An accountant involved in the early stages of trying to secure a purchaser for Nama’s Northern Ireland loan book said on Tuesday he had no reason to doubt the motivating factor for all those involved was “the benefit of Northern Ireland.”
This, the witness said, included corporate financier Frank Cushnahan, who is currently on trial at Belfast Crown Court.
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 1st and November 7th, 2013.
The charge relates to the sale of the Northern Ireland property loan book held by the National Asset Management Agency (Nama), which was set up in the Republic in 2009 following the property crash and banking crisis.
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In response to questions from prosecuting barrister Johnathan Kinnear KC, David Watters said part of his work involved property transactions. He said he was aware of the establishment of Nama in 2009 and the subsequent Northern Ireland loan book.
Asked if he had a plan in relation to Nama’s NI portfolio, Mr Watters said that, around November 2011, he “developed a plan” for the entire loan book which involved securing one buyer to purchase the entire portfolio “as that was the most effective way of satisfying everybody’s needs”.
When asked if he would have expected a success fee, Mr Watters said the “primary goal was to achieve the objective of having the portfolio bought out” and if that resulted in a fee, “so be it.”
Pressed on what he did to move his idea forward, he said he realised it would need to be “promoted within both sides of the Border at a political level” and would require “somebody who was well enough connected to pursue it at a political level”.
Mr Kinnear was asked if he had anyone in mind at the time for that role and he replied: “One of the most obvious people to me was Mr Frank Cushnahan. He was known to me since the 1980s and he was very well known and connected both with some of the debtor and borrowers but also with the politicians.”
He was aware Mr Cushnahan sat on the Northern Ireland Advisory Committee – was set up by Nama to advise on the property debts in Northern Ireland.
Mr Watters said he met Mr Cushnahan in a Belfast restaurant in Belfast in November 2011 and gave him a draft investment proposal regarding a single buyer for the portfolio.
Asked what Mr Cushnahan’s response to the proposal was, Mr Watters said: “He thought it would be a very good idea to proceed with it but he did flag up that he might have a potential conflict as a consequence of his involvement with the advisory committee.”
Mr Watters said he and Mr Cushnahan spoke about the proposal again the following month. The pair discussed how best to proceed and Mr Cushnahan suggested some changes to it. At the conclusion of the meeting, Mr Watters said he believed Cushnahan was going to talk to relevant parties.
Mr Watters said he attended further meetings facilitated by Mr Cushnahan with representatives of two separate investment funds. Neither ultimately made bids to buy the Northern Ireland debtor book.
Defence barrister Frank O’Donoghue KC, representing Cushnahan,
suggested the proposal Mr Watters presented to Mr Cushnahan in November 2011, was in its “embryonic stage”, Mr Watters agreed.
The defence then asked about the changes made to the proposal by Mr Cushnahan. Mr Watters said Mr Cushnahan’s input was “not substance, more style”.
Quizzed about Mr Cushnahan’s “political role” in his proposed deal, Mr Watters was asked if “this was an idea that you felt was genuinely for the benefit of Northern Ireland”.
“I have no doubt that that was the case,” Mr Watters said. When asked if that was his “motivating drive”, Mr Watters said: “I agree. Wholeheartedly, I agree.”
