THE WINDING-UP action being pursued by KBC Bank Ireland against Treasury Holdings took something of a dramatic twist yesterday when it emerged that two income-generating entities related to the insolvent Irish property developer had been sold to a Jersey company controlled by Richard Barrett, co-owner of Treasury.

The timing of the transfer was certainly curious, given that it came on the eve of what many thought might be a High Court judgment on KBC’s legal action to have Treasury wound up and David Carson of Deloitte appointed as liquidator.

It is currently in limbo following the National Asset Management Agency’s decision earlier this year to appoint receivers to assets relating to loans transferred from Irish banks.

This decision is due to be appealed to the Supreme Court by Treasury, having already been the subject of a failed judicial review.

The transfers on Monday night certainly took Nama by surprise.

Within 24 hours, it had changed its position in relation to KBC’s winding-up action from being “neutral” on Monday to joining the bank in the case yesterday. Nama, which is owed €1.7 billion by Treasury and related companies, questioned the transaction in court yesterday.

Mr Justice Brian McGovern deferred the case until October 9th, setting September 24th as the date by which Treasury is to submit an affidavit explaining the transaction.

As is often the way with Treasury Holdings and its associated companies, the transactions involving the China entities lacked a certain transparency.

It was announced to the Singapore stock market, where Treasury China Trust (TCT) is listed. TCT is not directly related to Treasury, although the Irish developer’s co-owners, Mr Barrett and Johnny Ronan, are investors in the China company.

We know that Treasury Holdings China Ltd, a wholly owned subsidiary of Treasury Holdings, has disposed of its entire issued share capital of the trustee manager that acts for TCT.

In addition, Treasury Holdings (Shanghai) Property Management Company Ltd – a Chinese company responsible for the operation, maintenance, management and marketing of the properties owned by TCT – was sold by Treasury Holdings.

Essentially, these companies have the same function but are separate entities.

Both were sold to Oriental Management Services Ltd, a private company incorporated in Jersey and owned by Mr Barrett.

Treasury told the court yesterday that an open market value was paid for the companies but the payment has not been disclosed.

It is not clear if the full value of the assets has been realised, although Treasury’s counsel argued yesterday that the assets were being moved beyond the reach of any creditors.

Treasury claims to have received two valuations from accountancy firms that are not advisers to the group but it won’t name them.

It hasn’t disclosed the income generated by the trustee manager or property management company or given any financial details about these entities.

It seems that a winding-up of Treasury might have triggered a default on convertible bonds issued earlier this month by Treasury Holdings Real Estate Ltd Ltd, which acted as trustee manager to TCT.

There was also reputational damage in China from Treasury’s various legal actions here.

There was no explanation as to why Mr Barrett chose to transfer ownership to a Jersey company rather than an Irish one.

Rightly or wrongly, Jersey has a reputation as a tax haven and a place where assets can be hidden from view.

By deferring a decision on the winding-up order, the judge has given Treasury time to explain this deal and time to secure an investor for the business.

It’s been down that road three times before with Nama. This time around, global heavyweight Morgan Stanley is in the frame as a potential investor although it remains to be seen if such a deal would satisfy Nama and/or KBC.

It has until October 9th to conjure a deal or face being wound up.

As is often the way with Treasury and its associated companies, the transactions involving the China entities lacked a certain transparency.

We know that Treasury Holdings China Ltd, a wholly owned subsidiary of Treasury Holdings, has disposed of its entire issued share capital of the trustee manager that acts for TCT.

In addition, Treasury Holdings (Shanghai) Property Management Company Ltd – a Chinese company responsible for the operation, maintenance, management and marketing of the properties owned by TCT – was sold by Treasury Holdings. Essentially, these companies have the same function but are separate entities.

Both were sold to Oriental Management Services Ltd, a private company incorporated in Jersey and owned by Mr Barrett.

Treasury told the court yesterday that an open market value was paid for the companies but the payment has not been disclosed. It is not clear if the full value of the assets has been realised, although Treasury’s counsel argued yesterday that there was no suggestion that assets were being moved beyond the reach of any creditors.*

Treasury claims to have received two valuations from accountancy firms that are not advisers to the group but it won’t name them. It hasn’t disclosed the income generated by the trustee manager or property management company or given any financial details about these entities.

It seems that a winding-up of Treasury might have triggered a default on convertible bonds issued earlier this month by Treasury Holdings Real Estate Ltd Ltd, which acted as trustee manager to TCT.

There was also reputational damage in China from Treasury’s various legal actions here. There was no explanation as to why Mr Barrett chose to transfer ownership to a Jersey company rather than an Irish one.

Rightly or wrongly, Jersey has a reputation as a tax haven and a place where assets can be hidden from view. By deferring a decision on the winding-up order, the judge has given Treasury time to explain this deal and time to secure an investor for the business.

It’s been down that road three times before with Nama. This time around, global heavyweight Morgan Stanley is in the frame as a potential investor although it remains to be seen if such a deal would satisfy Nama and/or KBC.

It has until October 9th to conjure a deal or face being wound up.

* This article has been amended to correct an error.