* Government asks parliament to investigate
* State body says price of loan book was set to low
* 'Bad bank' NAMA 'categorically rejects' accusation
By Conor Humphries
DUBLIN, Sept 14 Ireland's government on
Wednesday ordered parliament to investigate the sale by
state-run "bad bank" NAMA of a multi-billion-pound portfolio of
Northern Ireland loans after a state audit body said it set the
minimum price too low.
The National Asset Management Agency (NAMA) said it
"categorically rejected" that the loan book, dubbed Project
Eagle, had been mis-priced.
Northern Ireland police in July opened a criminal inquiry
into the sale by NAMA to U.S. private equity firm Cerberus
Capital Management of the agency's Northern Ireland loan book
for 1.32 billion pounds ($1.71 billion).
Ireland's Comptroller and Auditor General (C&AG) said in a
report released on Wednesday that the 1.3 billion pound minimum
price for soured loans with a par value of 4.5 billion pounds
"involved a significant probable loss of value to the State of
up to 190 million pounds".
The Irish government said the report raised "a number of
important issues which the Government acknowledges will require
further investigation" and said parliament's Public Accounts
Committee should investigate.
Britain's National Crime Agency, the U.S. Department of
Justice and a committee in Northern Ireland's regional
parliament are already investigating the deal.
Cerberus has said that no improper or illegal fees were paid
by it or on its behalf. NAMA has said it did nothing wrong and
secured the best price it could for the assets.
NAMA said the C&AG was incorrect in assuming that NAMA
should have applied the same 5.5 percent discount rate it
typically used for assets in Dublin and London and was correct
to apply a larger 10 percent discount rate for the "poor
quality" Northern Ireland loans.
It said four specialist international firms had supported
"It is clear to us that, if NAMA had retained the Eagle
portfolio, there would be no investor interest in buying it
today - or in the foreseeable future - at anything close to the
1.322 [billion pound] price that was actually achieved," NAMA
Chairman Frank Daly said in a statement.
Set up to rid local banks of the risky loans left on their
books, NAMA paid 32 billion euros - equivalent to 20 percent of
Ireland's annual economic output - for 74 billion euros worth of
One of the world's largest property groups, it plans to pay
back its debts by 2018 and make a profit of at least 2.3 billion
euros as it cashes in on a surge in demand for Irish real
Inquiries into the deal were begun after an independent
member of the Irish parliament, Mick Wallace, in July raised
concerns about the Project Eagle portfolio, alleging that a 7
million-pound fee had been "earmarked" for a Northern Ireland
($1 = 0.7591 pounds)
(Reporting by Conor Humphries; editing by Ralph Boulton)