Treasury Holdings Sells China Assets to Its Directors in Bankruptcy Fight

On Tuesday, troubled property firm Treasury Holdings sold two Chinese subsidiaries to one of its directors for 2.236 million Euros as the company seeks to hive off its assets while facing potential bankruptcy on its home turf in Ireland.

On Thursday, shortly after the sale of Treasury Holdings Real Estate PTE and Treasury Holdings (Shanghai) Property Co Ltd, to an offshore firm controlled by the property group’s own part-owner Richard Barrett, Treasury China Trust (TCT) applied to the Singapore stock exchange for a temporary suspension of trading in its shares. TCT has extensive real estate assets in China, including having purchased the Huaihai Mall in Shanghai for RMB 575 million during 2011.

Treasury Holdings apparently sold its two debt-free China subsidiaries to Mr Barrett in the midst of its battle with creditors over potential liquidation of the firm. Reportedly, the transfer of ownership of the companies in the middle of a liquidation hearing stunned lawyers for Treasury’s creditors.

Last month, Treasury China Trust had found itself in a public battle in Asia with one of its independent directors who charged that the Singapore listed real estate investment firm was run for the benefit of its fund managers and lacked independent board oversight.

The application to the Singapore exchange to halt trading was made by Treasury Holdings Real Estate (THRE), a now former subsidiary of Irish property development company Treasury Holdings, owned by businessmen Richard Barrett and Johnny Ronan. THRE is operated in China by Richard David, who is also chief executive of Treasury China Trust.

The sale of the two debt-free property management units was revealed in the middle of lender KBC’s court battle to have Treasury shut down. The High Court of Ireland has demanded a full report into the circumstances of the sale of the China subsidiaries, which Mr Barrett said was necessitated by the firm’s inability to reach an out-of-court settlement with its creditors.

According to Barrett, the Euros 2.236 mil paid for the companies was the higher of two independent valuations obtained from accountancy firms. Treasury declined to cite which accountancy firms were involved.

(Apparently, neither Mr Barrett nor his management partners referenced Jack Ma or Alipay in explaining this strategic re-ownering of their Chinese subsidiaries).

Speaking from an unspecified location in Asia, where he is now based, Mr Barrett said the deal needed to be done because the appointment of a liquidator to the Treasury Holdings Group would have triggered demands for a €44m repayment from lenders in China — unless the local units were sold before the threat was realised.

Neither of the two companies sold to Barrett owns any real estate directly. They are management units and are paid fees by Treasury China Trust, the Singapore-listed property venture, for managing its property portfolio.

Accounts filed for Treasury China Trust’s report that it paid around €15m in fees and charges last year to Treasury Holdings Real Estate PTE and Treasury Holdings (Shanghai) Property Co Ltd.