Forgive the sexism – and remembering the always-entertaining Rumble in Ranelagh – but you would have to wonder how Treasury came up with a codeword – TAIL – for what looks like a controversial financial transaction in 2010 in which €20m of shares in a company called China Real Estates Opportunities (CREO) were transferred out of the Treasury group to the apparent benefit of Johnny Ronan and Richard Barrett in return for €100,000. NAMA has been trying to reverse this transaction for some time.
As it happens TAIL is an acronym, derived from Treasury Asia Investments Limited, and what happened was that Treasury sold €20m of shares in CREO to a company called Daylasin Limited. Now hang in here, it sounds more convoluted than it is! Daylasin Limited changed its name to Treasury Asia Investments Limited (TAIL) and TAIL sold the €20m of shares to Messrs Barrett and Ronan for a consideration that appears to be worth just €100,000. It’s not quite the sale of a €160m Moscow office block for the price of a laptop, but it seems to be in the same league, even if there hasn’t been any formal allegation of shenanigans by NAMA yet.
The transaction caused NAMA “grave concern” according to Mary Birmingham’s affidavit (paragraph 54) because, to state the bleedin’ obvious, it diminished the value of Treasury’s assets. And that further, the “making good of the financial damage caused to Treasury by the TAIL transaction has been a central requirement of NAMA at all material times” and “at no stage has NAMA accepted the propriety of what was done in the TAIL transaction”
It seems that the Treasury position is that the TAIL transaction was “legitimate” and conducted at open market values, though how to square that with NAMA’s claims isn’t immediately obvious.
NAMA Wine Lake 
Ah lovely to see the best and brightest of Irish entrepreneurial jet setters at work.
We are continually lectured by da media that these and there ilk must be motivated by tax breaks to lead the country out its valley of doom.
Let’s here the usual right wingers heap praise on these enlightened spirits….
anyone ready to rally to the free market cause……
IBEC, CIF, BFA, SFA……
Ronan and Barrett are playing the game as they see it. The objective of the game is to get away with as much as you can. The game has no rules, other than to not get done for it in a court of law. And the game does not give extra bonus points for what might be termed faithfulness to the lowly taxpayer, or economic patriotism of any sort.
I am completely confused. Could you clarify a few points please.
Which Treasury sold the shares? Treasury Holdings or TAIL? Is there a distinction?
You’ve totally lost me. What is a consideration? You mean they sold the shares to them for €100,000? For €2.1 million? For €1.9 million? How much did Barret and Ronan pay for the shares? Were they paid a fee in addition? I am totally lost.
This is anything but obvious to me. Didn’t Treasury get €20 million in cash from the sale of the shares? How did they lose it? Do you mean TAIL? Can you outline in more simple terms where money changed hands here.
My head is in a tailspin.
@OMF, apols for nor being clearer. “consideration” is really a law of contract term and means something of value that you give for something else. So buy a Mars bar in a shop and give them 50c and the “consideration” is 50c. You could also decide to swap your car for your neighbour’s boat, and in that case your car is the “consideration”.
So in this TAIL transaction there are three parties
(1) Treasury Holdings
(2) Daylasin Limited which later changed its name to Treasury Asia Investments Limited (TAIL)
(3) Messrs Barrett and Ronan
And here were the steps as suggested by Mary Birmingham’s affidavits
(1) Treasury Holdings transferred €20m of shares to TAIL. The consideration here was an IOU from TAIL.
(2) TAIL transferred the shares to Messrs Barrett and Ronan for a consideration that seems to be worth only€100,000.
So the implication is that Messrs Barrett and Ronan received shares with a value of €20m and paid just €100,000 for them. That seems to be disputed by Richard Barrett but it is not clear on what basis it is disputed.
OK that’s a little clearer. Is it also the case that TH did not even receive cash for the original shares?
Accountamancy I expect. This whole operation is founded on the principles of making figures dance in the books.
While receiving over 100,000,000 in funding,alwafully embarrassing for Brenadan,he was a colleague of Bruder during his very brief soujourn in private practice.If NAMA had done just one thing right here,get the personall guarantees from the partners BEFORE,funding they could have avoided looking like a bunch of incompetent amateurs.
It all depends what the value of the €20 million of shares was. Was it €20 million or just €100,000?
Mary Birmingham needs to clarify what she is saying. For arguments sake Bank of Ireland shares could have a face (or issue) value of €1, but only be worth 10 cent. Or to put it another way, the face value of the loans acquired by NAMA were €74 billion, but their market value at acquisition was only circa €31 million? (In their dreams – but we won’t go there)
So a little less obfuscation would be welcome. What was the market value (not the face value) of the shares?
@WSTT, a fair point about incomplete information, but why would NAMA want the transaction reversed unless the shares were worth more than the consideration apparently paid by Messrs Barrett and Ronan. That said, it is to be noted than in two years NAMA hasn’t gone to the courts to reverse the transfer.
@NWL, I’ve no idea what the shares are worth, but I agree with you and would be surprised if they were not worth more than €100,000. The question is “how much are they worth?” NAMA never put a figure on it — Very sloppy, Mary.
is the tail wagging the dog?
@WSTT,what you think some housekeeping,removing liabilities to benefit the Irish Taxpayer or an asset strip,I know what I think but it’s before the courts.
Absolutely morally repugnant while clipping 100,000,000 from the knackered Irish economy,shameless.
Good God, NMW! I read that Independent article on Ronan’s shenanigans with the uninspiring Glenda; it depressed me more than the promissory note saga. How is fueling this gross lifestyle!?
It comes down to this…. Did NAMA agree to the sale to TAIL? If it did not, as NWL says, why did it not seek to reverse it in the court? By not doing so, indicates acquiescence, if not actual agreement.
Either way, NAMA (in particular Mary Birmingham) is either telling the truth, which means the Agency acted incompetently by doing nothing, or it’s “spinning” it, in which case it will shoot itself in the foot if it’s found out. In the end, on any analysis, it’s a “no win” situation for its public profile.
My reading is that the boys paid 100,000 by loan notes for the equity in a company that purchased the shares for 20m by way of loan notes (vendor financing strikes on the double) you will see that Barrett says shares were purchased above market value. No cash changed hands but the boys did not run away with the shares. Nama naturally wants the liquid tradeable and potentially valuable TCT shares as its security not the illiquid TAIL loan notes. this is their beef.
I see from one of the MB affidavitts that NAMA allowed the boys to set aside €1.5m for CGT liability arising from the TAIL transaction. Would this imply a gain of €6m at 25%?
Anyone know how this liability comes about if the shares were sold at OMV for €100k?
@NWL
What surveyor/auctioneer group advise Treasury–is it W.K.Nowlan and Associates or who? I think in Matt Cooper’s book “How Ireland really went bust” he mentioned Kevin Nowlan–am I right?
@Harold, given Treasury’s size, with, according to the NAMA affidavit €2.7bn of debt relating, presumably, to Ireland and the UK, it’s likely Treasury has a large number of advisers in both Ireland and the UK. Jones Lang LaSalle popped up yesterday, for example, in the context of the Montevetro sale.
[…] TAIL transaction was reported here last week and involved €20m of assets of Treasury Holdings being transferred to Messrs Ronan and […]