans, via its managing partner Ian Coulter, and Mr Cushnahan.
> ...
> Nama then excluded Pimco from the bidding process in March 2014. A month later, the deal was agreed with Cerberus, which was also represented by the same law firms, Brown Rudnick and Tughans.



It does sound a bit odd that NAMA excluded Pimco from the deal and then sold it to a company represented by the sale solicitors. 



Sunny said:


> I don't believe PIMCO over NAMA. I also don't believe NAMA that there is nothing to see because they issued a statement like that this morning giving out about sloppy reporting rather than dealing with the substantive issues.



I must say that I would tend to believe NAMA, a public service body, over PIMCO, a profit maximising fund.  

I know you accuse NAMA of spin, but the same article referred to above says the following: 
_
The Irish Independent has learned that businessmen hired a leading international legal firm to investigate the sale of the 'Project Eagle' portfolio for a huge discount to US investment firm Cerberus last year._

This is sloppy reporting happening after the press statement was issued. "The portfolio was sold for a huge discount"? A huge discount to what? Most people reading that would assume it was a huge discount to its current value. 

NAMA may have timed the sale of this incorrectly. But it's not possible to get the timing of the property market right. 

They may have been a bit too hasty in selling this portfolio, but it's understandable that they wanted to focus their attention on other bigger deals. 

I would be surprised if NAMA did anything dishonest or fraudulent. In an organisation of that size with so much money involved, there will probably be fraud by employees or others dealing with it. But it's unlikely that the top guys are involved in it. 

Brendan


----------

