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.
Perhaps a coincidence…..announced same day,delayed as in none for now,but maybe later…….or what ?
“Whilst development loans are in place for each of Beijing Logistics Park and The HQ developments, the severe liquidity constraints imposed by the government in 2011 and extended into 2012 translate into a higher risk profile for both projects – albeit less so for Beijing Logistics Park given its near-completion status. Payments to contractors and sub-contractors remain in accordance with various contracts, however lack of certainty regarding timing of access to payments from the approved loans requires TCT to ensure that it has adequate cash reserves across 2012.”
The board has determined that in light of the ongoing uncertainty with respect to the liquidity environment in China, the development program now underway and the sale program for Beijing Logistics Park, that a decision regarding declaration of a distribution for the six months ending 31 December 2011 is delayed.”
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTI4MTE1fENoaWxkSUQ9LTF8VHlwZT0z&t=1
Gosh,just had a look at top owners of the units in TCT,very significant position from Ronan,directly and via TAIL.One wonders if these are ‘pledged’ or collateral for other borrowings,a 10% drop could trigger margin calls and a certain amount of panic by anyone ‘banking’ on them.If its a US bank like JP Morgan they can/will simply dump them into market,if margin calls are not met,most likely they are held free and clear not assigned or utilized as colateral,above is pure speculation/musings.
Ronan (John) 31,320,945 12.4%
Treasury Asian Investments Limited 26,729,095 10.5%
Barrett (Richard Joseph) 20,262,395 8.0%
Concerns regarding ‘access to payments’ in other words a liquidity issue,a cash call would be out of the question,that would result in significant dilution of Ronan,unless of course he can meet it !
Take it ‘private’ anyone,inconceivable for the founders,how could they afford the advisors fees.White Knight or hostile……units were already suspended once,lifted now,was pending announcement of ehm… delay in distributions.Is it not the primary function of The Board to actually make these decisions,is ‘delayed’ seriously The Boards decision,the bus was delayed…oh so was your distribution,really !
“Feb 28, 2012 Request to lift trading halt
Feb 27, 2012 Request for Trading Halt”
http://ir.treasurychinatrust.com/phoenix.zhtml?c=237568&p=irol-ownershipSummary
Controller gone,distribution ‘delayed’,ongoing litigation involving founders……lets hope it works out better than when Leech was no longer with Treasury,that ended up in litigation.Is this a behavioral pattern,awfully careless to keep ‘losing’ controllers/top finance guys.
“Treasury China Trust announced cessation of Wenyi Le as financial controller of the company, effective Nov. 11, 2011.’
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=TCT:SP
(· · · — — — · · ·)
ANNOUNCEMENT OF CESSATION AS FINANCIAL CONTROLLER
“Role and responsibilities * responsible for overseeing the accounting functions, budget preparation, financial and management reporting, tax and audit matters.”
Click to access ANNOUNCEMENT%20OF%20CESSATION%20OF%20FC%2011.11.11.pdf
TAIL update…adjourned until Feb. next year with liquidators of Treasury Holdings now joining NAMA.
“In the course of the hearing before the court, the liquidators of Treasury Holdings (refer TCT announcement dated 10 October 2012) indicated that they wished to join the proceedings as co-plaintiff with NAMA rather than continue as a defendant. They will be bringing a formal application before the court to this effect on 28 November.”
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTYzMDY5fENoaWxkSUQ9LTF8VHlwZT0z&t=1