THE BOARD of Treasury Holdings approved the transfer of €20.5 million worth of shares in a related company to its owners Richard Barrett and Johnny Ronan in 2010 just before loans relating to the property developers were transferred to the National Asset Management Agency.

The details emerged in an affidavit submitted to the High Court by Mary Birmingham, a senior portfolio manager with Nama who has dealt with the Treasury loans.

Nama claims that in return for this transfer, Treasury received €100,000 and unsecured loan notes, with several conditions attached. Ms Birmingham says Nama opposed this share transfer and has sought – to date, without success – to have it reversed.

“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, including Nama,” Ms Birmingham states.

Nama alleges that about March 22nd, 2010, three wholly owned subsidiaries of Treasury transferred 5.3 million shares in China Real Estate Holdings, a related entity, to a company called Daylasin, which is controlled by Mr Barrett and Mr Ronan.

Daylasin is now called Treasury Asia Investments Ltd (Tail). Treasury has argued that the Tail transaction was completed at an open market value.

Nama also claims that a proposal received last month from Australian investment group Macquarie could have resulted in a benefit to Treasury’s shareholders and management of €80 million, in addition to management fees of €42 million for Treasury over a seven-year period.

Nama claims Treasury is “hopelessly insolvent” with overall debts of €2.7 billion and “past the point of commercial rescue”.

In addition, Nama had provided €103 million over the past two years to support Treasury’s continued functioning.

In opposing Treasury’s application for leave to bring a challenge to Nama’s decision to call in loans and appoint receivers over various Treasury properties, Ms Birmingham said the group’s shareholders were providing no financial support for it and it was unable to repay its debts.

Nama had acquired €1.7 billion of Treasury loans in 2010 and the group has additional debts outside Nama of about €1 billion, she said.

Both Mr Ronan and Mr Barrett had declined to inject any further shareholder funds into Treasury and Mr Barrett had said in August 2011 there was no justification to inject funds as “no equity existed”.

Ms Birmingham notes that Mr Barrett last month acquired 1.8 million shares in Treasury China Trust at a cost of €1.55 million. TCT is based in Singapore and focuses on Chinese commercial real estate. It is a separate legal entity to Treasury’s Irish businesses.

In an affidavit for Treasury, its group finance director Niall O Buachalla said he was “at a loss to understand” what had occurred in Treasury’s relationship with Nama to lead to the State agency’s decision to appoint receivers late last month.

Nama had constantly changed its requirements of Treasury, including concerning Treasury’s creditors and tax strategy, he said.

In another affidavit, Mr Barrett said if an injunction was not granted restraining the receivers acting, the Treasury group would suffer losses that could not be compensated for in damages.

Any move to sell assets speedily would be deeply damaging to the wider Treasury portfolio and he was concerned Nama’s actions were threatening TCT, which has assets in mainland China valued at €1.5 billion.

Mr Barrett claims Nama had engaged in no discussions of any real substance with two proposed “bona fide investors” and had given no satisfactory explanation why those proposals had been rejected .

Sections of the affidavits were read yesterday by Michael Cush SC, for Treasury, in the continuing hearing before Ms Justice Mary Finlay Geoghegan of the application by Treasury Holdings and 22 related companies for leave to bring a judicial review challenge and for an injunction restraining the receivers acting.

The case continues today.