Thursday 19 October 2017

Directors of Treasury 'may face criminal prosecution'

Assets sold for €2.2m may have been worth €31m, court is told

Johnny Ronan and Treasurey Holdings co-founder Richard Barrett
Johnny Ronan and Treasurey Holdings co-founder Richard Barrett
Donal O'Donovan

Donal O'Donovan

Property developer Richard Barrett and the other directors of Treasury Holdings could face action at the hands of the Director of Corporate Enforcement or even criminal prosecution if liquidators find a controversial asset sale was fraudulent, a court was told.

Liquidators were appointed to take control of Treasury at the High Court, Dublin, yesterday following a petition from KBC Bank.

Mr Justice Brian McGovern, presiding over the case, appointed Paul McCann and Michael McAteer of Grant Thornton as joint liquidators of Treasury Holdings and 16 related companies. The group did not oppose the application.

The judge ordered Treasury's directors to file a statement of affairs within 21 days for each of the companies affected, setting out the assets and debts of the businesses involved.

Petition

There was no objection to the liquidation petition.

It meant much of the focus of yesterday's hearing was on a controversial sale by Treasury Holdings of two of its Chinese subsidiaries to the company's co-owner and co-founder Richard Barrett in August this year, after the liquidation petition hearings were already under way.

Justice McGovern said there appeared to be "a significant issue" that the two Treasury subsidiaries may have been sold at "at a significant under-value."

While the companies were sold for €2.2m, to be paid in instalments over two years, global bank Goldman Sachs may have valued the same assets at €31m, the judge said.

The issues raised were matters for the joint liquidators, and "perhaps for the Director of Corporate Enforcement", the judge said.

Barrister Lyndon McCann, for KBC, said the findings of the liquidators may end up being reported to the Director of Public Prosecutions, who is in charge of bringing criminal charges in cases of suspected wrong doing, or the Director Corporate Enforcement, who handles civil law sanctions, such as restrictions of company directors.

Liquidators are mandated to look at any "criminal or civil issues" which may arise, the barrister said.

Suspicions

KBC has "very serious suspicions" about the sale itself and the amount paid for the Chinese assets, the lawyer said.

KBC initiated the winding-up proceedings earlier this year.

NAMA, which is owed €1.7bn by Treasury, was initially "neutral" in relation to the case but supported KBC after details about the Chinese asset sale became public.

It said yesterday that it regards an explanation of the Chinese asset sale provided by Treasury Holdings "unsatisfactory" and "incomplete".

However, Michael Collins, counsel for Treasury, said he was a "taken aback" by the references to the bank's suspicions.

He said Mr Barret contends the deal was entirely proper.

The sale had been done publicly and at a time when there was every chance the parent company faced liquidation, he said.

If Mr Barrett had wanted to do anything untoward he would have had months to do it, before the issue came to court in August, he said.

Irish Independent

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