A former senior partner of Belfast law firm Tughans was questioned on Tuesday about a £6 million transaction fee linked to the sale of Nama’s Northern Ireland loan book.
John-George Willis, who founded Tughan’s corporate department and retired from law two years ago, was called to give evidence at the trial of a corporate financier charged with fraud.
Frank Cushnahan (83) from Alexandra Gate in Holywood is currently on trial at Belfast Crown Court, charged with fraud by failing to disclose information between April 1 and November 7, 2013. He denies the charge.
The charge relates to the sale of Nama’s Northern Ireland property loan book.
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A second man, 54-year old Ian George Coulter from Templepatrick Road in Ballyclare, was also charged with fraud and was being tried alongside co-accused Cushnahan.
After his senior barrister became unwell, trial judge Madam Justice McBride ruled on December 1 the case against him could not continue at this stage.
Asked by the prosecution’s Jonathan Kinnear KC how he knew Frank Cushnahan, Mr Willis said he met him around 1995 or 1996 and that following this, Tughan’s acted for him “for many years after that”.
Mr Kinnear then asked if it was correct that Cushnahan occupied office space at Tughan’s.
Mr Willis said Cushnahan was in the same building at Marlborough House which was previously occupied by a third party but was not connected to Tughans’s phone or computer systems.
The Crown barrister then asked Mr Willis about “specific events” that took place on November 20, 2014.
Mr Willis said he had a discussion with Ian Coulter, a former partner of Tughans, and that following this he and Mr Coulter went to Cushnahan’s office where they were joined by another senior partner, Phyllis Agnew.
When asked what was discussed in the office, Mr Willis said “this event followed on from a previous occasion where Mr Coulter had indicated to us that a fee had been raised” in relation to the sale of the Northern Ireland loan book to investment fund Cerberus.
He continued that in the meeting on November 20th “Mr Coulter said ... that there had been further good news, in fact he used the word excellent good news, in that a further sum of money had been earmarked for a third party and that third party had decided that the further sum of money should be allocated to Mr Coulter in one tranche and the Tughan’s partners in another tranche.”
When asked how much this was, Mr Willis said “the sum was £6 million” and that the third party was a local property developer.
Mr Kinnear then queried if Mr Coulter said anything else and Mr Willis replied: “Mr Coulter went on to ask Phyllis Agnew and me if we would have any problem in paying Frank Cushnahan a consultancy fee but details of that consultancy arrangement were not given.”
Mr Willis then asked if Cushnahan was in the room when Mr Coulter said this and he said Cushnahan was “sitting at his desk” and Mr Coulter was “at his side” when he asked the question.
Under cross-examination by Frank O’Donoghue KC, the barrister representing Cushnahan, Mr Willis confirmed Cushnahan had an office in Marlborough house from 2010 to 2015 and referred work to Tughan’s.
Mr O’Donoghue referred to the meeting on November 20, 2014 and asked Mr Willis if on that date he was aware of the “Cerberus matter”. Mr Willis said he was.
The defence barrister then read a portion of a statement made by Mr Willis in November 2015 about the meeting the previous year.
In the statement, Mr Willis said that before he went to Cushnahan’s office, Coulter asked him if he had ‘any objection to Frank receiving a consultancy fee for the work that he has generated for referring clients to the firm over the last few years.’
When asked by Mr O’Donoghue what he meant in that statement, Mr Willis said: “I’m absolutely clear that what he (Mr Coulter) referred to at the time was the efforts Frank Cushnahan had made to assist us by referring clients over several years.
“He didn’t mention that it was referable to a potential transaction, Cerberus or otherwise.”
Quoting again from the statement, Mr O’Donoghue said in this Mr Willis said that after arriving in Cushnahan’s office Mr Coulter spoke of ‘further excellent news in relation to the Cerberus transaction for himself and for the firm in that a sum of £6 million payable in respect of the transaction had been due to a third party.’
The statement also said that the third party, a property developer, had ‘decided it would instead be payable, £4 million to Ian and £2 million to the firm’.
Mr O’Donogue said Mr Coulter “did not tell the truth” in relation to this as the property development in question – who has already given evidence in the trial – had “no pecuniary interest” in the deal.
Mr Willis said that whilst he was not aware of the property developer’s evidence, he added “this is what I heard from him, from Mr Coulter, at that meeting.”
