Treasury's lawyers take stand in High Court as case draws to close
TREASURY Holdings' insolvency did not deprive the borrower of constitutional rights, lawyers for the developer told the High Court.
Lawyers for Treasury took the stand yesterday for the second-last day of arguments in the company's request for leave to take a legal challenge against the appointment of receivers over properties worth hundreds of millions by the National Asset Management Agency (NAMA).
Treasury was responding to evidence from NAMA and KBC Bank.
Treasury should have been allowed to make representations before NAMA appointed receivers over its assets here, Michael Collins, for Treasury, told the court.
Treasury had a "very substantial" reputation here and in China that would be, and already has been, adversely affected by NAMA's decision to call in its loans.
He said NAMA took a decision to call in loans owned by Treasury without giving it a proper opportunity to address issues raised by the agency.
He said Treasury's Paddy Teahon left a December 22, 2011, meeting with NAMA thinking he had "cleared the air" and matters were "on track".
He was unaware all the decisions had been made, Mr Collins said. However, in its evidence KBC Bank said it had taken a decision to send in receivers even if NAMA did not. KBC is owed €75m by Treasury.
If NAMA took a different view, it would make "no difference" as KBC had lost faith in the management of Treasury.
It would countenance no alternative to the calling in of Treasury's loans and the appointment of receivers.
KBC said Treasury could "bleat and cry and whinge" all it liked but the bank had decided to reject investment proposals for the Treasury loans from MacQuarie Corporate and Asset Finance Ltd and Hines. The proposals were "defective", "unrealistic", "unworkable" and "unacceptable to any commercial lender", Lyndon MacCann, for KBC, said.
The proposals, the court has heard, required NAMA to provide most of the finance for those companies to acquire Treasury loans transferred to it.
Granting leave to Treasury to challenge the receivers' appointment would be "a futile exercise", Mr MacCann said.
Treasury had made no loan interest payments to KBC since July 2010 and quashing the receivers' appointment would only perpetuate its continuing breach of contract, he said.
Earlier, in his closing arguments for NAMA, Paul Sreenan said that if Treasury secures leave for a judicial review challenge, NAMA will look to Treasury's shareholders Richard Barrett and John Ronan to personally provide undertakings to pay damages if Treasury ultimately loses that judicial review.
The hearing continues today.
As legal arguments were being heard, shares in Singapore-listed Treasury China Trust fell by more than 10pc. Shares fell after the firm alerted the market that its sponsor, Treasury Holdings, was involved in the legal dispute with NAMA.
The China property business had emerged as a crucial stumbling block in NAMA's dealing with Treasury in evidence last week, after NAMA revealed that shares in the subsidiary valued at €20m had been sold for €100,000 and an IOU to the owners of Treasury.