There “may not have been” an actual conflict of interests in relation to the proposed sale of the Northern Ireland loan book to investment fund Pimco, a Belfast court heard on Wednesday.
Aideen O’Reilly, the former head of the legal department of the Dublin-based National Assets Management Agency (Nama) was the latest witness called to give evidence at a fraud trial being held in Belfast Crown Court.
She worked for Nama from 2010 to 2017 and was asked a series of questions regarding the workings of the Northern Ireland Advisory Committee (NIAC).
This committee was established by Nama to advise in respect of property debts in Northern Ireland and one of its external members was corporate financier Frank Cushnahan.
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The 83-year old from Alexandra Gate in Holywood has been charged with, and denies, an alleged offence of fraud by failing to disclose information between April 1s and November 7th, 2013. A former senior partner of Belfast law firm Tughans, Ian Coulter, from Templepatrick Road in Ballyclare, was also charged with fraud.
The charge relates to the sale of the Northern Ireland property loan book held by Nama, which was set up in the Republic in 2009 following the property crash and banking crisis.
It’s the prosecution’s case Mr Cushnahan was “heavily involved” with American investment firm Pimco, who were potential purchasers of the Northern Ireland loan book, and that he was under a legal duty to disclose any conflict of interests he had which he failed to do.
The purchase of the Northern Ireland loan book became known as Project Eagle.
Ms O’Reilly was cross-examined by Mr Cushnahan’s barrister Frank O’Donoghue KC and was asked about the functions of NIAC.
She said NIAC “had a function to advise and make recommendations. It had no power in the sense of the ability to take a decision that would then be executed in the real world.”
When it was put to Ms O’Reilly that “it really doesn’t look as if it was doing anything”, she replied “it always had powers to make recommendations because that in effect was its purpose, as an advisory board”.
Mr O’Donoghue then asked Ms O’Reilly about a Commission of Investigation report on Nama’s disposal of the Northern Ireland loan portfolio which was submitted to the then taoiseach and published in October 2024.
The defence barrister was asked about comments attributed to her in the report regarding NIAC and the legal obligations of members to disclose information or conflicts of interest.
After confirming she was the Nama head of legal quoted in the report, Mr O’Donoghue read a section attributed to her which said ‘The interest must relate to a function to be performed.
‘Where a function is to be performed and a person has a material interest in the matter to which the function relates, disclosure must be made and save in exceptional circumstances the function shall not be performed.’
Continuing reading from the report, Mr O’Donoghue said it was stated “in relation to NIAC, members of the committee did not perform any function in relation to debtors or managing loan portfolios or offering any loans for sale, so no disclosure would have been required”.
Asked if this was a “faithful transcription” of what was said, Ms O’Reilly said it was and then said that as she recalled, it related to the Project Eagle loan sale.
She added: “The committee would have to have a specific function with regard to that loan sale for a hard conflict of interest situation to arise. That was the gist of the point I was making.”
When asked if, in her opinion, the committee had that function, Ms O’Reilly replied “no” then said “for example, the board [of Nama] had hard functions on that loan sale . . . the Northern Ireland Advisory Committee was advising only and didn’t make decisions that were then executed and had real affects on assets for sale.
“That advisory committee couldn’t approve the sale or reject the sale.”
Ms O’Reilly was also questioned by prosecution barrister Jonathan Kinnear KC about her comments in the report about NIAC members not performing any functions in relation to debtors and managing loan portfolios and sales so no disclosures would have been required.
Asked what she was talking about, Mr O’Reilly spoke of an “actual or perceived” conflict of interest.
She said: “I think the point I was making was for there to be an actual conflict of interest the statutory language must be met and therefore there has to be a specific function to be performed and an interest relating to that function which would obviously not apply to a perceived conflict of interest.
“I think that was the point that I was making, that there definitely was a very high risk of a perception of a conflict of interest here but there may not have been an actual conflict in relation to Pimco, in relation to that loan sale.”
