Treasury China’s Travails Continue as Share Price Halves

Troubled real estate investment firm Treasury China Trust continues to erode in value as its Irish-based erstwhile parent company recently was found to be insolvent and is to be wound up.

Shares in the the Singapore-listed company have dropped by almost 50 percent since September 2011 — dropping as low as Sing$1.08 per share last week from Sing$2.00 per share.

Treasury China Trust (TCT) is an independently owned, listed property investment vehicle originally set up by the Treasury team, and which controls Chinese property assets valued at RMB 13.3 billion.

However, despite efforts by the company’s directors to separate TCT from its bankrupt Irish cousins, the imminent wind up the company’s European operation, along with questions about the legality of how TCT was purchased by its current shareholders has meant trouble for its share price. Since the start of this year shares have fallen by 28 percent.

Share trading in Singapore was suspended for a period last month following media reports in Ireland about the legality of a recent transaction by which the company’s directors effectively sold TCT to themselves at a 95% discount. And deferred payment for the company as well.

A Dublin court announced on October 5th that Treasury Holdings is to be wound up, so that its remaining assets can be liquidated and the proceeds distributed to the company’s creditors. Having already attempted to hive off the company’s China-based assets so that they would not be included in the liquidation, the company’s directors did not contest the move to wind up Treasury in Ireland.

The company, controlled by developers Johnny Ronan and Richard Barrett, had built up a multibillion-euro property empire that included golf course resorts in Sweden, a five-star hotel in Moscow and offices in Paris.

During the wind up case the presiding Justice said there appeared to be “a significant issue” that TCT and another China related Treasury firm may have been sold at “at a significant under-value.” The judge indicated that this may be a criminal issue “perhaps for the Director of Corporate Enforcement”, and the attorney for one of Treasury’s creditors said the findings of the liquidators may end up bringing criminal charges against Treasury’s directors.

Shortly after the Dublin case was concluded, TCT announced that Richard Barrett had stepped down from his post as chairman of THRE, the trustee manager of TCT. The move had been executed the night before the wind up case was held in Ireland.

Mr Barrett is reportedly now residing in China while the case against him and the other directors of Treasury continues in Ireland.