Two Arrested In Ireland 'Bad Bank' Probe

Two men have been arrested as part of a probe into the £1.3bn sale of property loans by Ireland (Other OTC: IRLD - news) 's so-called "bad bank" to a US private equity firm.

The inquiry centres on the sale by Ireland's National Asset Management Agency (NAMA) of its portfolio of Northern Ireland-based loans to Cerberus Capital Management.

It (Other OTC: ITGL - news) was launched after Mick Wallace, an independent member of the Irish parliament, raised concerns about the portfolio of loans – alleging that a £7m fee had been "earmarked" for a Northern Ireland politician.

A spokesman for the National Crime Agency (NCA) said: "Officers from the National Crime Agency have today carried out two arrests and related searches in the Co Down area in connection with a fraud investigation.

"The operation is being assisted by the PSNI (Police Service of Northern Ireland).

"As the investigation is continuing we are unable to comment further."

The arrests were the first in the investigation into the NAMA loan sale to Cerberus, the NCA said.

Cerberus has said that no improper or illegal fees were paid by it or on its behalf. NAMA says the police investigation has not suggested it behaved improperly.

NAMA was the initiative to stabilise Ireland's banking system after it became over-exposed to property development between 2003 and 2007.

Under NAMA, four of Ireland's banks are being paid at discount rates for property-related loans over €5m (£3.6bn), good and bad.

Its £4.5bn Northern Ireland portfolio was sold to US firm, Cerberus Capital Management, for a knockdown £1.3bn in April 2014.

Parliamentary inquiries have been conducted in Stormont and Dublin amid a raft of allegations about the deal.