Treasury Holdings claims it “unequivocally agreed to NAMA’s requirements” in TAIL transaction

The Treasury Holdings bid to seek a judicial review of NAMA’s dealings with its loans is set to be resumed in Dublin’s Commercial Courtthis morning at 11am before Ms Justice Finlay Geoghegan in Court 14. The case was originally supposed to have concluded last week, and you’ll recall that Treasury was seeking an injunction against the appointment of NAMA’s receivers, and furthermore, a judicial review is being sought of NAMA’s dealings with Treasury’s loans. Treasury abandoned the first of these two strands at the end of last week, so the Court will continue to hear why it should or should grant leave to Treasury to pursue a judicial review.

Meanwhile on the other side of the world, in Singapore where a company of which Treasury Holdings is the “trustee-manager”, a company called Treasury China Trust (TCT),  is listed on the Singaporean stock exchange, there have been some developments overnight. TCT issued a statement to the stock exchange in Singapore after a 10% fall in its stock price was linked to the ongoing court case in Dublin. The TCT press release is here, and it says

“Treasury Holdings is beneficially owned and controlled by Mr Richard Barrett and Mr John Ronan. Treasury Holdings is the ultimate corporate legal entity that owns, indirectly, all of the interest of THRE, the trustee-manager of TCT. TCT owns and operates the properties of TCT, through a number of project companies in the People’s Republic of China”

Clear as mud? So does Treasury Holdings inDublinown TCT, and could the assets or activities of TCT be affected by the financial problems at Treasury Holdings? It seems the purpose of the statement is to assuage fears in TCT being dragged into Treasury Holdings’ plight, but from the statement, I cannot see a certain financial liability break between Treasury Holdings and TCT.

Elsewhere the statement says “Treasury Holdings has informed the Trustee-Manager that the issue of Treasury Asian Investments Limited (“TAIL”) has been raised by NAMA in the Irish Court Proceedings. The Trustee-Manager further wishes to clarify that (i) the history of the TAIL matter was disclosed in full in the Introductory Document issued in relation to TCT on May 21, 2010, and (ii) NAMA’s requirements of Treasury Holdings in relation to TAIL were agreed unequivocally by Treasury Holdings.”

The TAIL transaction was reported here last week and involved €20m of assets of Treasury Holdings being transferred to Messrs Ronan and Barrett for consideration that was deemed inappropriate by NAMA. Reading the NAMA affidavits last week, you might have difficulty reconciling the NAMA statements therein with the statement above from TCT that “NAMA’s requirements of Treasury Holdings in relation to TAIL were agreed unequivocally by Treasury Holdings”

You might recall Ronald Quinlan’s reporting of the transaction in the Independent on Sunday, from which the following is extracted:

“Commenting on Nama’s supposed unhappiness with the deal, Ms Birmingham said: “Nama has at all times since the start of its dealings with Treasury sought the reversal of this transaction as its clear effect was to diminish the assets available to creditors of Treasury Holdings including Nama, by far Treasury’s biggest creditor.

“At no stage has Nama accepted the propriety of what was done in the TAIL transaction,” Ms Birmingham added.

While Nama’s version of events in relation to the TAIL transaction dominated the front page of The Irish Times last Thursday morning, things took something of a twist in the High Court later that day when the agency’s Senior Counsel Paul Sreenan conceded, on foot of an interjection from Ms Justice Finlay Geoghegan, that Treasury had in fact agreed a specific pre-condition concerning the deal with Nama.

According to the Memorandum of Understanding (MOU) signed by Treasury Holdings with Nama on December 13, 2010, Nama, amongst other things, provided its consent for the transaction to proceed once it was granted specific security over the group’s charge over the TAIL shares, allowing Nama to benefit from the net proceeds of their sale.

Interestingly, the pre-condition contained in Treasury’s MOU with Nama also stipulated that 33.3 per cent of all future post-tax profits in excess of the €20m in TAIL shares would be remitted to the developer on the basis that the money would be used exclusively to repay its Nama debt.”

So then, what’s the big deal with the TAIL transaction if Treasury has, as it claims this morning, “unequivocally agreed” to NAMA’s requirements. The Memorandum of Understanding referred to above was signed in December 2010 – 14 months ago – so why is TAIL even an issue now? Or is it the case that although the MoU has been agreed, that Treasury hasn’t – 14 months later – complied with its requirements in terms of providing NAMA with security and undertakings in respect of the TAIL transaction, this after NAMA has advanced €103m to what seems like a deeply insolvent company. And if that is the case, was TCT being entirely frank in the implication of its statement which was that it was at one with NAMA in respect of the TAIL transaction.

NAMA was asked for a comment this morning, but given the ongoing court case, I wouldn’t hold my breath for any clarification.