Group failed to escape property crash

IT’S A well-worn cliche at this stage – two high-profile developers are brought down to earth spectacularly by Ireland’s property crash. But for a while it did seem that, at Treasury Holdings, things could have been different.

For a long time the group, founded by Richard Barrett and Johnny Ronan, succeeded in standing firm while other big-ticket developers such as Bernard McNamara and Liam Carroll fell by the wayside. Though Treasury was one of Nama’s top-10 borrowers, its relationship with the asset management agency was believed to have been strong.

Cracks in that relationship began to surface last December, when Treasury – which held an interest in Battersea Power Station in London through Real Estate Opportunities – lost control of its majority stake in the landmark site after Lloyds Bank and Nama appointed an administrator to the property.

The following month, Nama moved against Treasury Holdings. The State agency issued a demand for repayment of its loans, estimated at that point to be about €1 billion, within a month.

The move took Treasury Holdings by surprise.

Negotiations between the two ensued throughout January, with Treasury submitting two investment proposals, including one from Australian investment and advisory group Macquarie. The talks broke down, and Nama moved to appoint receivers to the group.

Treasury fought back, going to the High Court in a bid to halt the process, having won leave to pursue a judicial review of Nama’s actions in March. The legal proceedings began in early May.

A month later KBC Bank Ireland entered the fray, serving notice on June 29th that it would seek an order to wind up Treasury unless €20 million was paid within 21 days. KBC, which was owed €75 million by the group, petitioned the court to wind up the group in late July.

A few days later, Justice Mary Finlay Geoghegan rejected Treasury’s case against Nama.

It was a major blow for Treasury, effectively ending any hope of Barrett and Ronan retaining direct control of the Irish portfolio, though mention of a fourth international investor suggested that Treasury was not yet giving up hope.

The tale took another twist when it emerged that two income-generating subsidiaries of Treasury Holdings, which carried out management functions for Singapore-listed Treasury China Trust (TCT) had been sold to a Jersey company controlled by Barrett, just before the mention of KBC’s winding-up petition in the High Court. The news prompted Nama to join KBC in pursuing the winding-up of Treasury.

Meanwhile, trading in shares in TCT, the commercial property developer in which Barrett and Ronan are significant shareholders, was suspended, following an article in The Irish Times which outlined the financial details of the transaction.

Yesterday, Treasury Holdings told the court it was no longer resisting KBC’s application to have it wound up.

The court also heard that the bank did not believe that Treasury had provided an adequate explanation for the transaction of the assets of the Treasury subsidiary in Singapore to the Channel-Island company.

Mr Justice Brian McGovern said he would deal with that issue in an affidavit.

Meanwhile, liquidators are to be appointed to Treasury Holdings and 16 related companies on Tuesday. The development appears to spell the end of the road for the main Irish property activities of Barrett and Ronan.