Mr. Seamus McCarthy:

I thank the committee for the opportunity to comment on some of the issues raised in the hearings. I thought I might discuss briefly four or five key matters that have come up on a number of occasions. I have not prepared an opening statement because I am quite happy that my original opening statement stands. That is my summarisation and presentation to the committee of what the report contains, and I would like to put on the record that I am still satisfied with my report.

Regarding the PIMCO letter, Deputy Cullinane put a number of questions to me, so I will make a number of comments in response. First, the point as to whether the board of NAMA knew that negotiations had gone on in April 2013 was, I think, the point which was raised with Mr. Ellingham and which he corrected on the record today. As Deputy McDonald has said, the minutes of the board meeting of 13 March record the fact that the success fee arrangement had been discussed. The minutes state "The Board noted that PIMCO had advised that the negotiations had commenced in April 2013 and noted further that Frank Cushnahan had not resigned as a member of the Northern Ireland Advisory Committee until 7th November 2013 nor had he made any disclosure of his involvement." Those are the facts. I am reading from paragraph 5.19 on page 93 of the report. Moving to page 94, NAMA responded to that. It states in paragraph 5.26:

NAMA was not aware in March 2014 of success fee negotiations that may have taken place in April 2013 between various parties. The minutes of the Board meeting of 13 March 2014 state that “the Board noted that PIMCO advised that the negotiations had commenced in April 2013”. This disclosure was taken by the Board to mean that negotiations between PIMCO and Brown Rudnick had commenced in April 2013, and not that negotiations over success fee payments had commenced at that stage.

That is NAMA's official position on that point.

The question arose as to what advantage there would have been to PIMCO of Mr. Cushnahan's involvement and what success might have meant in that case. I take the Chairman's point about not engaging in speculation. I do not want to engage in speculation as to what that advantage might have been. However, there was a point in the paper put to the board in December 2013 on page 146. It discusses the non-performing loan, NPL, discount. I will come back to the discount rates, but the paper states:

In general, acquiring non-performing loans, without an agreed strategy and consensual plan to simultaneous [sic] take direct ownership of the secured property or shares, carries significant risk.

[Asset recovery] is not aware of any such plan between PIMCO and existing NAMA borrowers.

The significance of that is that the level of discount that a purchaser of non-performing loans would seek can be affected by the extent to which there is an arrangement or whatever in place with the non-performing debtors. I am not suggesting that is the situation, but there is that risk and the committee might wish to consider it as well.

Another point in that regard is that any bidder for Project Eagle or any other purchase of loans in NAMA would have been required to sign a declaration stating that it did not have a connection with any of the debtors. That is an obligation that would have been faced by PIMCO had they gone ahead with the purchase. A declaration of that nature was made under section 172 of the NAMA Act, that that would be an obligation on PIMCO. It was an obligation on Cerberus, which, in fact, signed such a declaration. Those are the comments I have to make regarding the issues that come up in the PIMCO letter.

If the Chairman wishes, I can make the four or five points I want to make and then if the committee wishes to discuss them at that point and dispose of them, that is fine.